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JC99 said:
When I had money in mutual funds they just seemed to be a vehicle for making my bank money and not me. Since I dissolved them and reinvested the cash myself (following sensible advise) the difference has been immense. Well, so far anyway.
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My parents used a mutual fund guy in the late 90s, early 2000's and my dad jokes he made the advisor more money than he ever made my dad as the guy was living in a small condo and my dad talked him into buying a newly built townhouse which of course went up hundreds of thousands of dollars in a relatively short amount of time, more than the guys condo ever would have. Nearing the end of the relationship he had the balls to request they get my brothers investments off his books as the amount was relatively small and HE wasn't making any money off it.

Looking into the future I'm going to have a very difficult time changing my mindset to withdrawing investments and spending the money on the technically "downward" part of my life as I age out. I already spend way below my means as it is. I can see the same with my parents, spending way less than their pensions pay, they have everything they need and nothing major to buy, and all the investments to take out soon. I hope they will take a couple 10-20k vacations here and there and get some enjoyment out of their hard work.
 
Mikedezo44 said:
Looking into the future I'm going to have a very difficult time changing my mindset to withdrawing investments and spending the money on the technically "downward" part of my life as I age out. I already spend way below my means as it is. I can see the same with my parents, spending way less than their pensions pay, they have everything they need and nothing major to buy, and all the investments to take out soon. I hope they will take a couple 10-20k vacations here and there and get some enjoyment out of their hard work.
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Same here.

My parents have always been frugal. It got them to a point where they have retired comfortably, but now unable to take themselves out of Save-Mode and switch to Draw-Down mode. I keep telling them to spend it while they're alive and that they are going to outlive their money, but they can't rid themselves of that scarcity mindset. They're not Baby Boomers, but tail-enders of the Silent Generation. They have the Depression Era/WWII habits of thrift and frugality.
 
Mikedezo44 said:
My parents used a mutual fund guy in the late 90s, early 2000's and my dad jokes he made the advisor more money than he ever made my dad as the guy was living in a small condo and my dad talked him into buying a newly built townhouse which of course went up hundreds of thousands of dollars in a relatively short amount of time, more than the guys condo ever would have. Nearing the end of the relationship he had the balls to request they get my brothers investments off his books as the amount was relatively small and HE wasn't making any money off it.

Looking into the future I'm going to have a very difficult time changing my mindset to withdrawing investments and spending the money on the technically "downward" part of my life as I age out. I already spend way below my means as it is. I can see the same with my parents, spending way less than their pensions pay, they have everything they need and nothing major to buy, and all the investments to take out soon. I hope they will take a couple 10-20k vacations here and there and get some enjoyment out of their hard work.
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My advice isn't for everyone but if you don't have people depending on you front end load what's left of your life.

A) You never know

B) If you end up in a hell hole squat you can out-brag your roomies.
 
Mikedezo44 said:
My parents used a mutual fund guy in the late 90s, early 2000's and my dad jokes he made the advisor more money than he ever made my dad as the guy was living in a small condo and my dad talked him into buying a newly built townhouse which of course went up hundreds of thousands of dollars in a relatively short amount of time, more than the guys condo ever would have. Nearing the end of the relationship he had the balls to request they get my brothers investments off his books as the amount was relatively small and HE wasn't making any money off it.

Looking into the future I'm going to have a very difficult time changing my mindset to withdrawing investments and spending the money on the technically "downward" part of my life as I age out. I already spend way below my means as it is. I can see the same with my parents, spending way less than their pensions pay, they have everything they need and nothing major to buy, and all the investments to take out soon. I hope they will take a couple 10-20k vacations here and there and get some enjoyment out of their hard work.
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Both of those paragraphs are very typical.

Advisor makes a guaranteed percentage of your money regardless of performance. Zero risk and guaranteed return for them is a good gig for them and crap for you. There are a few exceptions like MM's guy that justify what is paid by increasing your returns. That is fine but they are the exception by orders of magnitude from the leaches.

