# Average Canadian RRSP Value



## jamesbe

I was watching CTV news tonight. A report on the crazy pensions MPs get ($45k after just 9 years)

They mentioned in the report the average Canadian RRSP is $60,000!

Really? I don't know where or how they got this number, what are your thoughts! Has anyone seen numbers published, by stats can perhaps?


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## Sherlock

The number alone is pretty meaningless to me, since it includes everyone from the guy who just graduated and opened his RRSP, to the guy who has been working for 40+ years and is about to retire. It would be more interesting if the statistics could be broken down by age group.


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## MoneyGal

Here you go, Sherlock - the latest available data: 

http://www.fin.gc.ca/activty/pubs/pension/ref-bib/horner-eng.asp

I don't have time to summarize findings right now, but they're in there if you want to look for yourself.


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## Spidey

I'm pretty sure that average is just amongst those who actually have RRSPS. A significant percentage of the population don't have one.


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## OhGreatGuru

Plus people who have good pension plans don't have lot of RRSP room, nor do they need it. You really need an analysis of all retirement savings. But the cumulative amount of unusued RRSP room out there is shocking - I think about $600B the last time I checked.


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## MoneyGal

Only about 5% of aggregate RRSP room has been used in Canada. 

I spent a few minutes looking into the data in the report I linked. 

Here is the conclusion about the adequacy of retirement savings in Canadian households:


 About 30% of Canadian households are "low income" and will have their retirement savings needs (defined as replacing 100% of pre-retirement after-tax actual consumption levels...they use a relatively complex economic formula here) met through combinations of CPP, OAS and GIS - they don't need to do any additional saving


 High income earners (the top 5% of Canadians) are constrained in their capacity to effectively save for retirement, due to limits on RRSP contribution room


This leaves modest/middle income households - "Overall, this analysis suggests that* in the modest/middle earnings range about 40% of households are not saving enough for full maintenance of their pre-retirement consumption, and about 28% face significant shortfalls in their living standards*."


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## Daniel A.

I used all of my RRSP room but due to a private pension it did not add up to much. Today I consider the RRSP my emergency fund or major purchase fund.

Day to day the pension I receive monthly more than covers living.


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## Oxidd1979

MoneyGal said:


> High income earners (the top 5% of Canadians) are constrained in their capacity to effectively save for retirement, due to limits on RRSP contribution room


What household earnings makes you part of the 5%?


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## kcowan

MoneyGal said:


> This leaves modest/middle income households - "Overall, this analysis suggests that* in the modest/middle earnings range about 40% of households are not saving enough for full maintenance of their pre-retirement consumption, and about 28% face significant shortfalls in their living standards*."


OK but this class also has CPP and OAS. Plus in our experience, we live on 30%-40% of our final earnings. The last 10 years of work really gave us much disposible/saveable income.

I have to think that most of these studies are aimed at supporting the financial services industry. More savings equals more fees.


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## MoneyGal

Yes, and the report takes CPP and OAS into account. 

They are defining "saving adequately" as "being able to replace [a certain percentage of pre-retirement income, adjusted for various factors] in retirement [based on assumptions about rate of return and more]."

I personally think they've set the replacement bar a little too high in the report, but this is the most complex analysis I've seen on this topic...for example, they distinguish household wealth and savings rates by household type (single, married or not, parent or not) as well as by age. It's worth skimming.


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## uptoolate

Oxidd1979 said:


> What household earnings makes you part of the 5%?


A Canadian with an annual income of $89,000 qualifies for membership in the exclusive club that includes the top 5 per cent of the nation's earners.

In order to make it into the top 1 per cent of earners, or the top 237,000 people, a Canadian would have to earn $181,000.

From statsCan based on 2004 tax data. 89K seems low to me to be in the top 5% but that is what they say. This was published in 2007 so the numbers would have moved up a bit but not dramatically given conditions over the last 5 years.


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## CanadianCapitalist

To address OP's question, StatsCan publishes the average and median value of RRSPs. Look up the Survey of Financial Security report. I remembered writing about it long time back. According to 2005 data:

Average RRSP value: $76,600
Median RRSP value: $30,000

http://www.canadiancapitalist.com/wealth-of-canadians-assets/


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## OhGreatGuru

MoneyGal said:


> ...
> 
> 
> High income earners (the top 5% of Canadians) are constrained in their capacity to effectively save for retirement, due to limits on RRSP contribution room
> 
> ..


The RRSP limit for 2011 was $22,450, so the only people being "constrained" had to make over $124,722. And they aren't being constrained from saving for retirement, they are just being constrained from doing so in a tax-deferred account. So don't feel too sorry for them.


