➡️Fee For Service Planning:
How much do you need to retire? It’s an individualized question, but in this video we’ll go through some general guidelines (4% rule, 25x rule) to help you know if you have enough to retire, along with some real-life examples using our financial planning software to help
If you have any further questions about this video’s topic or any financial planning questions in general, I encourage you to find a certified financial planner in your area or book a consultation with us to get your retirement plan on track. You can learn more about our services at
Financial Resources I personally recommend:
➡️Retirement Income for Life: Getting More without Saving More (Second Edition):
➡️Parallel Wealth Masterclass:
➡️Future Value Calculator:
➡️Neo Mastercard – no annual fee and average 5% back! –
➡️Free Credit Report with Borrowell:
➡️Maximize your Savings with EQ Bank –
The above affiliate links are provided for your convenience. If you click on a link and end up purchasing a product or service, this channel may receive compensation for the referral. We have personal vetted each product and service we provide links to.
OUTLINE
0:00 – Intro
0:46 – Spending Money
3:04 – General Rules
4:57 – Expenses In Retirement
7:26 – Risk In Retirement
8:24 – Scenario One
11:27 – Scenario Two
13:47 – Scenario Three
This presentation is intended for information purposes only and does not constitute an offer to buy or sell our products or services nor is it intended as investment and/or financial advice on any subject matter. Every effort has been made to ensure the accuracy of its contents. Certain of the statements made may contain forward-looking statements, which involve known and unknown risk, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Returns are not guaranteed and past performance may not be repeated.
—————————————–
DISCLAIMER: The videos and opinions on this channel are for informational and educational purposes only and do not constitute investment advice. Adam Bornn is not registered to provide investment advice and as such does not provide recommendations – those looking for investment advice should seek out a registered professional. Adam is not responsible for investment actions taken by viewers and his content should not be used as a basis for investment trades….(read more)
LEARN MORE ABOUT: Qualified Retirement Plans
REVEALED: How To Invest During Inflation
HOW TO INVEST IN GOLD: Gold IRA Investing
HOW TO INVEST IN SILVER: Silver IRA Investing
How Much Money Do You Need to Retire In Canada?
Retirement is a phase of life many Canadians eagerly look forward to. It is a time to relax, pursue hobbies, travel, and enjoy life to the fullest. However, in order to truly experience a comfortable retirement, it is important to plan and save funds well in advance. So, how much money do you actually need to retire in Canada?
Several factors come into play when determining the ideal retirement fund. The cost of living in different regions of Canada varies significantly. For instance, the cost of living in major cities like Toronto or Vancouver is considerably higher compared to other parts of the country. Therefore, it is essential to consider your preferred location and its corresponding expenses when calculating your retirement fund.
Moreover, your lifestyle choices and desired retirement activities also play a crucial role in determining the funds required. Deciding whether you want to travel extensively, pursue expensive hobbies, or lead a modest lifestyle will help shape your retirement savings goals.
In Canada, the general rule of thumb suggests that you need approximately 70% of your pre-retirement income to maintain a similar standard of living during retirement. However, this estimate varies for each individual depending on their unique circumstances. It is advisable to consult with a financial planner to ensure accurate calculations and personalized advice.
Another key aspect to consider when planning your retirement fund is the availability of government benefits and pensions. The Canada Pension Plan (CPP) and Old Age Security (OAS) are two major sources of income for retirees. The amount you receive from these benefits depends on various factors, including your earnings history, age, and the number of years you have contributed to the CPP. These government benefits can account for a significant portion of your retirement income.
Aside from government pensions, it is wise to save money in individual retirement accounts such as Registered Retirement Savings Plans (RRSPs) and Tax-Free Savings Accounts (TFSAs). These accounts provide tax advantages and allow your savings to grow over time.
Financial experts often suggest the 4% rule as a safe withdrawal rate during retirement. According to this rule, you can withdraw approximately 4% of your retirement savings annually while ensuring a low risk of running out of money. However, this rule needs to be adjusted based on individual circumstances and market conditions.
It is vital to start saving for retirement as early as possible. The power of compounding can significantly boost your savings over time. By saving consistently and investing wisely, you can create a solid retirement fund.
In conclusion, the amount of money you need to retire comfortably in Canada depends on various factors, including your preferred location, lifestyle choices, and available government benefits. A financial planner can assist in creating a personalized retirement plan that suits your specific needs. Remember, starting early and saving consistently will help you achieve a stress-free retirement and enjoy the golden years of your life.
Hi, Where can we find a similar software for retirement planning?
"Awesome video! I have a question regarding investing with a limited budget. If someone has less than $200,000 to invest, what would be your recommendation for entering the stock market? Instead of investing on my own and potentially experiencing emotional losses, I'm considering studying successful traders and replicating their strategies. I'm interested in hearing the public's opinion on this approach."
I was an unexperienced stock trader and i lost over $30K when everything started to tank. Not because I was in an exchange that went belly up. I was just stupid to hold and because that's what everyone said. I'm still responsible. It just taught me to be a better investor now that I understand more of what could go wrong. It took me over two years of being in the market, I'm really grateful I find one source to recover my money, at least $5k profits weekly. Thanks so much Mrs Brittany Utley
I'm a newly landed immigrant from the Philippines in Canada, I have a pension from the Philippines.
The 25x annual income need and withdrawing 4% of your portfolio value to meet annual income needs are mathematically the same thing.
