# Totally Confused Looking For Help What To Do Next To Secure Our Retirement Income



## Willwemakeit (Feb 7, 2016)

Hope you will treat us gently, as it's taken a lot of guts to pour out our normally to us very very private information here after years of reading but..... Feel the more we read the more confused we are getting and really would appreciate others insights into what to do moving forwards if you were in our shoes with no future income just having your nest egg to support you through in retirement forwards. 

On one hand thought we needed to develop a basket of good dividend paying stocks for income in retirement, then read that growth should be the ultimate goal over income producing. Invest in ETFs/Indexes to avoid high MER's. Thought should maybe just buy VUN-T, but unsure how the current exchange rate might affect that or not??? Have been reading for years (Canadian Money Forum, Canadian Couch Potatoe, Early Retirement.org, Early Retirement extreme), but always been very nervous about bearing our all financially but realize if we are to get proper guidance we need to just do that, hence this now. Hoping some of you folks here can shed some light in easy to understand terms/explanations to help us. Currently this is where we are at and we we need to start drawing on our savings/investments moving forwards for income:

TD Canada Trust/Webroker for all our financials for over 

My TFSA Balance = Cash = $40,026 TOTAL ALL CASH = $40,026
Spouse TFSA Balance = Cash =C$33,433 TOTAL ALL CASH = $33,433
My RRSP Balance = Securities = C$9,668 Cash = C$7,289 - TOTAL = C$16,957
Spouse RRSP = Cash = C$10,902 - TOTAL ALL CASH = $10,902 

C$ Margin Account = Securities = $127 Cash = $625 - TOTAL = C$752
US$ Margin Account =Securities = $53,000 Cash = $7,000 - TOTAL = US$60,000

Checking Account = We try to always maintain over $5,000 to avoid bank charges which seem astronomical today with charges for statements and monthly charges.

TD Travel Visa = use it for everything we can and pay it off each month but cost is $120/year for us both.

Currently we have a large acreage home that costs us around $4,000 per month for insurance, utility bills, property taxes, that less than a year from now we won't have this cost due to being sold. We want to spend the next few years (starting Jan 2017) becoming FT RVers, but we do have a place to return to as a base with family on acreage here to maintain our Alberta Residence needs, albeit we want to travel and make memories whilst we can.

Currently we have a numbered company we have operated all our businesses through - however negligible further income generated through that moving forwards, so will be speaking with accountant on viability of continuing or shutting it down, especially now under new government changes recently. This would mean lower accounting fees each year if this was gone, as well no registration fee each year and able to shut down the costs incurred on the business checking account. Value your thoughts here folks 

In addition to the above, we will have after the turn of end of year a further $1.2 to $1.4million from property sales (could even be an extra $200K but trying to be conservative so wish to work with $1.2 for safety net) and that will be it for us together with whatever is left out of the above amounts.

We will have our Ford Escape, Our 14 year old Gas RV which we love boon docking in more than staying in cramped campgrounds and is equipped to do so fully off grid with solar etc. We would like to allow $850/mth in our budget towards transferring into our TFSA's to keep maxed out so that assists us hopefully for income when we are eventually eligible for OAS/GIS in the future.

To that end we have no idea what to allocate for number of years (parents died 55, 66 and 68), we are currently aged 52 and 59. Due to way businesses (accountants advice) were set up in the past 21 years (present in Canada) we have very very little contributed to CPP, and we left the UK at age 30 & 37 with again nominal amount paid into UK pension so have absolutely no idea what we might get or be entitled to in that regards if anything? Basically we are totally clueless, even to hearing about asset allocation and hearing it and reading it time after time, don't understand how bonds work, GIC's, laddered GICs and so on and so forth. As for how many years we need to allow for our life times and what we can safely withdraw (albeit we'd love to keep our capital in tact, can we????) we don't have a clue there. I don't know whether we'll live into our late 60's or until we're 100. What number of years do we need to allow for? Realistically what can we expect to enjoy income wise from our paltry savings we have? We have no other forms of income or pensions other than referenced here.

