# Where do you expect your retirement income with come from?



## Addy (Mar 12, 2010)

My husband and I have pensions (his will be significant, mine will be maybe $400/m in todays dollars, give or take), and we have rental property we hope to keep into retirement. We have dividend income (not huge right now, but we are slowly increasing this when we can). These will be our three main sources of retirement income. In todays dollars we estimate/guesstimate this will be around $6000 to $7000/m after expenses and income tax. I'm not so concerned about others numbers, but put our numbers out there in case others wish to share as well.

I am curious especially those with pensions, are you relying solely on your pension income, or do you have other means of income planned for your retirement?


----------



## AltaRed (Jun 8, 2009)

Retired almost 9 years. About 40% DB/CPP pension income and 60% investment income/capital. Will become progressively more investment income because DB pension is not COLA'd.


----------



## marina628 (Dec 14, 2010)

We have no pensions so counting on what we have accumulated over the years , mostly will be dividends from our business .


----------



## IFITSTOBEITSUP2ME (Mar 6, 2015)

Not sure if this will help you Addy but we have zero pensions based on how our businesses were structured so will only be entitled to maybe if we qualify OAS and GIS in our later years plus whatever we manage to squirrel aways in savings. As for creating income from that lump sum, at this stage we really don't have a clue whether it will be dividends or minuscule returns from a safer haven coupled with erosion of our capital. 

The way some of the dividends have been cut back recently, we are now sceptical how things might pan out in that regards, and what we originally thought many moons ago based on deep historical returns (6-8% average not being uncommon) we'd get by placing in HISA, well we all know where interest rates have gone in that regards in recent years. One minute we think we should be in a mix of Vanguard type ETFs and then when we check blocks of time going back historically we think knowing our luck the time we pull the trigger on that they'll plummet and be at historical lows for a period when we need them or worse still negative.

In the ideal world it would be wonderful to find away to generate enough after tax income from our investments to enable us to hopefully never touch the capital and if anything see it grow somewhat based on lower than return withdrawals. We are totally at a loss on what we should do to be honest. Sounds as though you will have a good monthly income though - what age are you now and when do you intend to retire. Like you we have a couple of revenues but it is likely we will sell these to add to the kitty as we are intending to be travelling more than locally to handle them.


----------



## Daniel A. (Mar 20, 2011)

Just pension income here Addy.

Don't know how the numbers look in after tax but gross pension DB,CPP,OAS , comes out to 7200.00 per month and my wife does have RRSP money sitting on the side. 
We have been fortunate to both have DB pensions and her CPP is as good as mine.
The income split from all works out to 60% for me and 40% for her.

Only because of the pensions we never really had a need to save much.


----------



## Spudd (Oct 11, 2011)

I'll have a smallish pension, expect to get some CPP & OAS, and the rest will come from dividends and drawdown of capital.


----------



## heyjude (May 16, 2009)

Investments and rental income. No pension here. Not counting on CPP (insufficient years working in Canada) or OAS (likely to be completely clawed back unless I can completely spend my RRSP before age 71).


----------



## striptorn (Mar 23, 2015)

Addy said:


> ...our three main sources of retirement income... we estimate/guesstimate ... will be around $6000 to $7000/m after expenses and income tax.


We have no pensions, but are aiming for the same after-tax amount as you...which should be fairly comfortable.
In Ontario to net $7k per month, I figure that would be equivalent to $51k per year each before taxes (worst case I figure).
Subtract about $7k per person per year for CPP started at age 60, and we need to build up RRSPs and TFSAs so that they can support annual withdrawals totalling $88k per year.

Haven't come up with any strategy on how to withdraw from my couch potato portfolio yet ... but I figure we have 6 or 8 years to go first.


----------



## piano mom (Jan 18, 2012)

heyjude said:


> or OAS (likely to be completely clawed back unless I can completely spend my RRSP before age 71).


You don't have to spend your RRSP savings, just transfer them into TFSA or nonregistered account.

My husband plans to retire at 55 with company db pension and slowly and evenly transfer all his RRSP. This will lower taxes when his CPP and OAS kicks in later @70.

In summary, 2 db pensions totalling $3500 plus $3500 dividends monthly from 55 to 70. Add both our CPP and OAS ($2400) @70 as earlier payments will trigger too much taxes. 

