Retirement money needs differ for everyone but do we need millions of dollars in our portfolio?
It’s a conversation many people don’t want to have but need to have before they retire.
Retirement money doesn’t click until the mid-’20s, perhaps early ’30s but definitely after that.
Maybe, not at all, and that’s common to hear from people who barely meet their everyday basic needs.
The question, “How Much Do I Need To Retire?” seems to be a popular topic and for a good reason.
Let’s talk about retirement money, planning and health problems to consider before you retire.
Do You Need Retirement Money In The Millions
Can I survive off the money I have saved plus any government pensions I will receive?
What we’ve been through the past couple of years, the answer differs on a situational basis.
Your debt and retirement lifestyle depends on what you can afford, especially if you are still paying your mortgage.
I don’t think there is a magic number regarding how much money you need to retire?
Canadians might be worried if they don’t have millions saved to retire but do we need that much?
Retirement Money Plans Before You Retire Early
However, if you plan to retire early, your debt to income ratio, savings, investments, and dividends are all factors.
Plus, there are many other questions you need to ask before you decide to retire early.
- Do you own your house or condo?
- Are there children involved or will there be?
- Will you rent the rest of your life?
- What are your retirement goals?
- Am I confident in my income stability?
There was a time I thought I’d need millions of dollars to retire, so we can do whatever we wanted.
Not so much these days. Why? Because what we want and what we can do are two different things.
Saving money, investing for the future and paying off your mortgage is fantastic.
However, have you considered the what if’s and how your retirement money and plans could change?
Investing Retirement Money In Our 20’s
From my understanding, Mrs. CBB started saving for her retirement when she was in her late twenties.
She had no idea what was going on as it was a company retirement plan called a LIRA which they matched.
A LIRA is a Locked-in Retirement Account which means she can’t cash it in until retirement age.
It’s pretty pitiful if you ask me, but at the time, it was worth it for her to invest in it.
There was a meeting for her work team with the company retirement investment company she attended.
It was so dull; she just wanted to fall asleep. For some people, money talks with little to no understanding just get blocked out by the recipient.
That’s how she felt, and I know you’re going to say, why didn’t she ask questions?
Oddly enough, I asked her the same thing, and she told me she didn’t understand what to ask.
Fair enough, and it’s true that many people invest their money and have no idea what is happening.
What she was smart about was participating since the company was going to match what she invested.
Hey, that’s free money, and as odd as it seems, lots of employees decided not to participate.
For some people investing in the future to build their retirement money was not plausible.
Investing In Real Estate For Retirement Money
In my twenties, I had already purchased and sold an apartment (flat) and bought a semi-detached home.
They weren’t my retirement investments at the time because I needed somewhere to live.
However, I was participating in a workplace pension plan that was quite lucrative for my age.
That money is still being invested in the UK, although I oversee it.
Outside of that, I had no other retirement investments but thought I was doing well for myself.
When I sold my house to move to Canada, I made quite a bit of money which helped us build our portfolio.
As well, Mrs. CBB had saved quite a bit of money when she sold her detached home two years prior.
When we met, she was paying $400 to rent a room in the basement of a house to save even more money.
Retirement Money Through Primerica
A year or so later, a friend of hers decided to join Primerica, where you would shadow an investment representative.
These Primerica team members would show up at your home instead of you going to the office.
It made investing retirement money easier because you were in the comfort of your home.
She was living with her boyfriend, and they started an investment account called Concert.
Primerica Concert is a mutual fund, and they invested in them under the direction of the advisor.
Then to her surprise, her boyfriend joined Primerica and was studying to be an advisor.
He didn’t follow through because working full-time was just too overwhelming for him.
Relationship Breakup And Retirement Money
The time came where they went their separate ways; however, they did not touch their retirement money.
They decided not to split the money and to keep what they had invested on their own.
About a year later, this is when I come into the picture and meet this Primerica advisor.
He was a good talker, and that’s about it, but I listened to what he had to say to her.
My money was not in Canada yet, as we left it in the UK for the time being.
There was something that made me uncomfortable about his knowledge about retirement money and investing.
He’s a guy in his 20’s who read a book, wrote some tests and became certified with Primerica holding our future in his hands.
Taking Our Retirement Money Somewhere Else
Around a year after we got married, Mrs. CBB took on a job in a Human Resources management role.