FWIW: Whilst I've enjoyed direct buying tickers in the US and Canadian Markets (nearly lost all our money in the Canadian markets so struggle with that one!) for the past 15 years on and off we would like to be able to become more hands off than daily watching the markets. I only have experience of going long or short, no options or otherwise and don't have any inclination to want to learn those.

So in a nutshell we need to know realistically what is the best set up for us to have and what based on current climate conditions moving forwards is a realistic rate of return to expect. Growing up and my parents generation it wasn't unrealistic to expect to put your money in savings accounts or similar and expect a steady average 8% to 9% pa, but we understand those days are long gone. Have no idea what is a "safe" and realistic rate of return to expect moving forwards.

Some dream wishes, we've had for the many years whilst working our butts off, we would like to achieve in order of preference are: 3 month RVing trip in Australia inc Tahiti enroute = budget $30,000 6 to 8 week driving trip Europe = budget $15,000. These two before our health diminishes and can't be as enjoyable. Other than that our FT RVing here in NA, and it would be nice to maybe do a trip to Hawaii or Cruise every other year or so. 

Thanks in advance to you all for your guidance and advice for "dummies" like us to hopefully have a safe and happy retirement


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## NorthernRaven (Aug 4, 2010)

With no CPP/pension, it sounds like your main asset is the property that will be converted to cash and invested for retirement income? One thing to eventually consider would be to find a fee-based financial advisor experienced in retirees that you feel comfortable with, and have them take a professional look and come up with a plan. There's a lot you can think about by DIY research, especially if you have a good rationality filter, but you don't want to plan your life via a bunch of us crazy internet folk!

Another thing to bone up on might be annuities. With no pension or CPP as base income, you'd be relying on constant income from whatever investment plan you go with. Putting some fraction into annuities could provide a guaranteed base income in addition to OAS, and provide longevity insurance. The co-author of the book "Pensionize Your Nest Egg" used to hang out here, but I don't believe she does any more. I think annuities are somewhat pricey right now due to historically low interest rates, and they might be better bought at a later age anyway, but you'd want to at least do some research.

As a small aside, you mention minimum $5000 in a TD bank account to avoid the monthly charge - I assume this is the "All-Inclusive" (formerly Select) account? If so, you should be getting your $120 TD Travel Visa annual fee waived.


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## birdman (Feb 12, 2013)

Well, firstly, good for you for posting but there are so many questions and scenarios that it will probably be a while before you get answers to them all and develop a plan going forward. There are lot of people around here that will help and while I have a couple of suggestions and comments, others on this forum have way more skills than I do on this subject.
Here are a few suggestions:
1. Figure out what your annual expenses will be after you retire.
2. I believe full time RVing costs about $60-70,000. PA but this of course is dependent on your travelling lifestyle.
3. I expect you will both receive OAP benefits at age 65 or 67.
4 Depending on your genes and lifestyle you can live a very active and full life for many years. I am 70, retired at 56, and play sports regularly and keep in shape and generally feel like a 50 yr old. I ski with 2 other fellows (ages 70 and 80) and we all ski like wind including moguls, etc. The 80 yr old is an ex olympian and swims, runs, and bikes daily when he is not skiing. Normal life expectancies are in the 85 to 87 yr range and you can be quite active into your 80's and beyond. I plan to be active into my 80's and don't plan to run out of money-ever. If you are looking for a time, maybe use 95 yrs. Your call.
5. You will need to allow for inflation at say 2%Your cost of living will decline once you become inactive and no longer full time RV. Consider what you will do at this time.

As mentioned above you will have to give the future a lot of thought in order to figure out where you are going and you will probably need an advisor as suggested to figure out some options in regards to finances. Just remember that with reward comes risk. GIC's only pay around 2% for medium to longer terms and even these rates are not usually available thru traditional banks. At first blush, retiring at your young ages based on your assets and lack of CPP or pension income seems a little tight to me but its just a guess on my part.
Good luck and I will follow the thread with interest.


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## AltaRed (Jun 8, 2009)

You say you have done a bunch of reading and now want some guidance for a plan. I will suggest you do a bit more reading, specifically http://www.finiki.org/ where a lot of what you are asking can provide you with some guidance.

