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  1. #21
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    A lot depends on WHERE you live. I am sure there are people with a cabin in a remote part of BC that live on less. same would be in Newfoundland. But in Toronto, Vancouver or even other major cities?? Unless you are prepared to be a street person or something close.

    Someone metioned CPP/OAS. You won't get much of that at 30 something (or even later if you don't work)

    For a retired middle class couple with paid off home and full CPP/OAS living outside of major cities, a million might do it in todays $. They would have a total of about $65-$70k before tax if the money has wisely invested. But not if in GICs or the like.


  2. #22
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    Quote Originally Posted by agent99 View Post
    A lot depends on WHERE you live. I am sure there are people with a cabin in a remote part of BC that live on less. same would be in Newfoundland. But in Toronto, Vancouver or even other major cities?? Unless you are prepared to be a street person or something close.
    This kind of thinking blows my mind

    Someone living in Toronto has $1M (anyone who owns a house there) and says well darn I need to keep working until 65. Because Toronto. Does it not cross their mind that they could be living like a king in many beautiful parts of the world instead of gridlock traffic and cubicles half their life? Leaving is not even an option? I live in hamster cage therefore I shall run in the hamster wheel? Stockholm syndrome maybe?

    To build up OAS you need to live in Canada for 6 months/year. Why not spend 6 winter months somewhere warm in a hammock.
    amat victoria curam

  3. #23
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    You don't need to save $1 M if you a) save early and b) save often. Compounding and reinvested returns and dividends will take care of the rest over 20-30 years.

    That said, to answer your question, I hope to live off $1 M within another 10 years.

    I have no hope of quitting work in my 30s. In my early 40s now but we're halfway to our goal. I recently wrote about how I believe $1 M is "good enough" for our retirement plans:
    http://www.myownadvisor.ca/our-bucke...in-retirement/

    This excludes CPP and OAS income which should be a conservative of $20,000 per year between both of us at age 60 or higher at age 65.

    Say you have $1 M in your RRSP, at age 60. You can withdraw a tidy sum of money for the next 30 years.

    At the end of the day, $1 M or $2 M or even $500k is OK depending upon your lifestyle. Once you figure out how you want to live, the 'enough number' is easy to figure out. Just me maybe.
    Hidden Content - Working on a $1 million portfolio and $30k per year from it.

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  5. #24
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    I agree with MOA but I think there are a lot of moving parts here.

    I've been grappling with this problem for years and have yet to determine a quantitative nest egg number I knew was right. At the end of the day, I think you get yourself into a reasonable range and you live within what you have. You adjust to fit the money at hand, instead of adjusting the money to fit you.

    ... and then there is the issue of risk versus time. We intend to draw out less than what we could, at first, because I am a fraidycat. As we get closer to end of life, I expect we'll be able to turn up the spending massively. ... but when you have 35 years to fund, it's a bit scary.

  6. #25
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    Quote Originally Posted by My Own Advisor View Post

    Say you have $1 M in your RRSP, at age 60. You can withdraw a tidy sum of money for the next 30 years.
    Unfortunately, part of that $1million belongs to the government. It will be taxed at full rate, same as interest when withdrawn. At 71 the government will set the withdrawal rate at 5.28% and it goes up every year after that. It depends on whether we are talking about a single or a couple, but a good part of OAS/CPP (also taxable at full rate) will be required to pay the taxes on the RRSP/RRIF withdrawal.

    So basically saying that $1million in RRSP is not same as $1million in taxable savings.

  7. #26
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    Yet Tom, you could, if you had...and you might because from what I know you've done very well for yourself..... had $1 M in an RRSP today, and start withdrawing from it at age 60; assuming 2% inflation and a 5% conservative rate or return - unless you have lots of debt at the time of retirement you could withdraw $50k per year and die broke at age 94.

    Then, if you owned a home, you could always sell that in your 90s and use that for supportive care. Then you have CPP and OAS on top of your $50k per withdrawn.