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## MoneyGal

No feelings of sorrow were implied or should be inferred.


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## cardhu

Oxidd1979 said:


> What household earnings makes you part of the 5%?


RRSP contribution room is based on individual income, not household income ... and the uppermost 5% begins at about $110-$120k total income ... note that the actual income may vary from that amount, because certain classes of income are either grossed up (dividends) or partially excluded (cap gains). 

The RRSP contribution limit is 18% of earned income (assuming no pension adjustment), for those with income up to about $127k ... beyond that level of income, the contribution limit remains capped at $22,970 ... so that someone earning $150k/yr can only contribute 15.3%, someone earning $200k/yr can only contribute 11.5%, etc. 



kcowan said:


> OK but this class also has CPP and OAS.


... as do many of the upper 5% ... there is no clawback on CPP, and the OAS clawback affects far fewer than 5% of seniors. 



uptoolate said:


> From statsCan based on 2004 tax data.


More recent (2009) raw data available here.
Hard to pinpoint a precise 1% threshold, but its likely north of $200k now ... fully 2.07% of tax filers had over $150k income, but only 0.76% had over $250k. 



toolbox said:


> So don't feel too sorry for them.


I wondered how long that would take ... bear in mind toolbox, that the highest earning 5% are already paying well over 40% of ALL income taxes in this country ... ... so on top of paying a disproportionately greater share of income tax, we are also more limited in our ability to save for retirement ... I agree that it doesn’t mean saving can’t occur, only that tax sheltering opportunities are disproportionately offered to those who aren’t really paying that much tax to begin with.


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## Daniel A.

Before retiring I was working in the top 5% always had been.

Due to the company pension my RRSP limit room was sitting between 6-7 thousand a year.
The taxes both my wife and I paid every year were north of 50,000.00 annually.
My CPP annual contribution was normally paid by the end of April I would have been more than happy to continue paying into CPP for the entire year.

EI was also paid in full at the same time but forty years of paying and never collecting a penny ever.

I think I've paid far more than my share for the services I don't use to support others.



In 2009 I paid 35000,00 in tax, my payroll deductions totaled 44,000.00 and no I'm not rich but am doing fine.
I do understand those that think the top 5% must have it all.
The other side is those that don't even make what I paid in deductions pay a very small portion of what it costs to provide services and will likely use far more than what they paid.


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## loggedout

Is it fair to say that the "rich" will have to pay more than their "fair" share one way or the other? They will either have to pay for the "safety nets" utilized by poorer people and/or they will to pay with increased security measures to protect/isolate themselves from the masses and their afflictions when they don't have those "safety nets".


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## Mall Guy

So I wonder on a forum such as this, is the population proportionate or disproportionate to the population of Canada (i.e are there more 5%, 1%, .76% and even .01% here . . . even if reclassified by age group ?)


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## Daniel A.

Mall Guy said:


> So I wonder on a forum such as this, is the population proportionate or disproportionate to the population of Canada (i.e are there more 5%, 1%, .76% and even .01% here . . . even if reclassified by age group ?)


That's a good question to ask I've put my numbers out. Almost feel like Mitt Romney


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## donald

I wonder how i stack up to the average 32 yr old.
-150k-tfsa,rsp,non
-125k(in my ltd business acct)i know this does'nt really "count"always fluctuating,but it is inside my corp currently.Paying through bonus and divs no salary.
-84k cash
-no real estate(sold)currently renting.
359k net worth partially un taxed.(corp acct)
-zero debt,both business and personally.

Wonder if im in the top 5% under 35?maybe?grade 10 education to boot lol.


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## somecanuck

donald said:


> I wonder how i stack up to the average 32 yr old.
> -150k-tfsa,rsp,non
> -125k(in my ltd business acct)i know this does'nt really "count"always fluctuating,but it is inside my corp currently.Paying through bonus and divs no salary.
> -84k cash
> -no real estate(sold)currently renting.
> 359k net worth partially un taxed.(corp acct)
> -zero debt,both business and personally.
> 
> Wonder if im in the top 5% under 35?maybe?grade 10 education to boot lol.


You've got me beat at 33, and everyone I know ages 30-33 as well. Many of them are doctors at work so they'll get high eventually (assuming they aren't stupid with their money), but they all have loans at this point. Mind me asking what you do?


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## Daniel A.

Mall Guy is asking about income not assets.


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## donald

Somecanuk-I own a small(5)employees contracting business in the residential sector,house framing & roofing some other general contracting as well from time to time(drywall ect)I should note from nov-march my output is probably only 20% of my total revenue so its got a seasonality asspect as well.