Let's hope we will be on track as this sum will be more than enough for us to live comfortably


----------



## Islenska (May 4, 2011)

No pensions here but the usual CPP,OAS and nice nest egg return from HoldCo will be $80K give or take...

Do notice our spending tapering off as the kids are more independent and we enjoy less pricey things

No new skidoos etc....


----------



## heyjude (May 16, 2009)

piano mom said:


> You don't have to spend your RRSP savings, just transfer them into TFSA or nonregistered account.


You are correct, of course. I just need to withdraw my RRSPs and pay the tax on them. Then I can do whatever I like with what is left. I also have a LIRA and I can withdraw only 50% of that, leaving the remainder in a PRIF, to be withdrawn gradually.


----------



## jambo411 (Apr 6, 2009)

A DB pension, CPP in 6 months and OAS in 4.5 years. We will keep running our small business for at least 3 years when our current contract expires. DW draws a salary to accumulate RRSP room and CPP. Just started bleeding off RRSP to fund TFSA, DW funding hers from income for now. Her retirement to be funded by RRSP, dividend income, CCP and OAS. 

Still trying to figure out the De-accumulating stage of life with ETF's.


----------



## OldPro (Feb 25, 2015)

Piano mom, do the math on taking CPP and OAS at 70 rather than at 60 and 65. 
http://retirehappy.ca/four-reasons-why-you-should-still-take-cpp-early-post-2011-rules/

You are putting emphasis on taxes and I understand that but don't lose site of the bet you're making. You're betting you will live long enough after 70 to collect enough from CPP to be more than you would get if you started taking it at 60 and OAS at 65. Even minus the tax, that means you are betting on living beyond the 80s somewhere. Have you heard the expresssion, "a bird in the hand is worth 2 in the bush".

Addy, you may also want to consider supplementing income in retirement. Not all income in retirement has to necessarily come from what was arranged before retirement. The only caveat I would add in terms of supplementing income is to try and never do something that pays less than you would have been willing to work for before retirement. An alternative to payment is 'payment in kind' and that can often be more valuable than payment in $.

For example, some people who RV fulltime will try to get a 'job' as a Camp Host which simply means they greet new arrivals, collect payments perhaps, etc. In return they stay rent free. As another example, in the past I have been paid to go sailing when a sailing school ran sailing courses in the Caribbean and wanted a liveaboard instructor. Obviously, I had to be qualifed to do that. The point is that a little thinking outside the box as to what you can do that is worthwhile can be very useful. Others may have some similar ideas that they are thinking about, besides just collecting pensions and clipping coupons.


----------



## GreatLaker (Mar 23, 2014)

jambo411 said:


> Still trying to figure out the De-accumulating stage of life with ETF's.


I found this to be a good article. It clarifies how to use a cash wedge strategy with ETFs. 
http://www.moneysense.ca/retire/selling-etfs-to-generate-retirement-income


----------



## Daniel A. (Mar 20, 2011)

Good link OldPro.

This is my take.
I'm waiting till 64 for my CPP or 63 betting on seeing at least 80 years of living but could see 85.

My wife started her CPP at 60 dumping the money into her RRSP account as she is still working it is a way of getting the money and avoiding the tax on her six figure income.
In my case I've stopped working and only have the dropout years to consider and no RRSP room to work with. 
For me monthly income fully indexed is more important and something the charts have not factored in unless I missed it.


----------



## Sherlock (Apr 18, 2010)

I'm just gonna have a lot of kids and guilt them into taking care of me.


----------



## Itchy54 (Feb 12, 2012)

59-65 DB pensions (one normal, one tiny...), draw down RRSP, pensions will be about 4300 before taxes and honestly that is all we spend now, actually less. For our holidays we will use RRSP money as we want that gone before OAS...still playing with those numbers. Our monthly spending has been $3000 for over three years....(not including the one big holiday, but includes smaller ones)

65 and onwards will be pensions (now smaller with the bridge gone) but there will be one more very small one (job as a teen) and CPP and OAS which will give us a before tax income of about $5600...so really all the money we have saved will be fun money!!


----------



## gibor365 (Apr 1, 2011)

Itchy, if I understand correctly , in order to avoid OAS clawback, you individual net income for 2014, should be below the threshold of $71,592?
and this is exclide TFSAs>?


----------



## Maltese (Apr 22, 2009)

I recently retired at age 58.5 years with a DBP that nets $37,000/year after 35 years of service with a provincial government. It is not indexed to inflation. I plan to live strictly on the pension money. CPP at 60 and OAS at 65 will provide enough funds to ensure that I receive a constant $37,000/year (in today's dollars) after inflation in the future.

