Can I Retire As A Single 65 Year Old With $125,000?

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Can I Retire As A Single 65 Year Old With $125,000?

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Күн бұрын

➡️Our financial planning services: www.parallelwe...
In this video we'll discuss two scenarios of a single 65 year old looking to retire. The first scenario is a person with $125,000 and the second scenario is a person with $250,000. How much retirement income will you be able to draw in each scenario? We'll go through that in this video.
If you have any further questions about this video's topic or any financial planning questions in general, I encourage you to find a certified financial planner in your area or book a consultation with us to get your retirement plan on track.  You can learn more about our services at www.parallelwe...
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OUTLINE
0:00 - Intro
1:05 - Scenario One
4:56 - Scenario Two
This presentation is intended for information purposes only and does not constitute an offer to buy or sell our products or services nor is it intended as investment and/or financial advice on any subject matter. Every effort has been made to ensure the accuracy of its contents. Certain of the statements made may contain forward-looking statements, which involve known and unknown risk, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Returns are not guaranteed and past performance may not be repeated.
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DISCLAIMER: The videos and opinions on this channel are for informational and educational purposes only and do not constitute investment advice. Adam Bornn is not registered to provide investment advice and as such does not provide recommendations - those looking for investment advice should seek out a registered professional. Adam is not responsible for investment actions taken by viewers and his content should not be used as a basis for investment trades.

Пікірлер: 167

@Bchg673 Ай бұрын

Thanks so much. I asked and received this example for a single person!

@ParallelWealth Ай бұрын

You're very welcome!

@cfetzko Ай бұрын

Regarding small amounts of money, my father, a retired accountant, has always said, “it’s a lot if you don’t have it”. This completely aligns with Adam’s thinking on this matter.

@heidilevens6284 Ай бұрын

Excellent comment and so true.

@dhab146 Ай бұрын

Thank you for listening to your viewers!

@ParallelWealth Ай бұрын

My pleasure!

@jovicrazed Ай бұрын

Thanks for doing this video. I always appreciate seeing options for single people who won't be able to income split and won't have twice the CPP and OAS coming in. It would be nice if the government could offer something to single folks as they offer income splitting to couples.

@ramspace Ай бұрын

Service Canada has a good GIS calculator.

@dominiquetheeasyminimalist Ай бұрын

You are a man of the people 🙂 Thank you for this video, and for pointing out how what seems like a ridiculous $1k can really add up and make a difference for so many people!

@rb239rtr Ай бұрын

Adam, you did not mention GIS. Taking OAS and TFSA, you get an additional $10k per year or so. Then CPP plus a tiny RRIF

@SPECTREFTW Ай бұрын

Correct. I'd love Adam to do a simulation on this strategy. It's a major component and CFPs don't seem to discuss TFSA-only withdrawals from 64 to 69 to take advantage. It may not be around or function to the same capacity in the future though as potential changes are made to OAS/GIS (legislative risk).

@user-dq4ri6fi7b Ай бұрын

That's my plan, I have a very small pension so i'm taking oas and gis at age 65 and using my tfsa to fill in the gaps. This will let me build my cpp and when I hit age 70, I will take the highest cpp offered to me.

@a.j.4644 Ай бұрын

@@SPECTREFTWTY for mentioning legislative risk. OAS and GIS are not self-funded, and so have to be dealt with in every budget. As things strain, the first thing I see happening is that TFSA withdrawal, while never taxed, will count as income when determining GIS eligibility. Government already tracks the amounts. When some seniors need food banks to avoid being homeless because they are forever renters, I doubt governments and the public will want to fund GIS for people sitting on 7-figure TFSA s and claiming their income is "0" because it's all from their TFSA while they wait until 70 for CPP. Trust me, there are Redditors under age 40 who believe this is their brilliant plan to live richly in retirement while taking money intended for impoverished seniors.

@murraytown4 Ай бұрын

The short answer is no. The long answer is $125K for a single person is not the same as $250K for a couple. It’s ridiculous to think that a single person’s expenses are only 50% of a couple’s. A single person requires about 70% of a couple’s income to equate. So the number should look more like $175K.

