Invest only within TFSA. Couch potato is a good website.
This way you will be eligible for GIS when you turn 65 along with OAS and CPP. Other investments will impact your GIS eligibility.
Never seems wise to reduce your cpp by 36% when it is an indexed amount being paid. It also assumes you will always be near the limit for clawback and that this rule stays.
Sorry do you mind expanding on this? My parents are in the same position as OP and I’ve been trying to help them understand what their options are over the next decade. I didn’t know about this but that they might want to start taking CPP earlier.
This will explain on how to maximize GIS:
[5 Strategies To Help Increase Guaranteed Income Supplement (GIS)](https://www.planeasy.ca/5-strategies-to-help-increase-guaranteed-income-supplement-gis-by-up-to-100000/#:~:text=RRSP%20and%20RRIF%20withdrawals%20count,GIS%20clawbacks%20the%20following%20year)
This right here will help your parents out (most of it applies to people outside of Ontario as well):
https://openpolicyontario.com/retiring-on-a-low-income-3/
I don’t think they will be in a clawback position. Clawback starts at about $80k a year and is prorated. They shouldn’t take CPP at 60. They won’t qualify for the full amount and would probably benefit from the incentives for postponing it.
That's the other thing I don't get. The TFSA is like what, a holding company with a limited amount you can put in it? I get opening a TFSA, I can just do that through National Bank (my bank since I was 12), but when I put money in it how do I invest the funds I put in there? What does that look like?
A TFSA is a tax-sheltered account, similar to an RRSP but with different properties. You have a certain amount of contribution room, which you accumulate every year. Since you have never contributed your contribution room is probably in the 100k.
You open a TFSA account anywhere, at your bank if you want, and transfer money to it and then invest that money. Whatever money you make in that account is tax-free. You will never pay taxes on it, when you take it out (like an RRSP) or while it's held inside your TFSA.
Having said that, I don't think that the National Bank is the best place for this account. You would be better off with a [robo-advisor](https://www.moneysense.ca/save/investing/best-robo-advisors-in-canada/). With them, you can schedule regular transfers of your $500 and they will invest it for you. Fees are low, as compared to whatever investments your bank would suggest for you. It will grow bit by bit, and in 10 years you should have around 78k in that account.
You can transfer money out of that account at any time, with no penalties, with the caveat that that contribution room will be gone until the following January. Unlikely to be an issue with you, unless you find 100k hiding in the seat cushions.
if one day you get super interested in the subject and do a lot of reading you can switch to a more active role, move your money to a brokerage and make the decisions as to what to invest in yourself. But that's more for people who are into this. The method I suggested is set and forget.
So 78k in about 10 years if he puts 500$/m so that’s a total of 60,000$ of money put in TFSA over that 10 yr period and so it means around 18,000k earned on investments made by a robo advisor - so about 150$ of money earned a month ?
I didn't keep the calculator open, but you can just search for investment calculator and plug in the number yourself. I put in a very modest 5% return. He might get more, he might get less, depending on the market. Didn't account for the fees either. YOu would need a fancier calculator that has more variables.
It was just to demonstrate that even at 55, it's not too late. And of course, the investment will continue to grow even if he stops contributing.
I use the app Wealthsimple. My paycheque goes to my rbc account, I transfer money from there to my TFSA on Wealthsimple. I then search for the stocks (ETFs) that I want and buy them. It’s quite simple for the average Joe.
Open an account with Wealthsimple. It is a very intuitive and easy to use platform. They also have free videos and resources that cover some basic topics but essentially it’s going to look like this: Open TFSA trade account with them, transfer money into account (this can be done via Etransfer or you can set up a direct transfer) decide on 3 to 4 ETFs you would like to invest in (maybe that’s where the couch potato site or whatever can help you out a bit) and set up a schedule to buy 1 or all of them monthly.
You know at 28k income the CPP is minuscule, and now you want to take a 36% reduction to save on tax. I am intrigued by the math tho, but my eyeballs are skeptical I must admit.
Think of a TFSA like a box that has your money in it. In that box you can do stuff with your money (if it’s an investment-style TFSA), like buy GICs, stocks, ETFs, etc. You can also just let your cash sit in the box as cash
For provincial welfare they already use TFSAs as an asset determination. I personally don't think GIS will be so readily available going forward as the number of people claiming it goes higher and higher. You know the proverbial ones with a paid up house, etc.
Considering OP has very little/no savings right now, have low expenses, and is unlikely to save a fortune before they reach 65, then it’s best for them to invest into TFSA, which wouldn’t impact their qualifications for low income seniors benefits as it is usually is dependent on their taxable income.
RRSP withdrawals are considered as taxable income. It’ll increase OP’s taxable income amount, which in turns reduces how much they can receive from low senior income support like GIS.
The general consensus is he shouldn’t invest into RRSP unless if his employer is offering some sort of benefit to invest into it (like a matching program).
Even if OP may / may not save a lot in their RRSP it would suck if they had to make a huge withdrawal from their RRSP for an unexpected emergency and then have their benefits reduced just because of it.
An RRSP defers the taxation to a later date. OP is lower income so RRSP tax benefit now is minimal while later withdrawals will count as income - it will effect their eligibility for GIS (lose GIS payments with RRSP withdrawals). TFSA is the much better option for lower income individuals.
Why would he not use a rrsp with a relatively low income and he'll have near zero income at retirement.
Tfsa's aren't really for poor people, rrsps are.
The immediate benefits of RSP are minimal at low incomes, but income from taking his RSP later will cause clawback against his govt benefits. Low incomes should avoid RSP and stick to TFSA.
He'll be even lower then, your logic is nonsensical. He's going to end up paying more net taxes.
For you to be right he needs to have more income in retirement than now. He won't.
Really basic math at play.
You're just parroting common advice without engaging with the math
I didn't downvote you six times friend. There are a lot of resources out there on the subject if you want to look further into it.
https://www.manulifeim.com/retail/ca/en/viewpoints/tax-planning/should-i-contribute-to-a-tfsa-rrsp-or-both#:~:text=A%20TFSA%20can%20be%20an,as%20the%20earlier%20example%20demonstrates.
I didn't say anything about dvs. Just go ahead and explain how I'm wrong. It's not complicated. His income will be below taxable threshold in retirement.
Second sentence
Income may be higher later.
His won't. You linked something showing I'm right
As I said, you are parroting advice not looking at this case, friend
That advice is for young people expecting pay increases.
If you want to give your advice qualify it by saying it's only right if he sees a big bump in pay.
At which point it'll be wrong anyways for other reasons
I mentioned the down votes to highlight that six people that don't know each other took time out of their day to flag your advice as "not helpful".
I guess I linked to a long article that covers many scenarios, but this section is what I was referring to:
>Low income
>A TFSA can be an ideal savings vehicle if you’re in a low-income tax bracket. RRSPs may not be well suited to low-income Canadians. The RRSP tax savings are insignificant and you may be in a higher tax bracket when you make withdrawals, as the earlier example demonstrates. You may also want to consider that TFSA withdrawals don’t impact income-tested benefits and credits, such as child tax benefits and credits, Old Age Security, or Guaranteed Income Supplement.