My business is growing thought so it's changing but i'm almost fully off the tools which is a huge transistion for me...(my dad is invoulved but stepping back)I would give my left foot to have a mba but im learning on the fly.I might have a head start maybe but jumping to the next level for me is fighting odds(enter:red seal tickets,cor certified,bonding ect im slightly pinned in contracting in residential if one can cross over into commerical that's where the wealth is ie subbing off snc lavlin for example,not that id be close to being in that league)

But i got off track income i draw about 80k yr...but i don't have standard paycheuqes just a lump some yearly dividend(which i get @ the end of the month yay!and a bonus)I'm single and no kids also i should mention,Ive often wondered how much a net 2 week cheque would look for a salary on 80k....about 28 hun roughly?


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## The_Mechanic

I've always wondered where I stand too but can't seem to find any stats.

I'm 26 and make 56k a year. I wonder what percentage of Canadians make that salary, and better yet, what percentage of Canadians my age...does anyone know where I can find that info?

I can't really compare to what I see on here since everybody on here seems to be really freaking rich !


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## Daniel A.

donald said:


> But i got off track income i draw about 80k yr...but i don't have standard paycheuqes just a lump some yearly dividend(which i get @ the end of the month yay!and a bonus)I'm single and no kids also i should mention,Ive often wondered how much a net 2 week cheque would look for a salary on 80k....about 28 hun roughly?


My wife is in that range paid every two weeks as an employee, average after deductions 4500.00 per month.


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## Daniel A.

The_Mechanic said:


> I've always wondered where I stand too but can't seem to find any stats.
> 
> I'm 26 and make 56k a year. I wonder what percentage of Canadians make that salary, and better yet, what percentage of Canadians my age...does anyone know where I can find that info?
> 
> I can't really compare to what I see on here since everybody on here seems to be really freaking rich !


Don't underestimate yourself, if either of my kids made that they would consider it rich. Everything is relative and that's why it's nice to have this forum.


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## The_Mechanic

Daniel A. said:


> Don't underestimate yourself, if either of my kids made that they would consider it rich. Everything is relative and that's why it's nice to have this forum.



That is true! My dad keeps telling me i'm in the top 1% of poeple my age, but I just can't see it. Sure I have a ton of friends that dont make anywhere near what I make, but then again I have friends making upwards of 90k....Its just hard to figure out where exactly I stand..


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## donald

Thanks daniel thought i was in the ball park.Hey mechanic(this is m.o)I'm pretty sure your up there(guys)like us,assuming your a trade by your name we have to make or 30s ''count"Give you an example:i know a c.g.a that just finished her designation and she is @ a private firm making roughly 52k/yr....I've got grade 10 and picked up a hammer @ 18yrs old for 7.00 bucks a hr....were both 32...I make 30k more than her right now and have been blowing by her through out my twenties(she was knee deep in text books and i was shot gunning beers)It pisses her off(my sister)anyways "we"(assuming your a mech)kinda tap out thou now and i know that it's likely my sister and i will slowly be drifting together and odds are when we get into our 40s she will probably be 30k up on me.(if my business levels off)

Were up there now but the landscape with income wages will shift and a mech/carpenter won't be Top(playing odds/everything equal)But @ the same time we could be carrying a 250k portfolio around and chances are my sis won't catch me but than again she might sign a morgage for a 500k house and be house poor....I'm rambling but @ the end of the day it is really true what they say:it's not what you make it's what you keep....Your 4k ahead of a c.g.a that's 32 if thats any scale to go off of(she is fresh thou)


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## Oilers82

donald said:


> Thanks daniel thought i was in the ball park.Hey mechanic(this is m.o)I'm pretty sure your up there(guys)like us,assuming your a trade by your name we have to make or 30s ''count"Give you an example:i know a c.g.a that just finished her designation and she is @ a private firm making roughly 52k/yr....I've got grade 10 and picked up a hammer @ 18yrs old for 7.00 bucks a hr....were both 32...I make 30k more than her right now and have been blowing by her through out my twenties(she was knee deep in text books and i was shot gunning beers)It pisses her off(my sister)anyways "we"(assuming your a mech)kinda tap out thou now and i know that it's likely my sister and i will slowly be drifting together and odds are when we get into our 40s she will probably be 30k up on me.(if my business levels off)
> 
> Were up there now but the landscape with income wages will shift and a mech/carpenter won't be Top(playing odds/everything equal)But @ the same time we could be carrying a 250k portfolio around and chances are my sis won't catch me but than again she might sign a morgage for a 500k house and be house poor....I'm rambling but @ the end of the day it is really true what they say:it's not what you make it's what you keep....Your 4k ahead of a c.g.a that's 32 if thats any scale to go off of(she is fresh thou)


I think 32 is pretty late for a CGA to just be finishing. That'd be well behind most accountants who get their designation at age 25 or 26.

