Not sure if it's going to be possible, however below is our current situation, and plans to get us to Freedom 55. Comments welcome ... even brutal ones
- $ 280,000 House
- $ 31,615 RRSP(s)
- $ 1,162 TSFA (mine)
- $ 1,162 TSFA (Wife’s)
- $ 4,603 Cash
- $ 212,220 DB Pension (current cash value – based on 21 years of service)
$ 530,761 Total
Monthly net Income: $ 5,842 *
* I have automatic withdrawals of $515 per month for a company RRSP above my net income above. The company matches 50% into a non-RRSP investment account (or $263 per month – taxable income).
Annual Bonus: $ 7,000 after taxes (based on average amount over last 5 years).
Monthly Expenses: $ 5,842 **
** Monthly Expenses include $ 2,500 TSFA contribution.
Our situation: Wife and I are both 45 years old. No kids. Single income household. We just finished paying off our house last month, so now we’re focused on building our investment portfolio. Currently saving / investing $ 3,278 per month (TSFA, Co. RRSP + 50% Co. matching). We are resolved to maintain, or increase this saving plan. At 55 my pension will be worth $ 752,000 cash value, or $3,300 per month income (calculated on current income, not future earning potential). Pension formula = 1.25% x Average Final Compensation x Pensionable Service
Goal #1: Build assets for retirement, while still maintaining a comfortable budget (plenty of room to enjoy life).
Goal #2: Be in a position to retire by 55 with min of $ 70,000 per year income (in today’s dollars). Note – my Co. Pension is not indexed.
Risks to financial goals: The usual: single income household / loss of job, health, divorce (not likely – 21 years and going strong ), poor investing decisions, market volatility, DB Pension stability, etc, etc, etc.
Any comments or advice would be appreciated. Although I tend to plan things out carefully, I’m not fully confident I’ve thought this through well enough. It’s exciting but scary thinking that my pension + savings would have to carry us through 30+ years.