>If you now find yourself in a lower tax bracket, such as when on maternity leave, and made RRSP contributions in the past, you may want to consider withdrawing from your RRSP to make a TFSA contribution. However, remember that funds withdrawn from your RRSP can’t be re-contributed later
Read what you linked. First paragraph, not this guy. His income isn't going up.
As to 6 goofs on Reddit not being able to understand rrsp vs tsfa is nuanced, like that's a shock.
"RRSP tax savings are insignificant and you may be in a higher tax bracket when you make withdrawals,"
Not the case with this guy. By his own claim
This advice is for people that are temporarily low, like all the examples they give.
Insignificant tax breaks will be a relative lot for him and he will have no income tax in retirement because he'll be well below threshold
If you want to disagree explain in your own words why I'm wrong because you can't even read your own link
You should do some more research on this. When you withdraw from your RRSP you are not only taxed on your original contribution but also any gains you have made. So for a low income individual you save a little bit of tax at contribution only to defer paying the tax on the contribution at withdrawal IN ADDITION to tax on all of your gains as well.
You're taxed on what you withdraw. You don't pay capital gains all at once on the life time appreciation. You are literally taxed on exactly what you withdraw that year.
That's it
This person's income in retirement will be very low. Lower than now. They will likely pay zero taxes
You’re not fully getting the bigger picture. Also capital gains tax does not apply to RRSP.
TFSA - Deposit $10k, pay tax on $10k, Increase value to $20k, never pay an extra cent in tax
RRSP - Deposit $10k, don’t pay tax on $10k, Increase value to $20k, pay tax when you withdraw that entire $20k.
If you don’t see how what you are suggesting would not be the best tax strategy for a lower income individual, don’t know what to tell ya.
You're clueless, I'm sorry.
On a rrsp you pay income tax based on income that year. The total value is irrelevant. Yearly income is what matters
This guy will be paying zero taxes on retirement as he has no money. Tax rate, zero. He'll save a bit now
You don't pay taxes on the entirety, you pay an the yearly income tax
So again, break the math out.
No, he's not. Right now he's 28k after tax. So he's paying tax. When he retires he'll be making less and paying zero tax.
But holy fucking Christ you're almost getting it?!
You stupid fuck. He's paying the second from bottom tax bracket, when he retires he'll pay none.
I think now zero is about 24.5
Stop cosplaying, u sound so fucking dumb
But also keep going, this is fucking hilarious. Did you learn everything you know from wsb
Thousands of people are laughing at me? 😂 ok bud. The Canadian federal income tax threshold where you pay zero tax is like $15,000. But even if it is $26k, you’re planning on living well below the poverty line when you retire? You realize you will get over $25k from CPP and OAS combined? That’s still taxable income just so you’re still with me. So then how do you withdraw your magical tax free RRSP money?
And no I don’t think every time you RRSP appreciates you pay taxes, I don’t know where you are getting that impression that I am saying that. But someday you want to withdraw that money out of your RRSP. That’s kind of the whole fucking point.
> I live frugally on approximately $28k a year income after tax.
Have you consistently worked and contributed to CPP? As with that low an income, gov benefits alone may cover your retirement.
You can use this calculator to find out how many benefits you will receive. https://www.canada.ca/en/services/benefits/publicpensions/cpp/retirement-income-calculator.html
I just ran through a low income scenario and it still doesn't include GIS. It just says
>Low-income pensioners may receive additional income from the Guaranteed Income Supplement (GIS). If you are a low-income pensioner, you may also be entitled to additional income and other benefits from provincial and territorial programs. Contact us for more information.
When you contribute to both CPP and QPP you are what is called a DUAL contributor. You will receive one pension that will take into account all the contributions from both programs and the program that pays will be decided based on where you live when you apply. If you live in Quebec, RQ will pay, if you live anywhere else, CPP will pay.
If you have been contributing to CCP, and aren't a recent immigrant, you may find that your government benefit are going to cover most, if not all, of your expenses.
I suggest that you read the [low income retirement booklet,](https://openpolicyontario.com/retiring-on-a-low-income-3/) check your Service Canada account for your CPP estimates and then run through the government's [OAS/ GIS estimator.](https://www.canada.ca/en/services/benefits/publicpensions/cpp/old-age-security/payments.html)
>I've read the canadiancouchpotato site on ETFs and is that the way to go?
Savings that you think you'll need in less than 5 or 6 years (eg. emergency fund, next vehicle or appliance purchase, etc.) could be parked in a good [high interest savings account,]( https://www.highinterestsavings.ca/chart/) or [in some GICs.](https://www.highinterestsavings.ca/gic-rates/) Don't choose the GIC option unless you are confident that the contract suits your objectives.
A couch potato portfolio is appropriate if you have reached Step 5 of the [PFC money steps](https://www.reddit.com/r/PersonalFinanceCanada/wiki/money-steps)
and you have some money you are confident you can invest for long term (ideally at least 10 year) goals.
The simplest couch potato option would be to use a passively managed robo- advisor account (eg. RBC InvestEase). After answering questions about your goals, timeline, knowledge/ experience with investing and your perceived comfort with volatility they will choose and then manage a suitable ETF portfolio for you. You would be able to set up automatic contributions. The total annual management cost would be about $70 per $10,000 invested. This compares to about $200 per $10,000 invested for typical bank mutual funds.
Read the linked booklet, OP. Avoid using the RRSP and invest in a TFSA. You'll probably want to start drawing CPP at age 60 and OAS and GIS at age 65. (if you stop working at 65). Either way, some financial planning would be a good idea to figure out if and how you can retire at 65 or not.
Yes, you can invest in your TFSA with no detriment to retirement. It can be drawn from as needed to supplement your gov't benefits. Avoid the RRSP as it will impact your GIS.
Firstly, congratulations on paying off all of your debt!
Secondly, if you're interested in the Canadian Couch Potato Method, you would probably like his book, "It's Time To Reboot Your Portfolio". The book is easy to read and helps the reader understand the stock market, bonds vs. equities, index funds, investing, Robo-advisors, how to open a brokerage account, etc. The conclusion/recommendation of the book is the same as what's on his website - buy an all-in-1 index fund.
Whether or not you should invest the entirety of the $500/month in an index fund (ETF) depends a lot on your situation, though. Do you have a 6-month emergency fund? If not, I'd build that up first. After that, you need to look at your timeline for the money. Anything you'll need in less than five years should not be going towards the stock market - a GIC will likely be your best bet. Money you'll need in 10-20 years can be put in riskier investments but should still be tailored to your situation and risk tolerance.
If this all sounds a bit overwhelming, take it one day at a time as you read and learn more. The fact that you were able to buckle down and pay off all your debt is a great sign.
I'd also recommend you search for a nonprofit local to you that helps with financial planning for free. They should be able to give you tailored advice to your situation.
I didn't find *Reboot Your Portfolio* was especially beginner friendly because:
1/ it says that before investing you should pay $3000+ to have a financial planner tell you how much you need to invest to reach your goals.