@anniesshenanigans3815 Ай бұрын

thanks for this.. I don't want a long ass answer.

@Coyotehello Ай бұрын

Thank you Adam. It is great to see the different scenarios.

@ParallelWealth Ай бұрын

My pleasure!

@Bchg673 Ай бұрын

I wanted to share with you how (happily) I have used some of your videos: I have collected information from government sources on how much cpp and OAS I will likely receive, and ditto with my small work pension. I have put it all in Google sheets. I have some money in TFSA and RRSP, and so seeing how much 125k or 250K can yield a year in addition to what I will receive is very PRACTICAL. I still have 5 years to go before retirement and on one hand I can see that I do not have enough yet but I still have some time left. And your videos have shown a realistic approach! THANK YOU!

@evadeanu1 Ай бұрын

I like these videos. Very informative. Thank you Adam.

@sandeeptanjore1253 Ай бұрын

Once again another informative video by Adam. Well done!

@ParallelWealth Ай бұрын

Glad you like them!

@a.j.4644 Ай бұрын

Since you're taking requests from the peanut gallery, i want to ask for a video about planning for couples with 1) more than 10 years difference in age And/or 2) later in life kids, so that a senior is old enough to collect CPP while still having a child or children under 18 and collecting Canada Child Benefit and contributing to RESPs.

@rongrant3500 Күн бұрын

Another good video from PW. Of course there's a lot more to waiting until 70 to take CPP/OAS. My retirement income is limited, so I relied on that CPP/OAS income at 65-70 to allow me to make my annual RRSP contributions, saving me thousands in taxes over those five years and building my RRSP. Simply put, if I had waited until 70 for CPP/OAS, I would not have been able to make those tax-saving RRSP contributions over those five years. (while also boosting my RRSP) I think that partially offsets the increased CPP/OAS by waiting, and increased the 'break-even" to the point it's not so clear. A bird in the hand is worth two in the bush!

@katsadventures7027 Ай бұрын

Yes, I want to get every possible dollar that I can get out of this. Oh my goodness.

@marketsqueezer Ай бұрын

Of course you can because no one knows how long you will be alive. My mom thought she should retire and after a month she started her retirement she died.

@liveandretireusa Ай бұрын

The analysis is easy to understand and very informative

@ElenaLara-934Gs Ай бұрын

On this level of CPP, the person with 125K in savings will be better off take the whole 75K from RRSP, pay the tax and be done with it. Then based on the current GIS tables they can collect 389.43/month tax free. Which gives them total income of 25514.64. At that income level there are probably no taxes to be paid. Throw in GST rebate and some provincial income supplements and the income will probably be around 27K. Not much, but there are some services that are discounted for GIS recipients.

@martik778 Ай бұрын

It's almost a wash. 20k tax on that 75k - 55k in a TFSA generates ~2k = 26,800 total income w/o RRSP,. With RRSP income of 3k/yr income is 26,300 with lower GIS of 275ish

@martik778 Ай бұрын

You need to redo this with GIS and with an accelerated depletion of RRSP to maximize GIS later

@rikawchu Ай бұрын

I’d be curious to compare GIS for a modest income single person when you do the RSP meltdown early, vs living off TFSA (and OAS) only from 65-69 as they’d then get max GIS for those few years. Is it better to get a lower amount of GIS for longer (age 70 forward, taking CPP at 70 with RSP depleted early) or get full GIS 65-69, living off TFSA and then no GIS while melting down RSP after 70 and then (presumably) some GIS later when RSP is gone?

@martik778 Ай бұрын

@@rikawchu Usually best to take CPP early if you reply on GIS because there'll be less clawback with a lower CPP. With a smallish RRSP it can be better to take the tax hit and collapse it in a year or 2, then get max GIS thereafter.

@krysh8725 Ай бұрын

Thank you Adam , great video . Exactly what I asked for 😊

@ParallelWealth Ай бұрын

Glad it was helpful!

