# Retirement Plan Feedback



## seton (Jun 22, 2014)

Hello,

I've been doing some long term planning for me (33) and my wife (28) and our future retirement plans. I work in a corporate job and she's a classroom teacher. We currently have no kids, but plan for 2 within the next 5 years. We live in Winnipeg. Our current retirement targets are for me to retire at 55, and her to retire at 55 (5 years after me). We are budgeting around those plans, fully expecting given our time horizon that a lot can happen between then and now.

We currently have combined retirement funds today of *$111,826*, made up of my DC Pension, and some Wealthsimple RRSPs and TFSAs. My wife has a DB Pension that on conservative estimates, her pension income at 55 would be *$25,000* in today's dollars (estimate includes losing some service for maternity leaves).

Our 2018 savings for the above funds are *$36,358* (excluding her pension), and our plan is based on maintaining this with inflation going forward. This is a fairly comfortable amount to maintain with our incomes today, and we think we can maintain this level with our plans for kids with some discipline.

Based on estimates of a 4% real return on the portfolio, I would have $1,110,312 at 55 while she would have $384,635 when she turns 55 (both in today's dollars). Our target retirement income is $80,000 gross combined, which we think will give us a fairly comfortable lifestyle. We plan to have no mortgage or significant debt by this time (fingers crossed).

I've done a few calculators (with assumptions for CPP both at age 60, but not factoring OAS given who knows if it'll exist in 20+ years) and the numbers seem to work. To seasoned veterans here, does this plan look reasonable? Do any of my assumptions appear unrealistic?


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## russell55 (Jan 26, 2016)

Not sure if this answers your question at all. But i would say there is too many variables coming up in your lives. 
I would recommend instead trying to have a % goal. Maybe have 6%-18% of your income go to retirement savings either RRSP or if its an option top up the school board or your current employers retirement plan.

Looking at hard number this early on can be misleading.

But starting a habit of say 15% income to retirement at this age and moving forward could be a life changing choice


Cheers


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## like_to_retire (Oct 9, 2016)

It's smart to plan ahead as you're obviously doing, but as russel55 points out, there are a lot of variables, the least of which is the high cost of children and university. Just keep putting away as much as you can. You're already doing that, so you have a leg up..

ltr


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## OnlyMyOpinion (Sep 1, 2013)

Seton, welcome to CMF.
Your FI should be doable based on your careers and early focus.
Aside from your specific numbers, I agree with Russell that simpler is better when it comes to sticking to a plan. 
Keep your spending under control and simply keep your TFSA's & RRSP's earmarked for retirement, and max'd out each year (if there is rem contribution room after your DC and DB pensions) - I suspect that will total a bit less than your proposed $36k/yr. 
Keep your money fully invested and diversified in low-mer broad etf's, and don't let 'dead' money sit for months at a time along the way.
If you have a home and its where you intend to stay and you still have a mortgage - pay it off as a priority just as soon as you can.
There are a number of savings/retirement calculators onlline that you may have already played with to give you a sense of variables.


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## FIRE40 (Sep 27, 2017)

Welcome to CMF, seton. 

While I understand the KISS (keep it simple, stupid) plans suggested by the others, I think you are just like me. An engineer perhaps? 

I prefer to calculate down to the dollar and meticulously plan out the years until retirement. Of course, there will be many changes along the way which will require adjustments, but that's not a reason to put a precise plan in place. Just make sure you are open to modifications and can adapt through the ever changing environment we call life.

Just to do a rough calculation - combined your plan will have you around $1.5M at retirement. If you use the SWR (safe withdrawal rate) of 4%, that gives you $60k gross. Add in the $25k pension and you are above that magic $80k number you quoted. This isn't including CPP/OAS or anything else.

Just keep plugging along and revisit this plan once a year or so to make any changes necessary and record your progress. You're off to a great start... keep it up!


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## OnlyMyOpinion (Sep 1, 2013)

FIRE40 said:


> ... Just to do a rough calculation - combined your plan will have you around $1.5M at retirement. If you use the SWR (safe withdrawal rate) of 4%, that gives you $60k gross.


I know rough works at this point in the journey, but at some point I suggest also becoming familar with the variable percentage withdrawl (VPW). Your withdrawl amount varies with your annual balance - which varies based on portfolio returns. 
With it, risk of running out due to longevity is reduced. It actually turns out to be very similar to prescribed RRIF wthdrawls. 
http://www.finiki.org/wiki/Variable_percentage_withdrawal


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