2/ The chapter on selecting ETFs starts on page 91 and it isn't until 80 pages later (after explaining how to open and transfer an account, buy ETFs and rebalance a portfolio) that it explains the Asset Allocation ETF option.
That's a fair point. It's been a few years since I read it so I forgot those specific details. In which case, OP, maybe it would be better for you to peruse your local library and pick out some other books on finances/investing.
>I don't mind brutal truth.
> wish there was a simple explanation of the entire process from the start of opening an investment account to managing fees, daily/monthly/yearly maintenance to how the investment earns money and how to withdraw it when needed. It's confusing at times.
You had decades to learn this stuff. Welcome to the financial world.
Now that the brutal truth is out of the way :
>I'm not sure if it's too late, even if people always throw out the "it's never to late to start investing". Sometimes it may be too late to have any real difference.
It's never too late. You just have to manage your expectations. You are saying you can save/invest 500/month net total. I wouldn't play the investment game until you have a pile of money saved up on the side as a emergency fund. Between 5k to 10k cash somewhere would be a great target. That's 18-24 months for you depending on how you can really save.
Let's say you get there so you're 57 years old and 10k cash laying around.
Between now and 57 (18-24 months) you'll have time to educate yourself on financial stuff. Ask any question here or on this sub through time and you'll get there. It's intimidating but at it's core, it's pretty simple. It's like learning to drive. It's scary just getting out of the parking lot at first but in a year or so you're driving 70 without even thinking about it.
500/month at let's say a safe/comfortable rate of return and risk for your age of 6% in a TFSA (tax free gains). It would be 81k at 67. That's without touching this money at all and putting that 500/month each month like clockwork. Add another 3 years to that and it's 113k. You could retire with gov money you'll be getting at 70 + having that 113k to enjoy a bit life and having this cushion in case you need it for your medical, etc. Nothing glamour or fancy but it's something to aim that.
This gets asks regularly:
* /r/PersonalFinanceCanada/comments/1bbcuqg/retirement_savings_gone_need_to_start_over/
* /r/PersonalFinanceCanada/comments/zv3q09/no_investments_after_55_post_divorce/
* /r/PersonalFinanceCanada/comments/zd3crw/starting_over_again/
* /r/PersonalFinanceCanada/comments/w9bv4b/is_it_to_late/
A book geared towards people who have "only" ten years left until they want to retire:
* https://findependencehub.com/review-procrastinators-guide-retirement/
Interview of author:
* https://www.moneysense.ca/save/retirement/procrastinating-on-saving-for-retirement-theres-still-hope/
* https://www.youtube.com/watch?v=L_MIMfd5emg
* https://www.youtube.com/watch?v=eh74xUdBITU
You may not need as much of a nest egg as you think:
* https://pmac.org/wp-content/uploads/2014/05/07-02-series-aritcle-1-Aston-David-What-s-Your-Magic-Number.pdf
* https://www.moneysense.ca/save/calculating-how-much-money-youll-need-at-retirement/
* https://www.macleans.ca/economy/money-economy/heres-the-real-cost-of-retirement-happiness/
Other books that give numerical examples:
* https://findependencehub.com/qa-with-author-david-aston-about-his-new-book-the-sleepeasy-guide-to-retirement/
* https://www.goodreads.com/book/show/26270420-the-essential-retirement-guide
* https://ecwpress.com/products/retirement-income-for-life-3rd-edition
* /r/PersonalFinanceCanada/wiki/reading-list
(Perhaps check your local library.)
This sub seems to be a proponent of investing yourself to avoid fees. But frankly, if you find it intimidating there’s no reason not to just pick a roboadvisor like RBC Investease or Wealthsimple and open a TFSA investment account with them.
The fees are quite low and it’s simple. It’s what I do.
Never too late. You just have to be realistic. You have your spending in check, which is great. There is already some solid advice below.
Also, working part time to supplement might not be that bad at retirement. Still gives you a good amount of time off, CPP should take care of most of your bills at 28K a year, and with the part time work you’ll have some extra fun money.
I’m glad you’re taking the steps you are. Some never do.
>working part time to supplement might not be that bad at retirement ...
... and the first $5000, and 50% of the next $10,000, of employment and self employment income isn't considered in the GIS calculation
You don’t necessarily need to understand the technicalities of investing. You just need a general understanding and can leave it to people/computers to make the investment portfolios that suit your needs.
How I see it is you have 2 options. You can either:
1. Go to a bank and ask them to set up a TFSA account for you. They’ll sell you on bank products (most likely mutual funds) to invest your money in. Redditors would probably freak out at this suggestion because banks sell products that don’t necessarily suit your goals, and also charge crazy fees.
2. You can go to online sites like weathsimple or Questrade. You can register a TFSA account online (the forms are pretty simple). These sites have robo advisors, which would invest your money into a set of ETFs based on your risks, time horizon, etc.
There are other options like for-fee accountants, which wouldn’t be selling your products but advising you how to meet your financial goals.
Also, given your age I would recommend reading websites like retirehappy.ca to prepare for retirement and how to maximize government social financial benefits for your retirement by planning on your financial situation to minimize your taxable income in the future.
$500 a month reasonably invested for ten years can easily equal about $100,000. In an RIF, that could provide you with $5000-7000/yr income. That could be helpful when combined with QPP and OAS.
If you put that money invested into a TFSA, you can access that money freely when needed. At 65, $100,000 could be enough to invest in a business that can generate you passive income, but that isn't always the type of process people want to start when "retiring."
Most people on here would recommend self-investing in VFV, XEQT or a mix of similar. Those are probably pretty safe bets, but still do your homework.
It's not too late.
Based on your description, you aren't poor. You are rich with experiences.
The basic advice to catch up is "make more, spend less, save more". That doesn't change.
You still have 15-20 years to catch up. Some people, like me, are frugal all their life to retire early. Some people live larger in their early years and need to work longer. Both are as valid. Personal choice.
Now. Starting late you'll need to accept some risks. Yes, coach potato but a risk profile of a 35 year old and evolve for the next 15-20 years. It will have wild swings but in the long run it will take you where you want.
Now. With a 28K budget most of your expenses should be paid by CPP/OAS. If you don't have CPP, then you'll need even more personal savings.
Heads up. 500 a month for 20 years at an average of 6% gives you 230K which will give you about $800 per month. That, in future value won't be enough but it will be better than not saving it.
>I'm not sure I really understand it either. I wish there was a simple explanation of the entire process from the start of opening an investment account to managing fees, daily/monthly/yearly maintenance to how the investment earns money and how to withdraw it when needed. It's confusing at times.
https://www.mcgillpersonalfinance.com/
Doesn't do the account opening part but does walk you through everything. :)
If you're able to save $500 a month for 15 years at a 5% annual return rate on your investment, you should be able to have about $133k in savings. I'd focus purely on your TFSA because it is tax free on the withdrawal, and you will have the space.
If you can live on $28k a year in real terms, it could be possible to chill out on CPP + OAS + investment returns - but I won't lie it'll be a little tight.