Caution about forums: There is a ton of good information on forums such as CMF but you have to be able to filter through those who are speaking from the perspective of a 30 year old just getting traction in an investment portfolio versus folks like you who are getting close to needing to have a soon-to-be retirement portfolio. The actions and responses can (and should) be quite different. 

Seriously consider a couch potato portfolio of ETFs in all your accounts and look at all your accounts as one portfolio. You may also seriously need to consider dropping the whole concept of having an acreage. Land and RE is mostly a boat anchor for folk in their 50's and 60's that want to do some serious travelling. Consider a smaller place like a cottage style home where you might be allowed by bylaw to park your RV, or a condo villa and store your RV offsite. There are dozens of options to do that in Alberta.


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## mordko (Jan 23, 2016)

Good suggestions... Agree with AltaRed re Couch Potato portfolio. You may want a decent fraction of bonds to cushion against market downturns as you would be withdrawing right away.

I am by no means an expert, but they say one should count on being able to withdraw 4% of his net worth per year. It's a rule of thumb, so take it with a pinch of salt. Assuming you have 1.6M in assets, it equates to 64k annually, which might be ok, depending on what you need. The main issue is that you are so young, which means it should really be less than 4 % annual withdrawal, otherwise you risk outliving your assets. Inflation will cut your real income in the future, but you might need less once you quit travelling.

This is all very rough and keep in mind there will be taxes on anything that is not in TFSA. On the positive side you should get OAP at 65. Also, you might be surprised with the state pension you will be getting from the UK. I am in a similar position in this respect, and will be getting a surprisingly decent income because I spent 10 years working in Britain. They have just changed the rules, so you should check.


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## Willwemakeit (Feb 7, 2016)

*SINCERE THANK YOU ALL*

Wow, I am so touched by the response from you all. THANK YOU! Just what I needed. I have to admit annuities have not appealed to us in the slightest ever as a consideration but .......

Our budget looks to be needed (that includes contributing $850 for both of us each month into our TFSA's to keep maxed out) at just under $5,000 per month ideally, albeit if we really wanted to live like scrooge and not travel we could reduce this down by at least another $1000 or more a month. We aren't big folks eating out, preferring home cooking, when we do eat out tend to keep it under $30 for the two of us, we are quite boring, hardly ever drinking. Used to ski passionately until knee injury from chair lift took me out of that sport a few years ago (knees pop now when least expect).

Our goal is to never own real estate personally again (our daughter and fiance will take over the acreage here), we will have a home to come back to and have set aside a $100,000 for the future to build a granny annex/mother in law suite on their acreage. Rightly or wrongly we are just done with the crazy high costs of insurance and property taxes, and can't see our province resurrecting itself in the very near future. Took almost 20 years after the last crash of the 80's = of course that's all speculation on our part but nonetheless how we feel. We're just done with how much we've paid to governmental/official bodies over the years personally so wish to avoid that moving forwards wherever possible.

Agree regarding the couch potato portfolio and to that end would you folks be willing to tell use for simplicity and best reward to risk outlook (we understand zero risk, zero return but there's got to be a reasonable middle ground somewhere) how you would probably allocate our funds in a portofolio along these lines for balance of risk versus reward to generate a reasonable return in current climates and predicted forwards climate. For bonds allocation is there just a straight forward ETF one can buy like with the Vanguard funds for couch potato? What allocation would you do in what tickers and why those tickers ie; low MER's, longer term average growths etc?

With regards to longevity, if we hit our 80's we will be thrilled considering our parents died in their mid 50's to late 60's, albeit things are different from the 80's when they passed away medically wise. Hence why we are dubious to just keep working until we've no life left in us to live. Just don't want to be on our last legs saying "wish we had ..... earlier" Seen too many people pass away too young never having truly lived outside of getting up going to work, coming home and rinse and repeat their whole lives. We want to have lots of fun memories to reminisce on when sat on the daughter's front porch in our rockers in a couple of decades or so if we are spared.

We are more than happy to read much that's referenced to us and suggested, just need it to be KISS principal in content and clearly presented. For some reason when it comes to investments everything seems to have to be acronyms or not categorically clear to those that aren't familiar over prior half a century plus in it's contexts it often feels.

Once again very touched and thrilled with your answers and very much looking forward to seeing the different portfolio allocations and researching those tickers and combos that any of you are kind enough to suggest and percentages.