I am divorced and on my own.


----------



## piano mom (Jan 18, 2012)

OldPro said:


> Piano mom, do the math on taking CPP and OAS at 70 rather than at 60 and 65.
> http://retirehappy.ca/four-reasons-why-you-should-still-take-cpp-early-post-2011-rules/
> 
> You are putting emphasis on taxes and I understand that but don't lose site of the bet you're making. You're betting you will live long enough after 70 to collect enough from CPP to be more than you would get if you started taking it at 60 and OAS at 65. Even minus the tax, that means you are betting on living beyond the 80s somewhere. Have you heard the expresssion, "a bird in the hand is worth 2 in the bush".


True enough OldPro. Well, this is just what we plan for now. We are 45 and 46 years old. If our health becomes a problem, we may start CPP earlier. Thanks for your advice


----------



## GreatLaker (Mar 23, 2014)

Men plan and the gods laugh, but here's my plan anyway:

Based on retiring at 60, planning to age 90, taking CPP at 60, having 20 years service in a non-indexed, non-contributory DB pension and a small LIRA from a previous job, about 2/3 of my income will come from personal savings and 1/3 from work and govt pensions.

RRIF/LIF: 33%, non-registered savings: 33%, work pension: 18%, CPP & OAS: 16% of total. I could provide more detail on how this changes over time due to OAS timing and RIF/LIF mandatory withdrawals if anyone is interested.

This plan has a very generous spending component. I could probably cut actual expenses by 25% from what is in the plan if the economy or markets really went south.


----------



## Itchy54 (Feb 12, 2012)

gibor said:


> Itchy, if I understand correctly , in order to avoid OAS clawback, you individual net income for 2014, should be below the threshold of $71,592?
> and this is exclide TFSAs>?


True. If one of us were to die then pensions plus any rrsp mandatory withdraw(if we did not get rid of these early) would put the remaining person in a clawback situation. I see this with my dad now, he gets a military pension, a little over 3000/mth, cpp and OAS (clawback because of his RRIF.). He loses 300/month because of this.
As his power of attorney ( he had a stroke in October ) I will be doing his taxes this year. This will show me a lot....


----------



## My Own Advisor (Sep 24, 2012)

@GreatLaker,

Very diversified I think!

You have:
-CPP at 60
-20 years of a DB plan
-small LIRA
-RRIF/LIF
-OAS

Among all this a 25% spending cushion. Sounds like a great plan and most folks could only be so lucky.


----------



## jambo411 (Apr 6, 2009)

GreatLaker said:


> I found this to be a good article. It clarifies how to use a cash wedge strategy with ETFs.
> http://www.moneysense.ca/retire/selling-etfs-to-generate-retirement-income


Thanks for that. I had read it and it makes sense. It just seems that the ratio of blogs and articles for the saving stage versus the spending stage is several hundred to one right now. I am looking forward for that ratio to change a bit.


----------



## GreatLaker (Mar 23, 2014)

@ jambo411 & My Own Advisor:
Have you ever read The Real Retirement by Fred Vettese and Bill Morneau? It is an excellent book for someone that wants to understand how much is needed for retirement and where it will come from.
http://ca.wiley.com/WileyCDA/WileyTitle/productCd-111849864X.html

That and The Four Pillars of Investment are my 2 favourite financial books.


----------



## gibor365 (Apr 1, 2011)

Our retirement income most likely will come from dividends/interest + some principal withdrawals (in 2-6% range depends on specific situation). If my wife works until DB, she'll get some DB, if not, more dividends will be coming from LIF/RRIF... at 60 gonna apply for CPP, 67 for OAS...


----------



## dave0823 (Aug 26, 2014)

I also have no pensions but I will receive American Social Security, CPP and OAS which I plan to take at 65. My wife will also receive CPP, OAS and half of my American Social Security at age 67 (I'm 57 and she is 54). Dividend income from my US IRA will supplement my income in addition to our cash savings, RRSP's, LIRA and my wife's TSFA.