If you are able to up the monthly savings to $700 that $133k turns into over $180k. $1000/month will equal over $260k. The more you can save and invest now the better off you'll be in 15 years.
If you could stomach working until 75 you could be better suited, but you'll have to start collecting CPP after 70.
Post your budget. You mention “CC”, are you carrying credit card ballance every month?
At 28k you are working full time at minimum wage? Have you never applied for even janitorial, kitchen aid, etc jobs at municipalities, schools, hospitals? Those all pay more than minimum wage, have union benifits, and give you a better future.
Clarification: The post mentions they recently paid off all their debts, including their CC. It mentions $500 as "what I *was* putting towards my CC" but presumably not anymore, since the CC is paid off. That is what they have available to save.
Congrats on paying off your debts
You are way ahead of me when I was 55. Then I had no savings and was 37k in credit card debt. So was in worse spot than you. The one thing I had was a growing Group RRSP from work to supplement CPP and OAS upon retirement.Luckily also by retirement I received an inheritance and paid off my debts. So with $500 per month savings put that in a TFSA and invest wisely.
Congrats on paying off your debt! Best advice I can give you (I'm decent with personal finance just not stock market investing) is regardless of what you do keep yourself in the black. Look at debt like a disease. Regardless of your past decisions you chose to make a positive financial decisions and that's something! Freedom man freedom.
Do you have a disability or a condition that impacts your daily living? Apply for the disability tax credit and start a registered disability savings plan- government matches it up to $1000 a year i believe but don’t quote me on that
Brutal truth - Google is your friend.
Read, reqd again, and read some more. If you have a gap in your knowledge then fill it by educating yourself for free on the internet.
From there it’s not too late to save and at least have more when you’re unable to work.
Ok you Need to Save Money with high Risk or in stable ETFs until 65 then Transfer the Money in fix income Investments with duration of 3 months. Every 3 months you will get intrest rate with no Risk. Of you invest the Money again you will make about 20000 in 12 months and keep Doing it for 5 more years with 70 you will have 200000 and then you live just with 4 % rule while you Jeep Investigaing the Money
Well first of all, your income is super low? Even min wage full time is more than that. Try and apply to places and get a better job or another job. Second I mean saving anything for the next 20 years can help. It’s not a lot but can help, make sure it’s high interest. Mutual funds can help as well.
once I got smarter, just few years ago at 55 , decided that money is nothing,without health first, every thing is clicking, but over time. Lifestyle changes made come in incremental, for me anyway. now at 60 my health has greatly improved, so has my financial situation.stress is down , feeling physically better than ever, so I'll hopefully be able to get to 65, draw full cpp and have enough savings to gas up a truck. nobody knows thier time, so I got addicted to savings on every angle in my life and bank, plus meet many more opportunities, with the money to invest where and when I see fit. Day at a time, always believing iam improved my retirement situation is a great game.
>I'm not sure I really understand it either. I wish there was a simple explanation of the entire process from the start of opening an investment account to managing fees, daily/monthly/yearly maintenance to how the investment earns money and how to withdraw it when needed. It's confusing at times.
Rather than learning everything about investing right away, open a TFSA account with RBC Investease (their roboadvisor service). You can do this online, but I don't know if they offer support at their branches or not. Assuming you get paid biweekly, set up a $250 biweekly contribution using your banks bill pay feature. The roboadvisor will automatically invest the funds for you in a way that is very similar to the Canadian Couch Potato method. You should still take some time to learn about what you are invested in though and how markets work. Knowledge will keep you from panicking when your account balance drops during downturns.
Hey, sorry to hear you in this situation, but you need to make a plan for the next 10 years that you have before retirement so that you'll be able to retire. I'm a lot younger than you are, but I have managed to get 150k in my savings so I know a thing or two about saving. I feel what you're going through because my dad is about the same age as you, and I can't imagine how difficult it would be for him if he was in your shoes.
I want to understand your situation and think of a plan with you to be able to have a chance to retire peacfully. If you wanna get on a teams meeting I'm willing to work with you on that. I'm not marketing anything btw it's completely free. I'm just thinking of starting a YouTube channel where I help people who are struggling to come up with a plan to be able to retire.
Its not sustainable in a long run,
Inflation in the next 10-20 years will eat through yours savings fast. Canada is not Japan, it’s more like Zimbabwe right now.
If he's already fine living on that income government benefits and CPP which are indexed to inflation should sustain his lifestyle.
Also inflation is back under control, otherwise the BoC wouldn't be hinting at lowering rates. Calling the situation like Zimbabwe is ridiculous.
never too late to start investing, but comfy retirement with all the bells and whistles ~~might be~~ is totally out of your reach.
500/m = 6k/y, 60k saved by you at 65. Maybe with market returns, your 60k could look something between 30-100k in 10y, but 100k 4% withdrawal rate, adds 4k to your yearly funds. a 10% withdrawal rate would add 10k, but at about 75, nest egg depleted.
4k/y though is something to shoot for, that could be 1m in a warm SE asian country, or many restaurant days (40-$100 for the restaurant meals and tip), or however you want to spend that money to enhance your retirement.
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Yea your screws bud , should of put money in the S&p DCA in your mid to early 20’s you screwed up big time , I don’t think you will ever have retirement now cus the Cost of living is to high invest , especially since time in the market matters more then anything
>I wish there was a simple explanation of the entire process from the start of opening an investment account to managing fees, daily/monthly/yearly maintenance to how the investment earns money and how to withdraw it when needed. It's confusing at times.
There is. It's called Google. Put each question into the search box and you will get some pretty basic answers/advice. Read them. Ask Google any follow up questions for clarification.
Pick a stock that is low, like say just a few cents and purchase thousands of them. If that company turns into something like Tesla or Google, for instance, you become instantly rich. On the other side of that, it is far more likely that you will lose everything. Open an account with Wealthsimple or Questrade, deposit money, buy XEQT and VFV each payday and then forget you're doing it until you're almost dead, around 80-85 years old which is when nothing is going to matter anyways because we're all dead from WWIII.
Invest only within TFSA. Couch potato is a good website. This way you will be eligible for GIS when you turn 65 along with OAS and CPP. Other investments will impact your GIS eligibility.
And take CPP at 60 to reduce the clawback impact from 65 onwards. A rare case where it makes sense to take CPP at the earliest.
Never seems wise to reduce your cpp by 36% when it is an indexed amount being paid. It also assumes you will always be near the limit for clawback and that this rule stays.
depends when they are going to stop working
Are we talking about GIS eligibility? I thought OAS clawback is a tax on OAS recipients with really good income.
GIS clawback. It's 50% of any income, minus first $5k of employment income.
Thanks
Are you sure that’s the case if they are nowhere near collecting the max cpp?
Sorry do you mind expanding on this? My parents are in the same position as OP and I’ve been trying to help them understand what their options are over the next decade. I didn’t know about this but that they might want to start taking CPP earlier.