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## Willwemakeit (Feb 7, 2016)

mordko said:


> Good suggestions... Agree with AltaRed re Couch Potato portfolio. You may want a decent fraction of bonds to cushion against market downturns as you would be withdrawing right away.
> 
> I am by no means an expert, but they say one should count on being able to withdraw 4% of his net worth per year. It's a rule of thumb, so take it with a pinch of salt. Assuming you have 1.6M in assets, it equates to 64k annually, which might be ok, depending on what you need. The main issue is that you are so young, which means it should really be less than 4 % annual withdrawal, otherwise you risk outliving your assets. Inflation will cut your real income in the future, but you might need less once you quit travelling.
> 
> This is all very rough and keep in mind there will be taxes on anything that is not in TFSA. On the positive side you should get OAP at 65. Also, you might be surprised with the state pension you will be getting from the UK. I am in a similar position in this respect, and will be getting a surprisingly decent income because I spent 10 years working in Britain. They have just changed the rules, so you should check.


Mordko, would you please be kind enough to share how you are sourcing your UK state pension you will be getting. I have read that for ex pat brits living almost anywhere else in Canada their pensions increase but us that are in Canada our pensions are fixed with no inflation increases after the initial payout date. Thanks for any links, contact information you can share. We have no idea what the state of play is on our UK situation of pensions. I vaguely remember opting out of SERPS (for the life of me can't remember what that was all about in the 80's?) Much appreciated Mordko.


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## jdc (Feb 1, 2016)

A couple comments :

1. If you are in good health, active, don't smoke, etc., there is no reason to expect to only live as long as your parents. The longer you live without health problems, the longer you will live from then. There are life expectancy calculators on the web that use actuarial statistics that can help you estimate how long you should live, but of course they are not to be depended upon. 

http://www.canadianbusiness.com/cbn-tools-life-expectancy-calculator/

2. You won't need to fund your TFSA contributions from investment or other income. After you sell your home, you'll have most of your investments in non-registered accounts. Once a year, just move some of those funds over to the TFSAs, and your total investment remains the same.


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## lonewolf (Jun 12, 2012)

Get rid of bank deal with credit union
Would have zero stocks unless held in deferred annuity that will not loose money if market goes down.
Bulk of money would have in GICs on line credit unions Manitoba
Few dollars in Bit coin max 500 dollars few dollars in junk silver coins for insurance against currency crisis.
go over budget money spent monthly cut out any waist.


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## NorthernRaven (Aug 4, 2010)

One reason I mentioned annuities is not necessarily to buy them, but that they make a good sanity cross-check when figuring out what you might do yourself with some sort of investment portfolio. It looks like at age 60, $100,000 might buy close to $400/month of joint-life annuity income, or $4800/year, or $48,000 for $1 million. That would be mostly after-tax for non-registered money, although a small chunk would be taxable, and it isn't inflation indexed; an indexed annuity or doing your own inflation supplementing would provide less, but it gives you some sort of mental ballpark for a base. Investing yourself can provide higher returns, but you want to be sure whatever investment plan you come up with can provide a steady stream of income, since it sounds like it will be your only source of income at least until OAS kicks in?

Remember, couch potatoes are usually accumulating wealth, but you will almost immediately need it to spit out significant basic income, and be able to be drawn down over the years. I'm single, and unfortunately won't have quite the level of assets you do when I retire, but I have 20 years of a deferred DB public-service pension plus CPP waiting, to provide a base for my investments to add to. Controlling my entire nest egg myself and being responsible for generating dollar one of retirement income would tend to give me the willies, and I'd want to make very sure I had things lined up. 

If you can find one, getting an experienced fee-based retirement planner to do what they do to develop a plan might be a cheap investment in peace of mind. They'd have experience in identifying expenses and spending patterns during retirement, tax efficiencies (RRSP, tax rates on dividends/capital gains/income, etc), and allocation strategies over time.