Most people have trouble switching from saving to consumption. Having a proper plan helps with that a lot. A plan that is stress-tested gives you the freedom to spend without worrying about tomorrow. There are also tricks that can help you spend. Having $x a month drop in your bank account similar to a salary results in more spending than letting investments ride and making a draw when you want something. As dead money builds up in your account, you find ways to spend it. Invested money (for most people) keeps growing until after you die.
 
nobbie48 said:
My advice isn't for everyone but if you don't have people depending on you front end load what's left of your life.

A) You never know

B) If you end up in a hell hole squat you can out-brag your roomies.
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I think there's a middle ground between squirreling everything away and spending it all as it comes into your hands. Sucks to not be able to afford creature comforts or adequate healthcare later in life.

For those without dependents, my advice would be to focus more on the income side rather than the spend side of the balance sheet: take on more relatively riskier investments. Not that you're gonna roll the dice and buy Stonks, but definitely more equities than RE or bonds for maximum returns. If the bottom fell out of the market (as it did a few times in my investing career), it was our own belts that needed to be tightened, not our kids. Then we just rode it out to the next cycle.

Then adjust your spend accordingly to what's coming in.

As I've gotten older, the asset allocation has definitely tilted more towards more conservative investments, paying out consistent dividends with a good history of regular increases.
 
nobbie48 said:
My advice isn't for everyone but if you don't have people depending on you front end load what's left of your life.

A) You never know

B) If you end up in a hell hole squat you can out-brag your roomies.
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Don`t be the wealthiest man in the cemetery, enjoy your life today while keeping an eye to the future. Don`t make money an obsession though. My ER nurse and Paramedic neighbor couple see "Here today, gone later today" pretty much everyday. You never know is right.
 
STARSHIP said:
As a 69 year old, I highly recommend planning your RRSP/RRIF meltdown carefully, in concert with your income streams including CCP and OAS strategy
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My parents had a CFP CPA looking after their investments as a wealth advisor. They were very clear that the money he had control of was flexible spending (like new vehicles, home repairs, etc). Dad died last fall. Mom explained that to advisor as I told her that she may want to pull more out of RRIF in 2025 as her income would go up in 2026. She said that all money was in TFSA and they were getting good returns. I saw the numbers this weekend. F me. What a moron. They pulled the minimum out of RRIF last year, new RRIF balance is higher than it was a year ago. 90% of the money is in RRIF, 10% in TFSA. RRIF earned 8%, TFSA earned 4%. F that guy. I am taking a more active role. He did everything wrong. He is maximizing his income and both minimizing the flexibility she needs and getting marginal returns. I didn't even bother digging into the details to see if he siphoned off his fee after those crappy returns or if the returns were post fee. I also had to explain to her that while there were $X under management, as most needed to be taxed, she has way less there then she thought she did. Why is the guy who is being paid to help people not explaining this to her?

By the plans I have now, I expect to pull CPP as late as possible (70 if the rules don't change). My wife is dead-set on CPP at 60 to enjoy money earlier. I have more than a decade to help her see the light. Taking CPP early reduces the expected value of the estate by hundreds of thousands. While the return over your life on money forced into CPP is abysmal (much less than inflation), return in that last decade is actually great (>8%/yr guaranteed) If I can do OK on the investment side so she doesn't feel squeezed during that decade and lean on her maternal instincts to help prop up the kids, I can probably get her on board.
 
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GreyGhost said:
My parents had a CFP CPA looking after their investments as a wealth advisor. They were very clear that the money he had control of was flexible spending (like new vehicles, home repairs, etc). Dad died last fall. Mom explained that to advisor as I told her that she may want to pull more out of RRIF in 2025 as her income would go up in 2026. She said that all money was in TFSA and they were getting good returns. I saw the numbers this weekend. F me. What a moron. They pulled the minimum out of RRIF last year, new RRIF balance is higher than it was a year ago. 90% of the money is in RRIF, 10% in TFSA. RRIF earned 8%, TFSA earned 4%. F that guy. I am taking a more active role. He did everything wrong. He is maximizing his income and both minimizing the flexibility she needs and getting marginal returns. I didn't even bother digging into the details to see if he siphoned off his fee after those crappy returns or if the returns were post fee. I also had to explain to her that while there were $X under management, as most needed to be taxed, she has way less there then she thought she did. Why is the guy who is being paid to help people not explaining this to her?