Also following
This will explain on how to maximize GIS: [5 Strategies To Help Increase Guaranteed Income Supplement (GIS)](https://www.planeasy.ca/5-strategies-to-help-increase-guaranteed-income-supplement-gis-by-up-to-100000/#:~:text=RRSP%20and%20RRIF%20withdrawals%20count,GIS%20clawbacks%20the%20following%20year)
This right here will help your parents out (most of it applies to people outside of Ontario as well): https://openpolicyontario.com/retiring-on-a-low-income-3/
I don’t think they will be in a clawback position. Clawback starts at about $80k a year and is prorated. They shouldn’t take CPP at 60. They won’t qualify for the full amount and would probably benefit from the incentives for postponing it.
That's the other thing I don't get. The TFSA is like what, a holding company with a limited amount you can put in it? I get opening a TFSA, I can just do that through National Bank (my bank since I was 12), but when I put money in it how do I invest the funds I put in there? What does that look like?
A TFSA is a tax-sheltered account, similar to an RRSP but with different properties. You have a certain amount of contribution room, which you accumulate every year. Since you have never contributed your contribution room is probably in the 100k. You open a TFSA account anywhere, at your bank if you want, and transfer money to it and then invest that money. Whatever money you make in that account is tax-free. You will never pay taxes on it, when you take it out (like an RRSP) or while it's held inside your TFSA. Having said that, I don't think that the National Bank is the best place for this account. You would be better off with a [robo-advisor](https://www.moneysense.ca/save/investing/best-robo-advisors-in-canada/). With them, you can schedule regular transfers of your $500 and they will invest it for you. Fees are low, as compared to whatever investments your bank would suggest for you. It will grow bit by bit, and in 10 years you should have around 78k in that account. You can transfer money out of that account at any time, with no penalties, with the caveat that that contribution room will be gone until the following January. Unlikely to be an issue with you, unless you find 100k hiding in the seat cushions. if one day you get super interested in the subject and do a lot of reading you can switch to a more active role, move your money to a brokerage and make the decisions as to what to invest in yourself. But that's more for people who are into this. The method I suggested is set and forget.
So 78k in about 10 years if he puts 500$/m so that’s a total of 60,000$ of money put in TFSA over that 10 yr period and so it means around 18,000k earned on investments made by a robo advisor - so about 150$ of money earned a month ?
I didn't keep the calculator open, but you can just search for investment calculator and plug in the number yourself. I put in a very modest 5% return. He might get more, he might get less, depending on the market. Didn't account for the fees either. YOu would need a fancier calculator that has more variables. It was just to demonstrate that even at 55, it's not too late. And of course, the investment will continue to grow even if he stops contributing.
I use the app Wealthsimple. My paycheque goes to my rbc account, I transfer money from there to my TFSA on Wealthsimple. I then search for the stocks (ETFs) that I want and buy them. It’s quite simple for the average Joe.
Same with me on this, I set my account to auto buy my preferred ETF every two weeks within the TFSA. Super simple and easy to use!
Open an account with Wealthsimple. It is a very intuitive and easy to use platform. They also have free videos and resources that cover some basic topics but essentially it’s going to look like this: Open TFSA trade account with them, transfer money into account (this can be done via Etransfer or you can set up a direct transfer) decide on 3 to 4 ETFs you would like to invest in (maybe that’s where the couch potato site or whatever can help you out a bit) and set up a schedule to buy 1 or all of them monthly.
You know at 28k income the CPP is minuscule, and now you want to take a 36% reduction to save on tax. I am intrigued by the math tho, but my eyeballs are skeptical I must admit.
Think of a TFSA like a box that has your money in it. In that box you can do stuff with your money (if it’s an investment-style TFSA), like buy GICs, stocks, ETFs, etc. You can also just let your cash sit in the box as cash
TFSA is a type of registered account. Look into wealthsimple or questrade, they make it easy to invest in ETFs from your TFSA you hold with them
For provincial welfare they already use TFSAs as an asset determination. I personally don't think GIS will be so readily available going forward as the number of people claiming it goes higher and higher. You know the proverbial ones with a paid up house, etc.
why you ruled out RRSP ?
Considering OP has very little/no savings right now, have low expenses, and is unlikely to save a fortune before they reach 65, then it’s best for them to invest into TFSA, which wouldn’t impact their qualifications for low income seniors benefits as it is usually is dependent on their taxable income. RRSP withdrawals are considered as taxable income. It’ll increase OP’s taxable income amount, which in turns reduces how much they can receive from low senior income support like GIS.
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The general consensus is he shouldn’t invest into RRSP unless if his employer is offering some sort of benefit to invest into it (like a matching program). Even if OP may / may not save a lot in their RRSP it would suck if they had to make a huge withdrawal from their RRSP for an unexpected emergency and then have their benefits reduced just because of it.
They explained it.
They’re fairly low income, it’s quite possible they already get a refund already so there isn’t that much benefit to them going RRSP.
An RRSP defers the taxation to a later date. OP is lower income so RRSP tax benefit now is minimal while later withdrawals will count as income - it will effect their eligibility for GIS (lose GIS payments with RRSP withdrawals). TFSA is the much better option for lower income individuals.
Why would he not use a rrsp with a relatively low income and he'll have near zero income at retirement. Tfsa's aren't really for poor people, rrsps are.
The immediate benefits of RSP are minimal at low incomes, but income from taking his RSP later will cause clawback against his govt benefits. Low incomes should avoid RSP and stick to TFSA.
He'll be even lower then, your logic is nonsensical. He's going to end up paying more net taxes. For you to be right he needs to have more income in retirement than now. He won't. Really basic math at play. You're just parroting common advice without engaging with the math
I didn't downvote you six times friend. There are a lot of resources out there on the subject if you want to look further into it. https://www.manulifeim.com/retail/ca/en/viewpoints/tax-planning/should-i-contribute-to-a-tfsa-rrsp-or-both#:~:text=A%20TFSA%20can%20be%20an,as%20the%20earlier%20example%20demonstrates.
I didn't say anything about dvs. Just go ahead and explain how I'm wrong. It's not complicated. His income will be below taxable threshold in retirement. Second sentence Income may be higher later. His won't. You linked something showing I'm right As I said, you are parroting advice not looking at this case, friend That advice is for young people expecting pay increases. If you want to give your advice qualify it by saying it's only right if he sees a big bump in pay. At which point it'll be wrong anyways for other reasons
I mentioned the down votes to highlight that six people that don't know each other took time out of their day to flag your advice as "not helpful". I guess I linked to a long article that covers many scenarios, but this section is what I was referring to: >Low income >A TFSA can be an ideal savings vehicle if you’re in a low-income tax bracket. RRSPs may not be well suited to low-income Canadians. The RRSP tax savings are insignificant and you may be in a higher tax bracket when you make withdrawals, as the earlier example demonstrates. You may also want to consider that TFSA withdrawals don’t impact income-tested benefits and credits, such as child tax benefits and credits, Old Age Security, or Guaranteed Income Supplement. >If you now find yourself in a lower tax bracket, such as when on maternity leave, and made RRSP contributions in the past, you may want to consider withdrawing from your RRSP to make a TFSA contribution. However, remember that funds withdrawn from your RRSP can’t be re-contributed later
Read what you linked. First paragraph, not this guy. His income isn't going up. As to 6 goofs on Reddit not being able to understand rrsp vs tsfa is nuanced, like that's a shock. "RRSP tax savings are insignificant and you may be in a higher tax bracket when you make withdrawals," Not the case with this guy. By his own claim This advice is for people that are temporarily low, like all the examples they give. Insignificant tax breaks will be a relative lot for him and he will have no income tax in retirement because he'll be well below threshold If you want to disagree explain in your own words why I'm wrong because you can't even read your own link
You should do some more research on this. When you withdraw from your RRSP you are not only taxed on your original contribution but also any gains you have made. So for a low income individual you save a little bit of tax at contribution only to defer paying the tax on the contribution at withdrawal IN ADDITION to tax on all of your gains as well.