@loveFFKamloops Ай бұрын

Thanks so much for the info! I am 63 planning to retire at 68 but outside Canada ? Can you show how that works ?? Thanks love your channel 🇨🇦🇨🇦🇨🇦

@cdnsilverdaddy Ай бұрын

Take ramifications … consult a good planner who knows the rules deeply .. we’re the same .. now 61 but may retire at 63 or 64 and live in Taiwan 🇹🇼 (safer and better than in Vancouver) for 5 months when it’s cold here .. Nov to March

@patriciaroller6007 Ай бұрын

Thank you so much. Very informative! I’m happy I have a DBP as well.

@NickShoust Ай бұрын

Can you do a reverse calculation to see how much is needed to retire are age 45 to get $36k after tax and 2 scenarios CPP@65 and CPP@70. How much would an individual need to make that work ?

@lisahobbes3655 Ай бұрын

If you can, I'd also like to see this, please, Adam. Thanks!

@katydidnt3906 Ай бұрын

What about GIS?

@brucebanner2222 Ай бұрын

I love this Adam! Thank you so much! I have hope to retire sooner than l thought.

@Larry_Kabberga Ай бұрын

You are missing entirely the GIS component as neither TFSA nor OAS count as income. How does this software factor in GIS? Could be substantial in this case.

@johnwillock6787 Ай бұрын

At the number Adam uses I don’t thing GIS is a factor.

@martik778 Ай бұрын

@@johnwillock6787 Income < 21.6k excluding OAS gets GIS so yes it is a huge factor

@investmentinrentalproperti2163 Ай бұрын

I think OAS is taxable income

@martik778 Ай бұрын

@@investmentinrentalproperti2163 But OAS is EXCLUDED for GIS

@Larry_Kabberga Ай бұрын

@@investmentinrentalproperti2163 it is, but it does not count towards GIS calculation.

@garth217 Ай бұрын

Good video once again. But I question the CPP delay until 70 once again. The first scenario the person has $125,000. That has to last until 80 or 90.over 30 years that mid 4 grand a year. Or over 20 years it's just over 6 k. It effectively wipes out your GoGo years. With so low savings a person in that position would be most likely to take CPP early vs delay because they want to feel secure now. I really can't see them doing an RRSP meltdown. Even if the math is correct and I believe it is I don't see it happening. As a retired First Responder I spent a lot of time in lower income neighborhoods. What I experienced over 30 years was people live for NOW. I don't see a lot of folks with foresight.

@user-nw4xe1lf2p Ай бұрын

yes but that is the point of the video, people live for now, but this shows there is a better strategy. Will it be used by most of those with $125k in savings, no, but it could be and it might be a better strategy for them. Every person is a somewhat unique situation, and can use this to be educational vs the gut fell of live for now, to help make their decisions. Though I expect you're right that even if they know this they will stick to the default take @ 60 plan and steady RRIF income

@garth217 Ай бұрын

@user-nw4xe1lf2p My aunt passed away 1 year ago next week. She had a very small CPP income as she worked in my grandfather's small corner store and didn't pay into CPP. She had a very modest home in a low income neighborhood, her condo fees were more than the RRSP meltdown if taken over 30 years. She died at 84 not touching her inheritance of 130,000 which my great aunt left for her. It lost value during covid and didn't recover before her death. She lived on GIS OAS and $320/ month CPP. The older generation always saved, the newer ones spend and use credit then complain about not being able to afford a house. Somewhere in the middle is the space called living.

@lw1405 Ай бұрын

Thank you Adam!

@ParallelWealth Ай бұрын

My pleasure!

@hbbstn Ай бұрын

Where can you live in Canada with that money not owning a place?

@kimc555 Ай бұрын

Extra 100$ a month: that’s half my groceries. Uh, no. That’s barely anything. 32k a year - where are ppl living on that??

@garth217 Ай бұрын

It all depends on your circumstances. $100 can make a difference to many.

@erinsalisbury6114 Ай бұрын

Many people live on that or less. My mother lives in Toronto as a low income senior with less than $30,000 and an extra $100 for a senior is a chunk of groceries, cell phone or other monthly payments.

@bradparks5023 Ай бұрын

Why don't you include GIS. I find that iit s the hardest source of income to figure out, especially when making RRSP withdrawls. Some help with that would be great

@mehretnegusse8569 Ай бұрын

Thank you for everything.