You can probably set aside the details of MERs and exact ETFs for awhile. Work out as much detail as you can on expected expenses. You'll need that $100K for construction costs, an emergency fund, and perhaps some of your early vacation costs to be available when needed, so determine how much should be in cash or GICs. Is there a desire to leave something as an estate? Get a sense of what you'll need each year and how much you could invest, and then you can take some model portfolios and see how they might look in terms of potential cash flow and so on.


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## 0xCC (Jan 5, 2012)

For the couch potato stuff and what funds to invest in a very good starting point (and there isn't really a need to go much further) is the Canadian Couch Potato model portfolios: http://canadiancouchpotato.com/model-portfolios-2/

It seems like right now you likely fall into the Option 2 or Option 3 category (either TD e-Series funds or full ETF portfolio) and once you have sold your property you will fall into Option 3.

Take a look at the breakdown of the different model portfolios for both of those options. There are 5 risk levels with specific fund/ETF names and target weights for each risk level as well as 1-20 year return information for each risk level. TD e-series suggestions here: http://canadiancouchpotato.com/wp-content/uploads/2016/01/CCP-Model-Portfolios-TD-e-Series-2015.pdf, ETF suggestions here: http://canadiancouchpotato.com/wp-content/uploads/2016/01/CCP-Model-Portfolios-Vanguard-2015.pdf

If you decide to do go the couch potato route the difficulty will not be deciding which funds to use and how to divide up your portfolio, the difficulty will be in figuring out the mechanics of taking living expenses out of the portfolio every year or quarter or month.


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## Underworld (Aug 26, 2009)

Glad you could share your information. I'm very open about money - it doesn't bother me at all. Some people earn more than me some people earn less. At the end of the day we are all on earth for a very short period of time so who cares?


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## lonewolf (Jun 12, 2012)

Couch potato is old school its not going to work when the world is deleveraging. Margin Debt sky high for stocks. So many bonds paying negative interest rates which are will lose money for the holder unless sold to a bigger fool. There is just to much sub crime debt out there that will never be paid back.


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## BC Eddie (Feb 2, 2014)

Willwemakeit said:


> Mordko, would you please be kind enough to share how you are sourcing your UK state pension you will be getting. I have read that for ex pat brits living almost anywhere else in Canada their pensions increase but us that are in Canada our pensions are fixed with no inflation increases after the initial payout date. Thanks for any links, contact information you can share. We have no idea what the state of play is on our UK situation of pensions. I vaguely remember opting out of SERPS (for the life of me can't remember what that was all about in the 80's?) Much appreciated Mordko.


I have tried to attach a British publication re UK Pension but unfortunately it exceeds the boards size limit. If you send me a private message with your email address I will send it on to you. It is a bit dated but will probably give you the contact info you require. My wife used it to get her pension. While the rules have changed recently you might be pleasantly surprised to find out how much you are entitled to (assuming you worked for some period of time in UK) (You may be eligible to get increased payments by paying additional contributions now). Hope this helps.


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## lost in space (Aug 31, 2015)

I think the best thing for you guys is to find a good financial planner, the last thing you want to be doing is trying to figure out investing while retired, especially as you don't have CPP (but you will get OAS and probably GIS). Don't go with the first person you meet, interview several and go with one who can meet your objectives. You will have enough money that it is probably worth a for fee financial planner but whom ever you go with make sure they have a fiduciary duty to look out for your best interests and not just be a MF salesmen. 

Finally don't wait too long to retire!!

You don't know how long you'll have your health, my 61 year brother is law, a super active type of guy is struggling with arthritis and it's really slowed him down!


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## Willwemakeit (Feb 7, 2016)

Once again a tremendous thanks to you all for the input and insights. I only get the opportunity to check back about every two days or so as I get busy in our every day bread and butter lives, and usually it's a past midnight time to catch up on the forum 

For sure lost in space, can't agree with you moreso about don't wait too late to retire. Every funeral we attend, we hear the same friend's say, "that's it life's too short, gunna change" but none of them ever do, and I politely remind them all, "but you say it every time, like when x died and y died and z died = when will we all learn"?