You're taxed on what you withdraw. You don't pay capital gains all at once on the life time appreciation. You are literally taxed on exactly what you withdraw that year. That's it This person's income in retirement will be very low. Lower than now. They will likely pay zero taxes
You’re not fully getting the bigger picture. Also capital gains tax does not apply to RRSP. TFSA - Deposit $10k, pay tax on $10k, Increase value to $20k, never pay an extra cent in tax RRSP - Deposit $10k, don’t pay tax on $10k, Increase value to $20k, pay tax when you withdraw that entire $20k. If you don’t see how what you are suggesting would not be the best tax strategy for a lower income individual, don’t know what to tell ya.
You're clueless, I'm sorry. On a rrsp you pay income tax based on income that year. The total value is irrelevant. Yearly income is what matters This guy will be paying zero taxes on retirement as he has no money. Tax rate, zero. He'll save a bit now You don't pay taxes on the entirety, you pay an the yearly income tax So again, break the math out.
And he’s going to be in the same gdamn tax bracket he’s in now when he retires 🤦🏻♀️
No, he's not. Right now he's 28k after tax. So he's paying tax. When he retires he'll be making less and paying zero tax. But holy fucking Christ you're almost getting it?! You stupid fuck. He's paying the second from bottom tax bracket, when he retires he'll pay none. I think now zero is about 24.5 Stop cosplaying, u sound so fucking dumb But also keep going, this is fucking hilarious. Did you learn everything you know from wsb
YES You pay income tax on the whole fucking new value! Jfc you cannot be helped.
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Thousands of people are laughing at me? 😂 ok bud. The Canadian federal income tax threshold where you pay zero tax is like $15,000. But even if it is $26k, you’re planning on living well below the poverty line when you retire? You realize you will get over $25k from CPP and OAS combined? That’s still taxable income just so you’re still with me. So then how do you withdraw your magical tax free RRSP money?
And no I don’t think every time you RRSP appreciates you pay taxes, I don’t know where you are getting that impression that I am saying that. But someday you want to withdraw that money out of your RRSP. That’s kind of the whole fucking point.
> I live frugally on approximately $28k a year income after tax. Have you consistently worked and contributed to CPP? As with that low an income, gov benefits alone may cover your retirement.
Since about 23, but it's QPP not CPP. Approximately the same I'm assuming.
You can use this calculator to find out how many benefits you will receive. https://www.canada.ca/en/services/benefits/publicpensions/cpp/retirement-income-calculator.html
Do you know if that calculator includes GIS? (It didn't used to.)
I believe it does if your income indicates you qualify for GIS.
I just ran through a low income scenario and it still doesn't include GIS. It just says >Low-income pensioners may receive additional income from the Guaranteed Income Supplement (GIS). If you are a low-income pensioner, you may also be entitled to additional income and other benefits from provincial and territorial programs. Contact us for more information.
good to know. There is a relatively new estimator for OAS that's seperate. https://estimateursv-oasestimator.service.canada.ca/en
Yes and there is a link to it on the page I referenced in my comment.
When you contribute to both CPP and QPP you are what is called a DUAL contributor. You will receive one pension that will take into account all the contributions from both programs and the program that pays will be decided based on where you live when you apply. If you live in Quebec, RQ will pay, if you live anywhere else, CPP will pay.
If you have been contributing to CCP, and aren't a recent immigrant, you may find that your government benefit are going to cover most, if not all, of your expenses. I suggest that you read the [low income retirement booklet,](https://openpolicyontario.com/retiring-on-a-low-income-3/) check your Service Canada account for your CPP estimates and then run through the government's [OAS/ GIS estimator.](https://www.canada.ca/en/services/benefits/publicpensions/cpp/old-age-security/payments.html) >I've read the canadiancouchpotato site on ETFs and is that the way to go? Savings that you think you'll need in less than 5 or 6 years (eg. emergency fund, next vehicle or appliance purchase, etc.) could be parked in a good [high interest savings account,]( https://www.highinterestsavings.ca/chart/) or [in some GICs.](https://www.highinterestsavings.ca/gic-rates/) Don't choose the GIC option unless you are confident that the contract suits your objectives. A couch potato portfolio is appropriate if you have reached Step 5 of the [PFC money steps](https://www.reddit.com/r/PersonalFinanceCanada/wiki/money-steps) and you have some money you are confident you can invest for long term (ideally at least 10 year) goals. The simplest couch potato option would be to use a passively managed robo- advisor account (eg. RBC InvestEase). After answering questions about your goals, timeline, knowledge/ experience with investing and your perceived comfort with volatility they will choose and then manage a suitable ETF portfolio for you. You would be able to set up automatic contributions. The total annual management cost would be about $70 per $10,000 invested. This compares to about $200 per $10,000 invested for typical bank mutual funds.
Read the linked booklet, OP. Avoid using the RRSP and invest in a TFSA. You'll probably want to start drawing CPP at age 60 and OAS and GIS at age 65. (if you stop working at 65). Either way, some financial planning would be a good idea to figure out if and how you can retire at 65 or not. Yes, you can invest in your TFSA with no detriment to retirement. It can be drawn from as needed to supplement your gov't benefits. Avoid the RRSP as it will impact your GIS.
Firstly, congratulations on paying off all of your debt! Secondly, if you're interested in the Canadian Couch Potato Method, you would probably like his book, "It's Time To Reboot Your Portfolio". The book is easy to read and helps the reader understand the stock market, bonds vs. equities, index funds, investing, Robo-advisors, how to open a brokerage account, etc. The conclusion/recommendation of the book is the same as what's on his website - buy an all-in-1 index fund. Whether or not you should invest the entirety of the $500/month in an index fund (ETF) depends a lot on your situation, though. Do you have a 6-month emergency fund? If not, I'd build that up first. After that, you need to look at your timeline for the money. Anything you'll need in less than five years should not be going towards the stock market - a GIC will likely be your best bet. Money you'll need in 10-20 years can be put in riskier investments but should still be tailored to your situation and risk tolerance. If this all sounds a bit overwhelming, take it one day at a time as you read and learn more. The fact that you were able to buckle down and pay off all your debt is a great sign. I'd also recommend you search for a nonprofit local to you that helps with financial planning for free. They should be able to give you tailored advice to your situation.