@ParallelWealth Ай бұрын

You are so welcome!

@hbbstn Ай бұрын

With that money, I would have to retire in South America. Your money instantly multiplies by 4.

@katydidnt3906 Ай бұрын

Except you can't collect OAS or GIS if you aren't a Canadian resident.

@rsgrsg951 Ай бұрын

Gis for sure but oas you can after 20 years spent in canada or if your destination country have social security agreement so you can combain possible working years in both countries...

@minoozolala Ай бұрын

@@katydidnt3906You can collect OAS but not GIS.

@nickyfurlano8531 Ай бұрын

As a single person I'd say you need at least 2 million dollars to retire on assuming no defined pension plan.

@ParallelWealth Ай бұрын

Everyone will need a different number. If you retire early and spend a LOT, then $2m may be your number. That would be much higher than majority would ever need or spend.

@islandgirl3312 Ай бұрын

In what world do people have $125,000? I've never been able to buy a home, my car is worth $1,000. I get CPP, GIS, OAS and still work part-time in order to live. I took CPP at 60 and still pay into it as I continue to work at age 69. If rents weren't so high it would be alright. I see why people talk about living in an RV.

@garth217 Ай бұрын

In my world. I have over $500,000 in cash and investments, I just bought a sports car and a new truck last year. I worked hard for it. I got a good education and sacrificed for decades.

@islandgirl3312 Ай бұрын

@@garth217 That's great for you. Try being a single mom raising three children on your own and just trying to get them through school and into a decent career. Or being one of Canada's many disabled who barely scrap by. Just because someone doesn't have $125,000 to retire on, doesn't mean they haven't worked hard or sacrificed.

@garth217 Ай бұрын

@@islandgirl3312 and working hard and being successful doesn't make you a bad person either. Don't come here looking for sympathy! We all had it rough. Some of us just brought more to the table

@martik778 Ай бұрын

@@islandgirl3312 You've likely worked harder than those with the 500k RRSP's. You haven't been so lucky due to life's circumstances. My Mom was a widow in her early 30's and raised us kids all by herself. Single mothers like you should get much more support now and in your senior years!

@garth217 Ай бұрын

@@martik778 I was a first responder for 30 years. I carried folks like this all that time

@earthsteward9 Ай бұрын

Thank you!

@lisaplanty Ай бұрын

Great videos thanks so much question how do you account for an emergency fund when you calculate all of this it seems that the numbers are mostly for how much you have each month to live off. What about an emergency fund as well and what is a good amount to have for an emergency fund

@user-dq4ri6fi7b Ай бұрын

He has shown the 'most' someone would/could receive in the each scenario. So to have an emergency fund, one would have to save from the amount they receive each month. Same way it works in real life, no matter your wage, if you want an emergency fund you have to save for it from what you take in each month. I suppose an emergency fund would depend on do you drive, will you need tires and car repairs, do you own a home, will you need a roof or new windows, do you live in an apartment, in which case you probably need very little for an emergency.

@senorbeaver1 Ай бұрын

Any chance you could do a video on retiring on dividends? I’m currently receiving a $1500 per month dividend in an RRSP brokerage account and $700 per month dividend in a TFSA brokerage account. Both of which are set up on DRIP. Do these dividends count towards withdrawals from my registered accounts when I’m ready to start pulling out funds? I.E Will my TFSA run into the negative if I transfer my dividend payment into my bank account but never touch the principle amount? Thank you

@maureenmurphy Ай бұрын

That’s my question as well

@MM-tw6cm Ай бұрын

as of June 17- i have 3979 more days until the day after i turn 66 and plan to retire then- I will be looking into your planning services to see where i can maximize what

@tdddcd Ай бұрын

Thank you for what you do.Good information. Question: What happens if you take the CPP and OAS at 65 and you still work full time and still pay CPP until 70's. No house. Some RRSP and TFSA? can you say what is good/wrong? Please and Thank you

@paulcarr4126 Ай бұрын

That would be so nice to have all that extra money when I'm 90 ! What percentage of men live to be 90 ? And what quality of life do we have from 80 - 90 ? Don't plan on saving your money for 90. Take your government money aka CPP. ASAP and enjoy it before you die

@G5rry Ай бұрын

The break-even point is long before 90. By waiting, you end up getting more "government money" (It's your money. It's a pension plan, not a government benefit).