Just trying to live for today with as few regrets as possible but plan just in case/hopefully for the tomorrows. To be honest if we were taken tomorrow, we have lived a wonderful life with very few regrets, lots of experiences,travels and fabulous memories, but we just want to remove a lot of the every day stressors now out of our lives moving forwards hence looking to retire early back to a more simplified life like we enjoyed the most in the late 70's and 80s for us. Ironic isn't it but we fondly recall when we had zero mortgage, but hardly any income to live on, couldn't afford to eat out or go on vacation, but they ironically with our first born were the happiest days of our lives = chopping wood for heat (couldn't afford using all coal), no central heating, single pane windows and walked a lot, beach combed and grew all our own eggs, veggies etc. Amazing that they are days we often reminisce about - long before being tied to todays technology, and a phone was a convenience thing not a "must answer now".

I hear your comments on a fee based financial advisor, I'm just nervous of paying someone and getting nothing of any worth back - had really bad results and experiences for many years in our 20's and early 30's with others managing our monies hence the reluctance but appreciate fee based unbiased is a bit different. How do you source a good one.

Once again really appreciate all the feedback especially those kindly wilingl to share if you were us "what would you do and why, expectations returns wise moving forwards in today's age etc if you were in our financial position". AA, exactly which ETFs etc and so on and so forth from the original post. I truly do read and digest all you write so thank youse one and all.


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## My Own Advisor (Sep 24, 2012)

@Willwemakeit,

"Will we make it" - yes.

First of all, congrats on your desire to get a hold of your finances...

For the most part, if I read your background correctly, you're in really good shape...

I recall ages 52 and 59?

These are your assets?

My TFSA Balance = Cash = $40,026 TOTAL ALL CASH = $40,026
Spouse TFSA Balance = Cash =C$33,433 TOTAL ALL CASH = $33,433

Good cash buffer!

My RRSP Balance = Securities = C$9,668 Cash = C$7,289 - TOTAL = C$16,957
Spouse RRSP = Cash = C$10,902 - TOTAL ALL CASH = $10,902 

C$ Margin Account = Securities = $127 Cash = $625 - TOTAL = C$752
US$ Margin Account =Securities = $53,000 Cash = $7,000 - TOTAL = US$60,000

Checking Account = We try to always maintain over $5,000 to avoid bank charges which seem astronomical today with charges for statements and monthly charges.

TD Travel Visa = use it for everything we can and pay it off each month but cost is $120/year for us both.

(Smart).

In addition to the above, you have $1.2M + coming your way from property sales?

$1.2M invested like this, should yield about $40,000+ per year and you can pick and choose when you draw down your capital:

50% invested in a dividend ETF like ZDV ~ $30,000 
25% invested in VXC (low-cost outside of Canada world stock ETF) ~ $6,000
25% invested in a low-cost bond ETF like VAB ~ $9,000

Add in CPP and OAS government benefits and you're pulling in close to $4,000+ per month after tax in retirement. That's pretty good, _and you can draw down your capital as you wish we markets are good_...

A "safe" and realistic rate of return going forward from stocks is 3%-4% real return. You should expect very little returns from bonds going forward, if any returns at all.

Just a very quick suggestion, as capital preservation for the next 20-30 years with major demographic shifts underway will be key - just my perspective of course!

Good luck!


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## Willwemakeit (Feb 7, 2016)

MOA = thank you so very much for the encouragement that you see we can achieve this and showing us possible hows to get there. Of course it goes without saying we were hoping for a lot more, but things don't always go quite as we plan for some reasons or another = namely the RE market that we delved in to create our NW at times, including especially now selling revenues off for tens of thousands less than we were on track for a year or more ago. Bad timing has cost us several hundred thousands to $1.5million we've calculated over time, but that's life/hindsight and no point dwelling or looking backwards on it. Got to deal with the here and now and what we might be able to do to secure our future moving forwards however long a time that may be.