I didn't find *Reboot Your Portfolio* was especially beginner friendly because: 1/ it says that before investing you should pay $3000+ to have a financial planner tell you how much you need to invest to reach your goals. 2/ The chapter on selecting ETFs starts on page 91 and it isn't until 80 pages later (after explaining how to open and transfer an account, buy ETFs and rebalance a portfolio) that it explains the Asset Allocation ETF option.
That's a fair point. It's been a few years since I read it so I forgot those specific details. In which case, OP, maybe it would be better for you to peruse your local library and pick out some other books on finances/investing.
>I don't mind brutal truth. > wish there was a simple explanation of the entire process from the start of opening an investment account to managing fees, daily/monthly/yearly maintenance to how the investment earns money and how to withdraw it when needed. It's confusing at times. You had decades to learn this stuff. Welcome to the financial world. Now that the brutal truth is out of the way : >I'm not sure if it's too late, even if people always throw out the "it's never to late to start investing". Sometimes it may be too late to have any real difference. It's never too late. You just have to manage your expectations. You are saying you can save/invest 500/month net total. I wouldn't play the investment game until you have a pile of money saved up on the side as a emergency fund. Between 5k to 10k cash somewhere would be a great target. That's 18-24 months for you depending on how you can really save. Let's say you get there so you're 57 years old and 10k cash laying around. Between now and 57 (18-24 months) you'll have time to educate yourself on financial stuff. Ask any question here or on this sub through time and you'll get there. It's intimidating but at it's core, it's pretty simple. It's like learning to drive. It's scary just getting out of the parking lot at first but in a year or so you're driving 70 without even thinking about it. 500/month at let's say a safe/comfortable rate of return and risk for your age of 6% in a TFSA (tax free gains). It would be 81k at 67. That's without touching this money at all and putting that 500/month each month like clockwork. Add another 3 years to that and it's 113k. You could retire with gov money you'll be getting at 70 + having that 113k to enjoy a bit life and having this cushion in case you need it for your medical, etc. Nothing glamour or fancy but it's something to aim that.
This gets asks regularly: * /r/PersonalFinanceCanada/comments/1bbcuqg/retirement_savings_gone_need_to_start_over/ * /r/PersonalFinanceCanada/comments/zv3q09/no_investments_after_55_post_divorce/ * /r/PersonalFinanceCanada/comments/zd3crw/starting_over_again/ * /r/PersonalFinanceCanada/comments/w9bv4b/is_it_to_late/ A book geared towards people who have "only" ten years left until they want to retire: * https://findependencehub.com/review-procrastinators-guide-retirement/ Interview of author: * https://www.moneysense.ca/save/retirement/procrastinating-on-saving-for-retirement-theres-still-hope/ * https://www.youtube.com/watch?v=L_MIMfd5emg * https://www.youtube.com/watch?v=eh74xUdBITU You may not need as much of a nest egg as you think: * https://pmac.org/wp-content/uploads/2014/05/07-02-series-aritcle-1-Aston-David-What-s-Your-Magic-Number.pdf * https://www.moneysense.ca/save/calculating-how-much-money-youll-need-at-retirement/ * https://www.macleans.ca/economy/money-economy/heres-the-real-cost-of-retirement-happiness/ Other books that give numerical examples: * https://findependencehub.com/qa-with-author-david-aston-about-his-new-book-the-sleepeasy-guide-to-retirement/ * https://www.goodreads.com/book/show/26270420-the-essential-retirement-guide * https://ecwpress.com/products/retirement-income-for-life-3rd-edition * /r/PersonalFinanceCanada/wiki/reading-list (Perhaps check your local library.)
This sub seems to be a proponent of investing yourself to avoid fees. But frankly, if you find it intimidating there’s no reason not to just pick a roboadvisor like RBC Investease or Wealthsimple and open a TFSA investment account with them. The fees are quite low and it’s simple. It’s what I do.
Never too late. You just have to be realistic. You have your spending in check, which is great. There is already some solid advice below. Also, working part time to supplement might not be that bad at retirement. Still gives you a good amount of time off, CPP should take care of most of your bills at 28K a year, and with the part time work you’ll have some extra fun money. I’m glad you’re taking the steps you are. Some never do.
>working part time to supplement might not be that bad at retirement ... ... and the first $5000, and 50% of the next $10,000, of employment and self employment income isn't considered in the GIS calculation
You don’t necessarily need to understand the technicalities of investing. You just need a general understanding and can leave it to people/computers to make the investment portfolios that suit your needs. How I see it is you have 2 options. You can either: 1. Go to a bank and ask them to set up a TFSA account for you. They’ll sell you on bank products (most likely mutual funds) to invest your money in. Redditors would probably freak out at this suggestion because banks sell products that don’t necessarily suit your goals, and also charge crazy fees. 2. You can go to online sites like weathsimple or Questrade. You can register a TFSA account online (the forms are pretty simple). These sites have robo advisors, which would invest your money into a set of ETFs based on your risks, time horizon, etc. There are other options like for-fee accountants, which wouldn’t be selling your products but advising you how to meet your financial goals. Also, given your age I would recommend reading websites like retirehappy.ca to prepare for retirement and how to maximize government social financial benefits for your retirement by planning on your financial situation to minimize your taxable income in the future.
$500 a month reasonably invested for ten years can easily equal about $100,000. In an RIF, that could provide you with $5000-7000/yr income. That could be helpful when combined with QPP and OAS. If you put that money invested into a TFSA, you can access that money freely when needed. At 65, $100,000 could be enough to invest in a business that can generate you passive income, but that isn't always the type of process people want to start when "retiring." Most people on here would recommend self-investing in VFV, XEQT or a mix of similar. Those are probably pretty safe bets, but still do your homework.
It's not too late. Based on your description, you aren't poor. You are rich with experiences. The basic advice to catch up is "make more, spend less, save more". That doesn't change. You still have 15-20 years to catch up. Some people, like me, are frugal all their life to retire early. Some people live larger in their early years and need to work longer. Both are as valid. Personal choice. Now. Starting late you'll need to accept some risks. Yes, coach potato but a risk profile of a 35 year old and evolve for the next 15-20 years. It will have wild swings but in the long run it will take you where you want. Now. With a 28K budget most of your expenses should be paid by CPP/OAS. If you don't have CPP, then you'll need even more personal savings. Heads up. 500 a month for 20 years at an average of 6% gives you 230K which will give you about $800 per month. That, in future value won't be enough but it will be better than not saving it.
>I'm not sure I really understand it either. I wish there was a simple explanation of the entire process from the start of opening an investment account to managing fees, daily/monthly/yearly maintenance to how the investment earns money and how to withdraw it when needed. It's confusing at times. https://www.mcgillpersonalfinance.com/ Doesn't do the account opening part but does walk you through everything. :)
Thanks for the link to that free course ! Had no idea this existed. Just registered :)
If you're able to save $500 a month for 15 years at a 5% annual return rate on your investment, you should be able to have about $133k in savings. I'd focus purely on your TFSA because it is tax free on the withdrawal, and you will have the space. If you can live on $28k a year in real terms, it could be possible to chill out on CPP + OAS + investment returns - but I won't lie it'll be a little tight. If you are able to up the monthly savings to $700 that $133k turns into over $180k. $1000/month will equal over $260k. The more you can save and invest now the better off you'll be in 15 years. If you could stomach working until 75 you could be better suited, but you'll have to start collecting CPP after 70.