By the plans I have now, I expect to pull CPP as late as possible (70 if the rules don't change). My wife is dead-set on CPP at 60 to enjoy money earlier. I have more than a decade to help her see the light. Taking CPP early reduces the expected value of the estate by hundreds of thousands. While the return over your life on money forced into CPP is abysmal (much less than inflation), return in that last decade is actually great (>8%/yr guaranteed) If I can do OK on the investment side so she doesn't feel squeezed during that decade and lean on her maternal instincts to help prop up the kids, I can probably get her on board.
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The cpp is a debate for me I probably will be dead by early 70s if I look at family history so I might take it early.

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Scuba Steve said:
The cpp is a debate for me I probably will be dead by early 70s if I look at family history so I might take it early.

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If looked at in isolation (ie with CPP as your only source of income), breakeven is 80 something. If you include CPP in full financial plan with all sources of money, breakeven is early 70's for most people. Delaying CPP and melting down registered accounts can save you a ton of tax and CPP is guaranteed to increase forever (at higher than the official government inflation rate) which other investments cannot guarantee.
 
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GreyGhost said:
If looked at in isolation (ie with CPP as your only source of income), breakeven is 80 something. If you include CPP in full financial plan with all sources of money, breakeven is early 70's for most people. Delaying CPP and melting down registered accounts can save you a ton of tax and CPP is guaranteed to increase forever (at higher than the official government inflation rate) which other investments cannot.
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I haven't really looked at it yet but my Rrsp is fairly healthy and will be hard to be tax efficient when I withdraw from it.

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Scuba Steve said:
I haven't really looked at it yet but my Rrsp is fairly healthy and will be hard to be tax efficient when I withdraw from it.
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Similar case for me.

The tax-free snowballing effect in my RRSP is huge at this point, and if I melted that snowball by moving it into non-reg, I'm taking a double-hit with the immediate withholding tax (and then the income tax), plus annual taxes from this point moving forward that greatly blunts the compounding effect.

I know I will have to pay income tax eventually, but watching that snowball grow unimpeded by taxes every quarter is kinda hypnotic... Plus, I'm not in dire straits yet on my non-reg port. Though that remains to be seen how this will play out with the current situation in Iran...
 
GreyGhost said:
My parents had a CFP CPA looking after their investments as a wealth advisor. They were very clear that the money he had control of was flexible spending (like new vehicles, home repairs, etc). Dad died last fall. Mom explained that to advisor as I told her that she may want to pull more out of RRIF in 2025 as her income would go up in 2026. She said that all money was in TFSA and they were getting good returns. I saw the numbers this weekend. F me. What a moron. They pulled the minimum out of RRIF last year, new RRIF balance is higher than it was a year ago. 90% of the money is in RRIF, 10% in TFSA. RRIF earned 8%, TFSA earned 4%. F that guy. I am taking a more active role. He did everything wrong. He is maximizing his income and both minimizing the flexibility she needs and getting marginal returns. I didn't even bother digging into the details to see if he siphoned off his fee after those crappy returns or if the returns were post fee. I also had to explain to her that while there were $X under management, as most needed to be taxed, she has way less there then she thought she did. Why is the guy who is being paid to help people not explaining this to her?