That was where we met our current financial advisor from Manulife, and we’ve been with him ever since.
In a team meeting, he spoke to the employees about the company’s RRSP’s and investing.
There was something about him that Mrs. CBB liked, and that was his knowledge and sincerity to his business.
It was then where we ditched Primerica and went with Manulife and have been with them ever since.
I know we will get all sorts of opinions on the companies we choose to invest our retirement money in, but it’s personal.
You see, I’m not investment savvy and prefer to pay the experts to manage our retirement money.
Since we have over a million dollars invested with Manulife, we’ve opened non-registered investment savings accounts.
Both our Tax-Free Savings Accounts and Registered Retirement Savings Plans are topped up every year.
Since we don’t live a lavish lifestyle, millions of dollars don’t appeal to us during our retirement years.
Our son has a life insurance investment plan which I will explain more about in another post.
We meet our advisor once a year to discuss our investments and any suggestions he has.
We’re well ahead of ourselves with zero debt and the mortgage paid in full.
Using all of the information we’ve given them plus our investments, we’re due to have over 2 million dollars of retirement money.
That’s not even including the 5-figure income from running this blog, as we didn’t disclose that.
Sounds fantastic but do we need that much money?
Our Retirement Money Plans
Both Mrs. CBB and I had a serious conversation about our retirement money last week.
We wanted to create a retirement plan or goals list, so we had some idea of our future adventures.
I don’t know if we are boring or not, but here’s our thrilling retirement living list.
- Volunteer somewhere in the community
- Hang out with friends for tea or coffee
- Family gatherings
See, we are dull and anything else we discussed such as going for long walks, gardening was more healthy habits.
We are both in our 40’s, and I can retire at 62 if I want, although I likely will retire at 65.
Unfortunately, Mrs. CBB had to stop working due to illness and stays home.
My employer offers a defined benefit and recalls retirees to fill spots for crazy hourly wages.
So, I could earn extra cash when I retire if they call me back in for coverage.
Why don’t we buy a new vehicle?
That might be in the plans since the truck won’t last forever.
Staying Put And Not Moving To A Bigger House
We also decided that since we are mortgage-free, we would stay in this house until our son completes University.
I can already tell you that we aren’t going to move because who wants to move to a bigger house later in life?
We won’t want more property to maintain, renovations and overall to keep it clean and tidy.
Enjoying our retirement is what appeals to us, and often it’s just quiet time together.
Could It Be Cancer?
My dreams of owning a house in the country might happen or might not be depending on our health.
That leads to our retirement money and health status because things happen when you least expect it.
For example, my doctor found a mole on my back two weeks ago that looked odd.
A piece was cut by my dermatologist and sent to the lab for review.
I received a phone call from my doctor to say it came back abnormal and they need a more significant piece.
This week I’ll be going in to see a surgeon who will remove a more significant chunk of the mole to examine it.
Could it be cancer?
I don’t know, and neither does our doctor, so he’s not saying anything at this point.
The mere fact that they are worried makes me wonder why I question how much retirement money we need.
If I’m the breadwinner and get sick or die, retirement money plans will change based on savings and life insurance.
There won’t be as much money invested if I’m gone, but there will be enough for two.
Or what if Mrs. CBB passes away? I’d be facing the same situation but not as critical as if I died.
There would be changes to our long-term retirement plans and how much money would be waiting for us at age 65.
How Much Retirement Money Do We Need?
I think we will end up with far more money than we will ever spend, but a buffer never hurts.
Our son will get everything left to him in our Will, and we hope that he manages his money the proper way.
If you don’t have a Will, I encourage you to think about setting one up, especially if you have kids.
Epilogue is a simple, fast, and affordable way for Canadians to create their Will and Powers of Attorney online.
Another great online Will Kit provider that is popular in Canada is Canadian Legal Wills.
Both are the best in the Canadian industry of online Wills and are cost-effective.
We paid $1000 for our Will but likely would have done things differently if we knew about the online Will kits.
Save Money Today For What You Need Tomorrow
We still have years (we hope) to teach him about money management which started with chores and tooth fairy money.
Currently, he’s saving all of the money he earns or gets from the tooth fairy in a jar.
Yesterday he tried to persuade us into using the $5 to buy a video game on PlayStation.
We explained to him about saving his money to buy a house or a car at this point.