There are two reasons why I am planning for my retirement budget to be higher than my current (pre-retirement) budget. First, while I am working, my employer's health and dental benefits cover the majority of our supplemental health expenses. In retirement, these will have to be paid by us and us alone. Second, I feel a need to have an annual conservative cushion for unexpected things. If you are still working, and something big comes up, you might have the opportunity to work more (e.g. overtime) in order to make up for the shortfall. But in retirement, there is no longer necessarily a way to generate new cash.
It's important to compare apples to apples. If you are 40, have a big mortgage payment, kids in school, and are aggressively saving for retirement, then your retirement budget is going to be substantially less than your current situation. But if you are 57, don't have a mortgage, the kids have left home, and you have stopped saving for retirement, then your retirement budget may be much more than your current situation.
Adam, you are absolutely fantastic! You understand the poor the rich and everything in between. You come across as kind and sincere. Thank you Adam.
thank u for useful information. btw: r u on poscast?
The thing is you can require tons of cash as you age into the 80s and 90s if you are not healthy.
To calculate your suggested 80%-85% of current pre-retirement spending, we would exclude our current spending on mortgage, RRSP, TFSA, & RESP’s? Given that these will not exist for us in retirement. Thanks Adam.
Just plugged P-W in the comments field of a Globe and Mail article about how challenging it is to find a knowledgeable decumulation advisor. Adam, I hope your website gets swamped and your email is filled with requests for help! Happy Thanksgiving.
Its a trick question. You can never have enough money.
A lot of it depends on what your pre-retirement income was but I've found that no longer putting 18% of my income into an RRSP and no more maxing out the TSFAs every year frees up a lot of cash. Now at a much lower income tax rate plus the mortgage paid off and the kids out on their own means we are living better now on 50% of our pre-retirement income than we ever did while we were working. Retired 9 years, age 70 now, we are still in the go-go stage and on 50% of our pre-retirement income we have regular month-long overseas trips and winter in a warm climate. Life is good.
Looking forward to my plan soon, Adam. I read 55k a year after tax for a single person maintains an Upper Middle class lifestyle. What do you think? If no debts.
Wow! Fantastic video ..once again!
25x and 4% are the exact same calculation. There's no reason to make a distinction – they aren't different approaches.
100%/4% == 25
Hi Adam, Another informative video. Would you be able to clarify if a person's home equity would be included in the required equity? Home equity comes into play once a person is in their later years and downsizes into a condo or rental unit. Also clarification on gross vs net income would be helpful. Is the x25 scenario based on net income being that the current and future budgeted expenses are net $? Thanks
90 years old is no longer a realistic end point. Financial planners should tell their clients that they will most likely have to plan for longer.
In my area utilities, property taxes, insurance vehicle/home, alarm monitoring, one cell phone. Yearly cost for 2023 will be $19,257.00 Utilities count for $10,212.00 of the yearly cost and a large part of that is carbon taxes and GST being charged on top of carbon tax and as carbon keeps getting increased it will become more expensive. This cost doesn’t include fuel, maintenance and expenses for vehicle, now you add in groceries which also have gotten more expensive. As of September 30, my low risk RRSP/DPSP is down $42,000. 2028 my income will be lower by ~$1,700 because of enhanced CPP deduction and I am sure tax rate will also be higher if Liberal/NDP coalition remains in power in Canada.
4% rule and 25 times rule are exactly the same (25*4%=100%)
Great video but what I am missing is that there are 25 year between 65 and 90. Why not be save for just the first say five years? Put the required needs for the first five years in GIC’s. The rest you can put in a nice S&P 500 which makes on average 11%. You can track your investments in the S&P 500 every year. Is there a good year you can take out for the next year and put it that in a GIC. If the return is not that great you just leave it. You have a buffer of five years
You should sell a monthly subscription to this software. $3500-$4000 +tax is a lot of money for someone who is hoping to make $3000/month in retirement.
Goes up every day, inflation anyone?
Very well done….Thanks for the information.
Adam. Once again you explained finance in simple terms.
Do you have a representative in Ottawa??
These calculations don't seem to be taking taxation into account though. If someone wants $4k/mo, that means they want to have $4K/mo TO SPEND, so need to pull out $4K + 20% tax (or whatever rate) per month. Doesn't that mean you need more money than you have stated here?
I'm single, 62, have a 1100 sq. ft. home, no debts. I was working full time during the pandemic. There wasn't much that we could do so it was a pretty minimal existence cost wise. I added up all my expenses for the year and was surprised at the amount. A total of $16000. What? No way, it can't be that low. Check everything again and yes it was correct. So lets call it $20K for basic existence and anything on top of that is for pleasure. This is excluding major things like a new roof this year or a car every ten years. (most of the time I use my bike and not my car)
I retired just over a year ago. I'm delaying taking my CPP (92% of maximum) and OAS in order to get the maximum by delaying it. For now I'm living off my savings. My problem is that I have been living a simple lifestyle for so long and its hard to change that now. I have always been concerned about never having enough. With $1m savings (I always heard I would need $1 million to retire) plus future CCP and OAS (they said CPP would go broke) now I have to figure out how to spend it. I never had an idea of what I needed. I have never budgeted for living expenses and extras, but now I have to figure out how to do that.
Great video thank you. Very informative as always.
When I hear those random figures, I never know if they mean per person or per couple . So thanks for specifying.
Thanks for the video.
Are there any resources out there to help calculate costs of retirement based on desired/projected lifestyle, rather than current spending?
We want to live a completely different lifestyle in retirement, so basing how much we need based on what we spend now (as frugal folks who save well) will not be accurate for us.