By the plans I have now, I expect to pull CPP as late as possible (70 if the rules don't change). My wife is dead-set on CPP at 60 to enjoy money earlier. I have more than a decade to help her see the light. Taking CPP early reduces the expected value of the estate by hundreds of thousands. While the return over your life on money forced into CPP is abysmal (much less than inflation), return in that last decade is actually great (>8%/yr guaranteed) If I can do OK on the investment side so she doesn't feel squeezed during that decade and lean on her maternal instincts to help prop up the kids, I can probably get her on board.
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We both retire at the end of this year. 61 1/2 years old at that time. We will self fund retirement until 68 - 69 to get our rrsp's down before Cpp and Oas start.
This will require taking more rrsp funds out than we need and continuing to max out Tfsa's for foreseeable future.
As much as we all hate paying taxes those of little means would kill to be in a position to have taxes as a concern in retirement.
 
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AllistonGT said:
We both retire at the end of this year. 61 1/2 years old at that time. We will self fund retirement until 68 - 69 to get our rrsp's down before Cpp and Oas start.
This will require taking more rasp funds out than we need and continuing to max out Tfsa's for foreseeable future.
As much as we all hate paying taxes those of little means would kill to be in a position to have taxes as a concern in retirement.
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Depending on your heirs situation and expected estate, their TFSA's and/or RESP's can be another possible path for money. If they have the right attitude, that allows transfer of more money with less taxes. You transfer less dollars than if you invested and gave them money when you died but as they get the growth in a tax advantaged account, they end up with more post-tax dollars (and you don't have recurring tax liability issues through the years while you are holding money you don't plan on using).

Make sure you run the numbers for OAS. CPP clearly benefits most by waiting but the OAS benefit for waiting is less pronounced. It often gets started at 65. Melting down a healthy RRSP in 3.5 years is probably not possible though so your situation probably leans towards 70 as you would have OAS clawed back anyway if you started early. What a kick in the nuts that would be. Lock in the lower rate and get literally zero dollars in exchange.

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As for your last sentence, even those with small RRSP's benefit from planning. Burning RRSP prior to starting CPP could mean the difference between enough CPP to afford to live and investigating maid.

Say they have max CPP ($1500/mo) and sucked at saving so they have a $100K portfolio. Trying to play the 4% game on the RRSP would give you 1833/mo that roughly tracks inflation over time. Meltdown RRSP over five years and CPP gives you >2130/mo (that doesn't include the additional inflation amounts that would also get baked in over those five years which probably adds another $300/mo or so). When you are scraping by, an extra $500/mo is nothing to sneeze at.
 
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GreyGhost said:
Depending on your heirs situation and expected estate, their TFSA's and/or RESP's can be another possible path for money. If they have the right attitude, that allows transfer of more money with less taxes. You transfer less dollars than if you invested and gave them money when you died but as they get the growth in a tax advantaged account, they end up with more post-tax dollars (and you don't have recurring tax liability issues through the years while you are holding money you don't plan on using).

Make sure you run the numbers for OAS. CPP clearly benefits most by waiting but the OAS benefit for waiting is less pronounced. It often gets started at 65. Melting down a healthy RRSP in 3.5 years is probably not possible though so your situation probably leans towards 70 as you would have OAS clawed back anyway if you started early. What a kick in the nuts that would be. Lock in the lower rate and get literally zero dollars in exchange.

EDIT:
As for your last sentence, even those with small RRSP's benefit from tax planning. Burning RRSP prior to starting CPP could mean the difference between enough CPP to afford to live and investigating maid.
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Not concerned with OAS clawback. I hope. Self funding the first 7 - 8 years should deal with that issue. If the markets continue the way they have the last few years, who knows.
 
GreyGhost said:
Say they have max CPP ($1500/mo) and sucked at saving so they have a $100K portfolio. Trying to play the 4% game on the RRSP would give you 1833/mo that roughly tracks inflation over time. Meltdown RRSP over five years and CPP gives you >2130/mo (that doesn't include the additional inflation amounts that would also get baked in over those five years which probably adds another $300/mo or so). When you are scraping by, an extra $500/mo is nothing to sneeze at.
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It's amazing how many Canadians don't realize that if both partners receive the max CPP and one dies, the surviving partner gets nothing of the deceased CPP other than the death benefit. IMHO thats criminal.
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