My parents are about to retire. Advice? - Page 6
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Thread: My parents are about to retire. Advice?

  1. #51
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    Quote Originally Posted by mordko View Post
    Someone who is retiring at 55 can easily live for another 35 years. That raises the risk of things going wrong with inflation, the stock market, taxes and a whole lot of other relevant factors. If we think back, life was quite different in 1980 and the assumptions made then wouldn't be valid today.

    One has to be a bit careful when claiming that someone retiring at 55 with 1M will be able to easily live off his investments while maintaining a consistent lifestyle.
    It all depends on what their expenses are. If they spend 25k/year they're only withdrawing 2.5% of their portfolio. If they spend 100k a year they are withdrawing 10%. One of these situations is safer than the other.


  2. #52
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    Quote Originally Posted by Spudd View Post
    It all depends on what their expenses are. If they spend 25k/year they're only withdrawing 2.5% of their portfolio. If they spend 100k a year they are withdrawing 10%. One of these situations is safer than the other.
    Indeed. I'd suggest the vast majority of senior couples have less than $50k of annual cash flow expenses. Full CPP (if applicable) and OAS alone for each of both individuals could provide more than $42k of pre-tax income. In reality, few sensior couples today actually earned enough to qualify for full CPP (each) so CPP and OAS is likely closer to $25-30k. Regardless, it doesn't take all that much in additional capital assets to provide a total of $50k in annual income.

  3. #53
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    Quote Originally Posted by Spudd View Post
    It all depends on what their expenses are. If they spend 25k/year they're only withdrawing 2.5% of their portfolio. If they spend 100k a year they are withdrawing 10%. One of these situations is safer than the other.
    Indeed. The point is that risk is substantially higher for someone retiring with 1M who is 55 vs 70.

  4. #54
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    Whether you are retiring, you need money to live from or you are working today, you need money to live from.

    For the most part, it all comes back to how you want to live and your expenses for that lifestyle.

    You can work and live cheap. You can work and live large. You can retire and live cheap. You can retire and live large. The choice is yours.
    Hidden Content - Saving and investing my way to a million dollar portfolio.

  5. #55
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    Thanks for all these great replies. Retirement is a long way off for me, but you never know... maybe my next business venture will work out great and I can hit my 2M mark earlier than planned.

    Quote Originally Posted by My Own Advisor View Post
    So, simple and quick math, you've got $2 M non-reg in one of your favourites (XIU) with 3% yield - there's your $60k with almost zero tax paid.
    Something like that was in my head. The nearly pure eligible dividends off XIU are attractive for exactly this reason -- surely nothing can beat the tax efficiency of that. But I also see your point about more aspects of flexibility including dipping into capital, plus of course the CPP & OAS (assuming these still exist when I retire).

    Still, I can't get my mind off the beautiful simplicity of a massive amount in just XIU. And for the dividend-growth'ers out there, it's got that too:

    xiu-distributions.png

    Last edited by james4beach; 2016-12-27 at 10:12 PM.

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