Northern Raven, I so appreciated your thought out posts here as well and I'm sorry I forgot to address your question regarding leaving an estate behind. Of course we would absolutely love to leave monies behind for our darling daughter and future grandchildren if we can but we aren't going to scrimp in our own retirement severely unnecessary in order to do so. If anything she is so grateful for all we've done for her over the years right up until now in her mid twenties, she says she wouldn't hesitate to support us in future years as need be (we are very very very close knit). Of course who wants to ever be a drain in their old age on their children no matter what we've done for them in the past. Hence we are determined to make it 

In our ideal world we'd like to generate enough income off our investments to enable us to support ourselves and provide the additional $850 per month to contribute to our TFSA's - so indirectly see our overall investments continue to rise a little year over year. We don't live high on the hog by any means but we are not MrMoneyMustache either. We hardly eat out and when we do, tend to share meals so typically keep those to under $30 and only to sample local fare in newer areas, we hardly ever drink (Christmas sherry, one bottle of whiskey lasts 2 to 3 years, and maybe a couple dozen cans of beers a year to offer a visitor). RV travel and experiencing the natural beauty of N.A. plus our life long two bucket list items of: 3 month Australia trip and 6 to 8 week Europe trip and ideally the opportunity for a week/10 days every other year to Hawaii or a cruise would be a dream. However we are realistic enough to realize this might not be at all possible.

From calculations our ideal comfortable income would be $5,000 after tax per month to achieve our dreams and some wiggle room plus the lump sums for the two big trips put aside in addition. If the proverbial hit the fan though we could get this down to $3,000 per month, but it wouldn't enable us to do much at all of what we enjoy doing.

What's so scary to us today, is not that long ago it all seemed very doable and achievable to us, but alas our confidence today is shattered economics wise, and whilst we are not prepared to postpone because of reasons stated earlier, we won't be entering into that carefree environment worry free we aimed for it sadly feels.

As always thanks to you all for your input and giving us lots of food for thought and ongoing research.


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## lost in space (Aug 31, 2015)

I hear you on this point and it's a legitimate concern but to quote Northernraven 



> If you can find one, getting an experienced fee-based retirement planner to do what they do to develop a plan might be a cheap investment in peace of mind. They'd have experience in identifying expenses and spending patterns during retirement, tax efficiencies (RRSP, tax rates on dividends/capital gains/income, etc), and allocation strategies over time.


You can also go with a regular financial planner just be aware they make their money from the products you choose (so either way you pay). My recommendation is ask around for recommendations and then meet with several to see if there is a good fit. That last thing you want to do in retirement to put all you money in GICs because it feels safe, not only will you over pay in taxes but you risk running out of money. 

Good luck and do update us occasionally

Edit: I'm not familiar with British pensions but from others how have overseas pensions I expect once you turn 65 it will be paid into you Canadian bank account each month. It's the same with CPP I can collect it in Euros and my father in law has his German pension paid to him in dollars each month


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## NorthernRaven (Aug 4, 2010)

As a lark, you might want to consider something like the Globe & Mail's "Financial Facelift" feature, where they take people's situations like this and have financial planners make suggestions. They seem to gravitate towards your sorts of story, and you might have a decent shot at getting some free advice.

If you are comfortable with spreadsheets, you could try and roughly model things from the past. Choose a starting point, say 2001 right before the dotcom crash for a worst-case scenario. Take a lump sum to invest (say $800K), and come up with rough allocation percentages for bonds, Canadian TSX index, US equity index. With each row representing a year, for each class you'd have the starting amount, the yearly cash distribution, the year end value (probably the total return minus the distribution), etc. You'd sum up the cash distributions, subtract the tax at your marginal rate (accounting for reduced tax on Canadian dividends, etc). You'd get a sense of how much after-tax income the portfolio would have provided in the real world, how much of a cash slush fund you'd want to hold back to sweeten income in the early years, and you could play around with different proportions or for different years to get a feel for how that changes things. iShares has a TSX ETF with distribution and price info back to 2001, and probably a bond and S&P 500 one as well, and here's a handy source of various market returns (both real and nominal). Or there may be some tools out there on the web that do some sort of similar calculations.

The good news is that you have 2-3 times the median net worth of Canadian families in your age range, and probably approach the top 10% of all-age families in net worth terms. Turning that into an income stream and figuring out how much you can spend when will take some planning, but it is one of those "good problems" to have...


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## PrairieGal (Apr 2, 2011)

I work in an accounting office, and I often see the accountants counselling clients to take dividends instead of wages, and not contribute to CPP. Mentally I shake my head. 

Anyway, I second (or third or fourth) the advice you have been given to pay for the services of a fee-only financial planner. It will cost you a bit of money up front, but may save you money in the long run. You can always choose not to take the advice, if you don't want to. 