He agreed with us because he says he wants a mansion and fancy cars like Justin Bieber.
Then again, he thinks our house is a mansion, but it’s not.
The point is we explained about saving and what the outcome would be if he kept it.
I don’t think getting into investing at the age of six will stick, so saving in a jar works fine.
Using Retirement Money When You’re Sick For Care
Unfortunately, the one need most people forget about is health conditions and the costs involved.
Finding out you have Cancer, Lung disease, Dementia, Alzheimer’s, Heart problems and so on is terrifying.
Often seniors who are ill find themselves needing money for home care or put into long-term care.
The perks when you have retirement money are the ability to upgrade in nursing homes and long-term care, such as having a private room.
Did you know that some transfer services may not be paid by OHIP?
It’s not always that you get into a nursing home or long-term-care home in your city.
A two-hour trip from the hospital to an out-of-town long-term-care home using a Voyager-type van is almost $500.
For example, if you are rushed to a hospital via ambulance out of the city, that is covered.
However, you have to find a ride when you are out of the hospital and ready to return home.
Keeping Cash For Personal Needs
As well, living in a nursing home or long-term care home means you need cash for outings, haircare, beauty products, adaptive clothing, shoes, walkers, snacks and expensive transportation rides.
If a dental assistant visits, that needs to be paid for along with some prescriptions and eyeglasses.
Some seniors have benefits with their employer even after they retire, and some have none at all.
Services that are not covered will be paid by a power of attorney named in your Will if you cannot do so.
The Trillium Drug Benefit
You will qualify for the Ontario Drug Benefit (ODB) program when you turn 65 years old.
Some of you will qualify before you reach that age because you’re;
- living in a:
- long-term care home
- home for special care
- Community Home for Opportunity
- 24 years of age or younger and not covered by a private insurance plan
- receiving professional home and community care services
- receiving benefits from Ontario Works or Ontario Disability Support Program
- enrolled in the Trillium Drug Program
The Ontario Drug Benefit program covers most of the cost of approximately 5,000 prescription drug products.
When something you need is not covered, it comes out of your pocket or any retirement money you have.
When in long-term care, a shared room cost is close to $2500 a month, which my mother-in-law pays.
Her long-term care room is covered using Old Age Pension (OAP) and Canadian Pension Plan (CPP).
Add a cable fee, and perhaps you might hire a Personal Support Worker for the company and walks.
It all adds up, but it’s crucial to consider health deterioration and home care costs or long-term care.
Save Retirement Money For Tomorrow But Live Today
We’ve learned about our retirement money that we won’t need near as much as we will get.
There is so much fixation on retirement planning and how much money you’ll need to retire that we forget the obvious.
Health and Death.
We’ve concluded that if we want to travel, we should do it now.
You don’t want to be lying in a bed waiting to die (dementia) with two million dollars in retirement money.
Perhaps you worked hard and lived a frugal lifestyle to build your retirement savings to enjoy a comfortable life.
If only the future were that easy to predict, we’d all know what to do.
Unfortunately, if you’ve suffered loss or seen people who can’t use the retirement money they saved, you’ll understand.
Take time today to do what you might not be able to do tomorrow because you can’t even if you have the retirement money to do so.
Although budgeting is critical, investing is a must, so is living life to the fullest.
It’s your money, so spend it wisely and follow your life’s dreams when you can.
Balance all three of the above and have no regrets in the end when there no longer is a choice.
Travelling and Illness When You Retire
My mum and dad can no longer come to Canada because of their health and the cost of travel insurance.
Sometimes people incorrectly assume that their existing conditions would not be covered by a policy. However, most of the time pre-existing conditions can be covered, as long as you disclose the condition to your broker so you are put on the proper plan, and the condition meets the plan’s stability criteria.Media Quote Canada
So, you see why it’s essential to create a retirement plan factoring in possible health and illness problems.
Retirement Money Can Go Either Way
As for our retirement plans, we plan to continue living a simple life and travelling when possible.
There’s no doubt you’ll still find us at the second-hand shops either as we love to go.
Frugal to the grave while living the retirement life we planned with our money.
Discussion: Have you ever discussed what you want to do with your retirement money? What about the consideration of health and illness?
Please comment below and share with us what you plan to do, and perhaps you might have some insight on our plans you’d like to share.