But the jist of your post is correct...I think trades people definitely have a huge advantage on white-collar workers in the earlier years. If you guys are wise with investing and spending, it will take many years for a person like an accountant, lawyer or doctor to catch up in terms of net worth. The salaries tend to catch up quickly but alas, when high salary comes later in life, it often comes with high spending habits to match (whether it be peer influence or simply buying houses, having kids, etc).


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## The_Mechanic

You are correct I am an auto mechanic. I havent topped out yet but i'm getting damn close. Once I hit 60-64k i'll be pretty close to the top salaray for my trade in my area. For this reason i'm looking to get my assets up there as quick as possible. I've currently got no debt whatsoever and about 20k in various investments. Hopefully i've got the head start that will keep me afloat in the years to come.


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## MoMoney

uptoolate said:


> A Canadian with an annual income of $89,000 qualifies for membership in the exclusive club that includes the top 5 per cent of the nation's earners.
> 
> In order to make it into the top 1 per cent of earners, or the top 237,000 people, a Canadian would have to earn $181,000.
> 
> From statsCan based on 2004 tax data. 89K seems low to me to be in the top 5% but that is what they say. This was published in 2007 so the numbers would have moved up a bit but not dramatically given conditions over the last 5 years.


These numbers are misleading. There are far more high income earners than these statistics would have you believe.

The reason is because a very large percentage of high income earners shield their earnings within corporations and other tax deferral/splitting vehicles. 

Take Donald from this thread for example, the majority of his net worth is within his corporation. 

The dividend he receives is the only actually declared income that would make it within these types of statistics.


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## Erome

If there are doctors here, would anyone mind giving me a financial check up?



I'm 27, with an income of 84k / year. I work in as a technical specialist for a group involved in medical sales. I started my career in 2008.

60k in RRSPs
5k in TFSA
Bought my house for 309k in 2009. Have 250k left on the mortgage.
No debts, CC, lines of credit etc.
No DB pension, but contributions through work. I fill my RRSP cont. room each year (for the last 4 years).

In 2012 I suspect I'll hit my RRSP contribution limit again, as well as add 10k to the TFSA. I also opted to increase my mortgage monthly payment by 20% couple months ago so I'm now doing $1450 / month as opposed to the $1200 / month.


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## Four Pillars

Erome said:


> If there are doctors here, would anyone mind giving me a financial check up?
> 
> 
> 
> I'm 27, with an income of 84k / year. I work in as a technical specialist for a group involved in medical sales. I started my career in 2008.
> 
> 60k in RRSPs
> 5k in TFSA
> Bought my house for 309k in 2009. Have 250k left on the mortgage.
> No debts, CC, lines of credit etc.
> No DB pension, but contributions through work. I fill my RRSP cont. room each year (for the last 4 years).
> 
> In 2012 I suspect I'll hit my RRSP contribution limit again, as well as add 10k to the TFSA. I also opted to increase my mortgage monthly payment by 20% couple months ago so I'm now doing $1450 / month as opposed to the $1200 / month.


Not sure why you wouldn't start a new thread, since your question is a new topic.

Offhand I'd say you are doing fine. Keep maxing out the RRSP, pay some extra on the mortgage and you are gold. You should be able to pay off the mortgage by the time you are 40. 45 at the very latest.


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## donald

Doc your doing soild,how did you manage zero debt?(with schooling) do you have any insight on Mdt stock/company?Ive been looking @ it and the company is really going after the brazil market......You have any inside pulse on them?Any insights on some of the big medical companies?


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## Spidey

MoneySense has an annual issue that tells how one stacks up compared to others in their stage of life. (I think this edition usually comes out in the spring.) I find it very interesting. The yardstick is fairly low regarding net-worth and investments. I usually come out pretty mediocre regarding salary (probably even more so now) but very high regarding net-worth.


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## steve41

For a 4% rate, 2% inflation, here is your 'die-broke at 95' BQ....

If you retire at 55 it is $38704
-retire at 60, $42982
-retire at 65, $46630

This gives you a general idea of your spending/lifestyle (constant over time) adjusted for inflation, salary indexed to inflation, BC, normal CPP&OAS expectation..... This is a fairly conservative plan.


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## Erome

Hey guys,

My apologies if my post didn't fit in this thread. It seemed like a 'how are RRSPs' kind of stacking up thread.

For me I didn't do anything crazy, even though I have quite a few years of schooling behind me.