In order to have an income of $60,000 *after taxes *you are going to need more than a 1.2 million nest-egg, assuming a 4% safe withdrawal rate. So you are going to have to either re-work your budget, or figure out a way to come up with more money. This is where a financial planner can help you. 

Here is a list of fee-only financial planners published by Money Sense Magazine. http://www.moneysense.ca/save/financial-planning/where-to-find-a-fee-only-financial-planner/


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## Mechanic (Oct 29, 2013)

We have been self employed for many years. We have some money in RRSP's but for years we would ask our accountants whether we should put money in RRSP and the usual answer was that no, we didn't need to. On our last assessments there is still lots of RRSP room. We did always pay CPP however. Now we have liquidated most of the company assets, we live off dividends from our company. We don't get CPP yet as we are not yet old enough. I think the problem is you can end up with too much in the RRSP that has to come out eventually and can lead to large tax bills, at least that's the way I understand it. We are still kind of meandering along in early retirement with just investment income, although there have been some capital losses. We follow our accountant's advice mostly and do DIY investing. We have had a few FP's but in the end they were just salesmen so cashed in all the MF's and put everything into self-directed. You also have to have an accountant that you can trust to advise you. Just like the FP's we had one accounting firm that did less for us and made higher income for themselves. You have to really be cautious, the financial world is a minefield.


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## NorthernRaven (Aug 4, 2010)

PrairieGal said:


> In order to have an income of $60,000 *after taxes *you are going to need more than a 1.2 million nest-egg, assuming a 4% safe withdrawal rate. So you are going to have to either re-work your budget, or figure out a way to come up with more money. This is where a financial planner can help you.


There's another ~$175K in existing TFSA/RRSP/non-registered. Only the dividends (and eventual cap gains) from the invested RE proceeds would be taxable, so there could be quite low taxable income in some years. There would be OAS after 5 years for Mr. Willwemakeit, and depending on the plan, there might be a good chunk of the GIS amount. It looks like there would be 6-7 years after Mr. Willwemakeit qualifies for OAS before Mrs. Willwemakeit would be eligible for the GIS spousal allowance at 60. It might be possible to try and reduce taxable income during some of that time to maximize the amount of GIS collected.


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## Willwemakeit (Feb 7, 2016)

Thanks again to you all, you've no idea how I appreciate reading any and everything you kindly share in our quest. Huge thanks to BC Ed for sending those links to me also. 

Prairie gal "I work in an accounting office, and I often see the accountants counselling clients to take dividends instead of wages, and not contribute to CPP". This is exactly what we were told by the first accountant we were recommended to after arriving in Canada, who also advised us to operate everything through a numbered company for less taxation.

Mechanic so much of what you have written resonates with our own experiences, told not to add to RRSPs etc. Initially we transferred our UK private pension funds we'd paid into, with Standard Life UK over via our bank as locked and then unlocked, at local TD bank advice. Had the "nicest" MF rep you are ever likely to meet, that kindly put us in loaded funds, that lost a bunch of our money, hence why we ended up DIY with TD Waterhouse. I don't particularly like them, but then I don't particularly like any banks, insurance co's or mobile phone providers, but for ease we have kept everything financial now within TD.

I am more than happy with the right knowledge to keep our accounts DIY but wish to have them set up so that I am not so hands on daily as have been over the years. Been considering the Couch Potato Vanguard portfolio, but have been waiting hopefully to get an answer regarding VUN, as to what effects the price of this ticker in Canadian Dollars. I'm not clear with the exchange rate now being 30% over par, if the US$:C$ exchange rate impacts the purchase price of this ticker. If so, then I would automatically lose I'd assume 30% as and when we return back to par?

NorthernRaven - that's exactly why we wish to continue to max funds into our TFSA each and every year we can, as when we become eligible for OAS/GIS etc it won't be classified as income on any growth we can/have generated in there tax free - well for as long as they let the TFSA's continue in their present form! I was rather saddened when they only had it doubled for 2014 and then brought back down again. It'll be very many years before it'll hit $10K contribution rate again based on their new proposals of upping $500 on rounding every 'x' years.


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