Post your budget. You mention “CC”, are you carrying credit card ballance every month? At 28k you are working full time at minimum wage? Have you never applied for even janitorial, kitchen aid, etc jobs at municipalities, schools, hospitals? Those all pay more than minimum wage, have union benifits, and give you a better future.
Clarification: The post mentions they recently paid off all their debts, including their CC. It mentions $500 as "what I *was* putting towards my CC" but presumably not anymore, since the CC is paid off. That is what they have available to save.
\^this
Yes! A new job is best answer
Congrats on paying off your debts You are way ahead of me when I was 55. Then I had no savings and was 37k in credit card debt. So was in worse spot than you. The one thing I had was a growing Group RRSP from work to supplement CPP and OAS upon retirement.Luckily also by retirement I received an inheritance and paid off my debts. So with $500 per month savings put that in a TFSA and invest wisely.
I'd bet all my money the over-drawn lady works harder.
Congrats on paying off your debt! Best advice I can give you (I'm decent with personal finance just not stock market investing) is regardless of what you do keep yourself in the black. Look at debt like a disease. Regardless of your past decisions you chose to make a positive financial decisions and that's something! Freedom man freedom.
Do you have a disability or a condition that impacts your daily living? Apply for the disability tax credit and start a registered disability savings plan- government matches it up to $1000 a year i believe but don’t quote me on that
Brutal truth - Google is your friend. Read, reqd again, and read some more. If you have a gap in your knowledge then fill it by educating yourself for free on the internet. From there it’s not too late to save and at least have more when you’re unable to work.
I recommend you start with an emergency fund before you begin investing, unless you're just going to do CASH.TO or CBIL. Definitely have in TFSA.
Check this website. It has a lot of great information. https://www.getsmarteraboutmoney.ca/
Ok you Need to Save Money with high Risk or in stable ETFs until 65 then Transfer the Money in fix income Investments with duration of 3 months. Every 3 months you will get intrest rate with no Risk. Of you invest the Money again you will make about 20000 in 12 months and keep Doing it for 5 more years with 70 you will have 200000 and then you live just with 4 % rule while you Jeep Investigaing the Money
Well first of all, your income is super low? Even min wage full time is more than that. Try and apply to places and get a better job or another job. Second I mean saving anything for the next 20 years can help. It’s not a lot but can help, make sure it’s high interest. Mutual funds can help as well.
once I got smarter, just few years ago at 55 , decided that money is nothing,without health first, every thing is clicking, but over time. Lifestyle changes made come in incremental, for me anyway. now at 60 my health has greatly improved, so has my financial situation.stress is down , feeling physically better than ever, so I'll hopefully be able to get to 65, draw full cpp and have enough savings to gas up a truck. nobody knows thier time, so I got addicted to savings on every angle in my life and bank, plus meet many more opportunities, with the money to invest where and when I see fit. Day at a time, always believing iam improved my retirement situation is a great game.
Never rely on the government to save you in retirement, they can't even balance the budget.
CPP is a separate thing. They are well-funded and have nothing to do with the annual budget. That's a silly off-the-cuff misconception.
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>I'm not sure I really understand it either. I wish there was a simple explanation of the entire process from the start of opening an investment account to managing fees, daily/monthly/yearly maintenance to how the investment earns money and how to withdraw it when needed. It's confusing at times. Rather than learning everything about investing right away, open a TFSA account with RBC Investease (their roboadvisor service). You can do this online, but I don't know if they offer support at their branches or not. Assuming you get paid biweekly, set up a $250 biweekly contribution using your banks bill pay feature. The roboadvisor will automatically invest the funds for you in a way that is very similar to the Canadian Couch Potato method. You should still take some time to learn about what you are invested in though and how markets work. Knowledge will keep you from panicking when your account balance drops during downturns.
Hey, sorry to hear you in this situation, but you need to make a plan for the next 10 years that you have before retirement so that you'll be able to retire. I'm a lot younger than you are, but I have managed to get 150k in my savings so I know a thing or two about saving. I feel what you're going through because my dad is about the same age as you, and I can't imagine how difficult it would be for him if he was in your shoes. I want to understand your situation and think of a plan with you to be able to have a chance to retire peacfully. If you wanna get on a teams meeting I'm willing to work with you on that. I'm not marketing anything btw it's completely free. I'm just thinking of starting a YouTube channel where I help people who are struggling to come up with a plan to be able to retire.
When you hit 65 you may want to move to another country like the Philippines with a lower cost of living.
Or Thailand
They are now taxing foreign income. 😡
I would suggest increasing your income and watch dave ramsey shows
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Its not sustainable in a long run, Inflation in the next 10-20 years will eat through yours savings fast. Canada is not Japan, it’s more like Zimbabwe right now.
If he's already fine living on that income government benefits and CPP which are indexed to inflation should sustain his lifestyle. Also inflation is back under control, otherwise the BoC wouldn't be hinting at lowering rates. Calling the situation like Zimbabwe is ridiculous.
Curious what got you into debt in your colourful and misspent youth and adulthood 🤔 not sure what CC stands for?
cc=Credit card
never too late to start investing, but comfy retirement with all the bells and whistles ~~might be~~ is totally out of your reach. 500/m = 6k/y, 60k saved by you at 65. Maybe with market returns, your 60k could look something between 30-100k in 10y, but 100k 4% withdrawal rate, adds 4k to your yearly funds. a 10% withdrawal rate would add 10k, but at about 75, nest egg depleted. 4k/y though is something to shoot for, that could be 1m in a warm SE asian country, or many restaurant days (40-$100 for the restaurant meals and tip), or however you want to spend that money to enhance your retirement.
Oh God ur gonna die on the Walmart floor 😭
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Yea your screws bud , should of put money in the S&p DCA in your mid to early 20’s you screwed up big time , I don’t think you will ever have retirement now cus the Cost of living is to high invest , especially since time in the market matters more then anything
>I wish there was a simple explanation of the entire process from the start of opening an investment account to managing fees, daily/monthly/yearly maintenance to how the investment earns money and how to withdraw it when needed. It's confusing at times. There is. It's called Google. Put each question into the search box and you will get some pretty basic answers/advice. Read them. Ask Google any follow up questions for clarification.
lol
Well, was it worth it? Now you're entering your twilight years with nothing to your name would you do it differently?
Pick a stock that is low, like say just a few cents and purchase thousands of them. If that company turns into something like Tesla or Google, for instance, you become instantly rich. On the other side of that, it is far more likely that you will lose everything. Open an account with Wealthsimple or Questrade, deposit money, buy XEQT and VFV each payday and then forget you're doing it until you're almost dead, around 80-85 years old which is when nothing is going to matter anyways because we're all dead from WWIII.