During school I waitered all the time and paid for school with most of that. Applied for every single scholarship / bursary I could possibly conceive of. Banked all the award money until I was done. Took that award money to buy a house. Paid all my student debt off after the house (brother is a cga who told me to do my student loan last). The student debt ( 20k> ) was done within a year and a half.

As far as companies I don't really trade a whole lot. And any research I do I generally ignore any healthcare based stuff cause my career is healthcare exposed and I don't want to double dip. On the whole though I can say that healthcare was doing well in the last couple of years though...


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## loggedout

donald said:


> I wonder how i stack up to the average 32 yr old.
> -150k-tfsa,rsp,non
> -125k(in my ltd business acct)i know this does'nt really "count"always fluctuating,but it is inside my corp currently.Paying through bonus and divs no salary.
> -84k cash
> -no real estate(sold)currently renting.
> 359k net worth partially un taxed.(corp acct)
> -zero debt,both business and personally.
> 
> Wonder if im in the top 5% under 35?maybe?grade 10 education to boot lol.


I'd assume you're above average. 

I have a similar profile.

310k networth (150k in basically cash, 30k in stock, 130k in retirement (pension + rrsp) and no debt) ... I'm not sure if I'll ever see half of that retirement locked up in a pension by the time I'm ready to retire though. 

I've never made much money, if any, from investing, have never owned real estate, or my own business...so it's mainly from working (engineer) and saving. I'm kind of concerned about my future income though and increasing costs of living. Getting back to the topic, I kind of have a feeling that by the time I reach retirement, I will need a lot more because many of our services will be cut by then.


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## Pigzfly

I always wonder about the "other half" ...and by that, I mean the bottom 3/4, as I generally seem surrounded by the upper percents.
There are many people around me who earn very little and live on very little, but for most of them it is a life phase which they will move past (ski bumming). Everybody else around rakes it in with energy and mining money.
Both my spouse and I also grew up in affluent neighbourhoods.


For what it's worth, I'm 26 and currently earning 54K, maybe 60 after bonuses and taxable benefits. I am not working in my field due to location and am rather underemployed compared to my friends from school (even vs a starting salary, let alone their increased earnings over the first 3 years). My spouse makes substantially more. He would be top 5% if using the 89K mark, household income we're also pretty up there. However, it's normal, if not a shade under due to my employment, for the circles that we run in. If we move, we will maintain this/increase my side and move closer to friends who make substantially less. OR we will move to a different location and remain around friends who make a lot of money. 

Our net worth is probably 150K, though I should note that I have brought in this kind of income for less than a year, less than 15K before.


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## loggedout

How are people making so much a few years out of school? Are you out west Pigzfly?

I don't know if knowing what people earn doesn't make me jealous lol. I started off making 50k out of school and now make 85k, not including pension, 7 years later, granted in the two past years I haven't had a raise due to an expired collective bargaining agreement but still hard not to feel left behind. I've had years where I've made a lot more than my base with ot so I am not totally discontent and consider myself fortunate when I don't compare with others. 

As for folks just making it, the bottom 3/4, I know many. The ones I know are mainly working class immigrants working low paying jobs. A lot of them pool resources, live in multi family homes, etc. They may not care about RRSPs because their children are their retirement.


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## Maybe Later

The time spent in school certainly affects net worth as well as salary.

When I was 20 I made 10k a year, went to school and lived at home (undergrad).
When I was 24 I made 20k as a grad student. 
When I was 28 it was 40k at a U.S. University as a post-doc (think intern if you're unsure what that is)

I didn't start my "real" job until my 30s and seven years in I'm still one of the youngest. I earn a good living now, but I didn't get married, buy a house, have kids, etc. until much later. It just changes how you look at net worth. It's less of a snapshot of right now and more like a marker on the road for me. I'll be pleased when we max our RRSPs in the next year or two, but it's just one piece of the puzzle. Since we bought a house in our 30s at the same financial stage of someone in their 20s who didn't go to school we are almost a decade behind there. it just means having a plan and taking advantage of what opportunities are presented.


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## Pigzfly

@logged out - Yes, I am out west. However, for degree-related employment for myself, it wouldn't really matter geographically where I was, other than the maritimes.


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## Mall Guy

Pigzfly said:


> @logged out - Yes, I am out west. However, for degree-related employment for myself, it wouldn't really matter geographically where I was, other than the maritimes.


Not sure that's true anymore, oil and gas, mega hydro electric projects, $25 B ship building, and Newfoundland is a "have" province at the moment . . . at the same time, Fort McMoney is doing wonder for the maritime economy. . . 3 weeks on, 3 weeks off, $100,000/year . . . anyone been on an eastbound Westjet flight lately ?


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