    I've always thought the 'enough number' is a bit of a guessing game but I believe if people, could, somehow, strive to have $1 M in the bank in their 60s (say time of retirement) they've done very well and would have little money issues in their golden years.

    The 'enough number' is easy if you know when you'll die. Morbid thought but true. So, better to save your David Chilton net 10% income as early and as often as possible and if you hit $1 M (or even close to it for most Canadians) pat yourself on the back - you've saved well and done good.
    Hidden Content - Working on a $1 million portfolio and $30k per year from it.

  8. #27
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    Quote Originally Posted by none View Post
    ^ This is credulous and has no basis is reality.
    Quite. Someone who is claiming that an index investor needs 50% more funds to generate the same income as active investors is deluding himself and the reasons are bloody obvious - a well as statistics. Then again, I am all for active investment - by others - so all is good.

  9. #28
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    Quote Originally Posted by m3s View Post
    This kind of thinking blows my mind

    Someone living in Toronto has $1M (anyone who owns a house there) and says well darn I need to keep working until 65. Because Toronto. Does it not cross their mind that they could be living like a king in many beautiful parts of the world instead of gridlock traffic and cubicles half their life? Leaving is not even an option? I live in hamster cage therefore I shall run in the hamster wheel? Stockholm syndrome maybe?

    To build up OAS you need to live in Canada for 6 months/year. Why not spend 6 winter months somewhere warm in a hammock.
    I wonder about this too. I am 54. There are at the very least tens of thousands of Toronto homeowners about my age who bought 20 or 30 years ago and are sitting on approximately a tax free one million dollar gain earned purely by the genius of being lucky. Why there is not a stampede out of Toronto to say Ottawa where the same building can be had for $300K or $400K is beyond my understanding. Or put another $100K in your pocket by living across the river in Gatineau. Or put yet another $100K in your pocket living in some economically dead area like where I live.

    I can kind of understand Vancouver if you really must be a Canadian that lives in Canada but insists on not experiencing winter, but even here, why not pull an Eder, that is get your ass on a sailboat and hit Mexico or the Caribbean annually.

    Hboy54

  10. #29
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    Quote Originally Posted by hboy54 View Post
    I wonder about this too. I am 54. There are at the very least tens of thousands of Toronto homeowners about my age who bought 20 or 30 years ago and are sitting on approximately a tax free one million dollar gain earned purely by the genius of being lucky. Why there is not a stampede out of Toronto to say Ottawa where the same building can be had for $300K or $400K is beyond my understanding. Or put another $100K in your pocket by living across the river in Gatineau. Or put yet another $100K in your pocket living in some economically dead area like where I live.

    I can kind of understand Vancouver if you really must be a Canadian that lives in Canada but insists on not experiencing winter, but even here, why not pull an Eder, that is get your ass on a sailboat and hit Mexico or the Caribbean annually.

    Hboy54
    I have no idea hboy. If I was sitting on $1 M tax free in Toronto, I'd be LONG gone. If I was sitting on $2 M in Vancouver I'd be running!!!
    Last edited by My Own Advisor; 2017-04-20 at 08:35 PM.
    Hidden Content - Working on a $1 million portfolio and $30k per year from it.

  11. #30
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    Quote Originally Posted by agent99 View Post
    Unfortunately, part of that $1million belongs to the government. It will be taxed at full rate, same as interest when withdrawn. At 71 the government will set the withdrawal rate at 5.28% and it goes up every year after that. It depends on whether we are talking about a single or a couple, but a good part of OAS/CPP (also taxable at full rate) will be required to pay the taxes on the RRSP/RRIF withdrawal.

    So basically saying that $1million in RRSP is not same as $1million in taxable savings.
    Yes, part of it does. But if you own your home, you have $1 M in the bank churning out income, AND you have CPP and OAS to rely on, are you saying that's not enough money to live on? Maybe depending on how some people live, it's not, but for 95% of Canadians over age 60 I suspect they would be very happy and comfortable.

    Hidden Content - Working on a $1 million portfolio and $30k per year from it.

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