When I’m sixty-four

11 thoughts on “When I’m sixty-four”

  1. Neither of us have ever worked for an employer who provided a pension plan – so this is all personal savings.

    Although for the past 5 or 6 years, Neil has had employer-sponsored RRSP savings – 3% of his salary is put into a group fund, and his employer matches it. That account makes up about 15% of our total retirement savings right now.

  2. Apparently Consumer Reports did a comparison study a while back of whether you should take any “bonus” cash and invest it into an index fund, or use it to pay down your mortgage. The index fund won.

  3. I’m curious how you have calculated how much you will have at retirement. I have money in RRSPs, pension & TSFA, but I haven’t a clue how to estimate what it will all be worth when I’m 65.
    .-= Beth´s last blog ..This is how dedicated I am =-.

  4. We’ve got a very big spreadsheet, and Neil’s an excel wizard.

    First off, we’ve assumed a rate of return of 5% per year, compounding annually.

    We’ve also assumed a rate of inflation of 2% per year, increasing our planned deposits by that amount, hopefully off-setting the constant devaluing of dollars as time goes by.

    Our $2m portfolio in 2034 would be the equivalent of 1.2m 2010 dollars – hopefully we’ve guessed wisely at what inflation will do, and the 2% averages out.

  5. I think this is an excellent plan IF you are happy with your current home. If, however, you want to upgrade your living situation, putting money into RRSPs isn’t going to help much, whereas by putting money into your mortgage, you’re avoiding that interest and essentially banking it away for a larger down payment for a future home upgrade. Of course, ideally, we’d all be able to do both!
    Also, I think it’s easy to forget that you’ll always need a roof over your head. So, I’m glad to see that your long term plan doesn’t involve selling your home. Unless the sell was for a downgrade to release some cash, I’m assuming you’d be taking on some additional rent payments where there were no payments before. Either way, it sounds like you’re in great shape. Congrats!

  6. One more thing… I just want to say that I admire your willingness to talk openly about finances. I think it’s become an unnecessarily taboo subject. I’m certain that part of the current debt problem in North America stems from people not being willing to discuss money, or even acknowledge that it needs to be properly managed. Also, it’s really useful to learn from the successes and failures of other people. Thanks 🙂

  7. Thanks 🙂 It’s actually been a great experience sharing. I’ve learned a lot by opening up the discussion, and people have been incredibly kind about the whole thing.

    As for being happy with our current home, yes – that’s a big part of why we’re going this way. We don’t have any plans to purchase anything more expensive in the next 3-4 years, which is how long it would take us under this plan to pay down our RRSP & TFSA backlog.

    Once that’s done, it’s back to making our maximum contributions each year, and redirecting anything extra back onto extra mortgage payments.

  8. Oh sure, this will all be very useful when the clima/2012/wrath-of-God-pocalypse comes and everyone’s sealed in their zombie-proof bunkers with their home-made blunderbusses and cisterns of rain water. THEN where will your Excel spreadsheet get you?!

    Actually, my financial planning has always been crappy, but having stage 4 metastatic cancer has put retirement planning surprisingly low on my priority list. So checking out your stuff about it is, for me, like reading fun stories from another world entirely.
    .-= Derek K. Miller´s last blog ..Derek the cowboy =-.

  9. Thanks Derek – glad you’re enjoying the posts anyhow 🙂

    Although I must admit, if the end-days come and I find I’ve got an outrageous bank account instead of having plied myself to exhaustion with liquor and whores, I’m gonna be pissed!

Comments are closed.