----------



## newfoundlander61 (Feb 6, 2011)

Retired from the Army in 2000 and have been receiving a pension since then. Its a Defined Benefit Pension with indexing that first kicks in at age 60, I am now 53 no idea what the increase will be. Wife is fully retired and getting CPP & OAS, debt free but I still work 37.5 hrs per week at a building main job, maxing out my TFSA. Don't use an RRSP, will start drawing CPP early at age 60 due to the clawback with my military pension at age 65. We should be fine with this setup but will adjust as we go along if necessary.


----------



## Eclectic12 (Oct 20, 2010)

gibor said:


> ... If my wife works until DB, she'll get some DB ...


The wording makes it sound like if she stops working before the earliest allowed retirement date, she gets nothing.

My understanding is that where she has earned DB pension credits plus stays a member of the DB pension - she'll get some DB pension paid as early as the plan allows and she requests it. This is regardless of whether she's moved on to another company or stopped working before the DB pension the earliest start date for the pension.

The ways I am aware of that she would not be paid the DB pension is if she leaves the plan (she would take the commuted value instead) or if she dies (usually there is a payout on death of an amount).


So likely there's either going to be pension money paid or some sort of payout, no matter what she does.


Cheers


----------



## Addy (Mar 12, 2010)

newfoundlander61 said:


> Retired from the Army in 2000 and have been receiving a pension since then. Its a Defined Benefit Pension with indexing that first kicks in at age 60, I am now 53 no idea what the increase will be. Wife is fully retired and getting CPP & OAS, debt free but I still work 37.5 hrs per week at a building main job, maxing out my TFSA. Don't use an RRSP, will start drawing CPP early at age 60 due to the clawback with my military pension at age 65. We should be fine with this setup but will adjust as we go along if necessary.


My husband is also military but got in on the new 25 year pension plan. He was in the reserves and civy world for a long time and didn't go reg force until he was in his early 30's. He plans to retire at age 54 with 3 years credit for reserve time (or I should say, I plan for him to retire at age 54, he probably wants to stay in). For some reason I'm not comfortable with only his pension (and my small pension) as income when we retire. I know many do it and are fine, I guess it depends where we are in life and what are kids are up to and how much they are costing us.


----------



## heyjude (May 16, 2009)

Here is a recent webinar from Darryl Diamond about the Retirement Income Blueprint. 

http://boomersblueprint.com/webinar

I am not a client, but I have read the book and I am using the philosophy. For example, having retired at 55, without a DB pension, I am unlocking my LIRA while staying in a low tax bracket.


----------



## 50/50 (Mar 30, 2013)

I think i made mistakes over the past 20 years : 

1,I didn't buy any investments other then GICS. It would have been easier to start slow , monthly contributions, over the years into stocks , etf 
2,I left all my cash in my company. paid fewer taxes, but lower wages(i took dividends) means low cpp , low rrsps
3,all i have is a pool of cash and i will be forced to be an employee of my own company for income.

I have no idea on how to go about "fixing" my mistakes. My only salvation is that I may have enough cash (gics) to achieve a no gamble retirement in a few years.


----------



## OnlyMyOpinion (Sep 1, 2013)

50/50 said:


> I think i made mistakes over the past 20 years :
> 1,I didn't buy any investments other then GICS. It would have been easier to start slow , monthly contributions, over the years into stocks , etf
> 2,I left all my cash in my company. paid fewer taxes, but lower wages(i took dividends) means low cpp , low rrsps
> 3,all i have is a pool of cash and i will be forced to be an employee of my own company for income.
> I have no idea on how to go about "fixing" my mistakes. My only salvation is that I may have enough cash (gics) to achieve a no gamble retirement in a few years.


I wouldn't say that having a foundation of fixed income GIC's is a mistake. That formed our foundation and has served us well. We only diversified into equities and other later, as we became more knowledgeable and 'could afford to'.
I don't know anything about having your own company and drawing salary or dividends from it, but my impression is that it can be very advantageous from a tax perspective. Drawing from it and investing into a TSFA, etc. It may or may not make sense to diversify at this point, depending on the size of your company, income needs, appetite for risk, etc.
I'd suggest you may want to post a new thread, something like 'how to optimize income from my company', for some feedback on ways of efficiently accessing the capital built up in your company - there are a number of CMF folks that are knowledgeable.


----------



## pwm (Jan 19, 2012)

I've been retired 10 years. My income is from the standard 3 pillars:
Company pension: $24k
Non-registered Investments: $55k
Govt benefits: $17k
RIF withdrawal: $17k

Taxes are my biggest expense. $20k income tax last year.


----------