@garth217 Ай бұрын

@@G5rry it's personal choice. Numbers or averages mean nothing if you don't fit into it.

@mikechr88 Ай бұрын

"Take your government money aka CPP ASAP and enjoy it before you die", and you write this seconds after watching a video that specifically shows that by deferring they could get more money every year, from the very start, and with higher percentage of it being guaranteed indexed income. You will be missing out.

@garth217 Ай бұрын

@@mikechr88 getting more in your slow go and no go years doesn't make sense to me. As you age you need less not more because you drive less, go out for dinner less, go to movies or concerts less, travel less.

@mikechr88 Ай бұрын

@@garth217 Perhaps you missed what I wrote and what was shown: "get more money every year, from the very start". That means every year, from the start of retirement. Every year. So, including go-go years.

@elvisisalive2716 Ай бұрын

If he had a good whole life or universal life policy from an early age, he'd probably have 200k in CSV and a nice tax free loan against that would be an ideal way to top up savings. I'm not a life insurance fan, but 'some' people could benefit from that cash surrender value for loans and self financing if you can afford it, rather than other investment vehicles.

@markisaspy Ай бұрын

Great video, as a Single person this was very helpful. Question: What if you retire at 60 and don’t collect CCP until age 65, based of this video’s dollar amounts, do you get penalized for not contributing for the last 5 years before hitting 65? And if so at what %?

@glenn8586 Ай бұрын

I recently had a plan done by your company, and the effective tax rate is nowhere near normalized through retirement. Is there a scenario where it should vary greatly

@StephenRoss-po1rp Ай бұрын

I am 59 I have to keep working I will be in that boat How bad is it going to be for me ?

@douglawrence6066 Ай бұрын

Why is the assumed rate of return only 5%?? I get the notion of being conservative, and hood years and bad years, but the S&P 500 has had an average return of almost 10% over the last 70 years. People are working longer and harder then they need to using the 5% number.

@ScornedRemnant Ай бұрын

Point taken, but a lot of people, especially older people, are afraid of equities, even blue chips.

@fduran6993 Ай бұрын

I am writing from Europe. In my opinion 5% return on capital invested is too optimistic and risky. What scenario will be with a return rate of 3%?. You can bet on stocks while you 😂can recover from a stock market loss, but once you are retired then there is less chance to maneuver. You could end up losing your capital - equity and then be stranded.

@ScornedRemnant Ай бұрын

@@fduran6993 It depends on how well-funded the individual is with non-investment retirement income compared to outlay.

@Sergio-xi3ii Ай бұрын

Can I retire now, Single at 63, recent (2 months ago) massive back surgery and now on CPPD. $1030/mth and $400,000 in savings (TFSA, SDRSP & Cash)? My earning potential is gone now and worried at the cost of living now and how it’ll go up, I’ll be in trouble. Will my savings hurt my OAS & GIS? Thanks Adam

@user-dq4ri6fi7b Ай бұрын

Your savings won't hurt your oas or your gis but interest earned can lower your gis. The same way rsp withdrawal and cpp will hurt your gis but tfsa won't. The only thing to hurt your gis is income. Go online to an oas calculator, you answer a few questions and it will tell you what you will/ can receive at age 65, for both oas and gis.

@mrbbqlvr4274 Ай бұрын

@Sergio… Cash & TFSA won’t hurt OaS or GIS. Income from RRSP will if it is too much. You will need to tell Adam how much of that 400K is in your RRSP to get a clear answer. Best of luck!

@h.f.4095 Ай бұрын

The answer is NO.

@lizp.9513 Ай бұрын

The answer is yes, if you have it set up where you can. I retired last year and own a 200 sq ft tiny house and have just over that amount in retirement savings. My life is simple yet fulfilling. It all depends on your expenses, spending, social circle, and what kind of retirement you want. Also, my net worth has actually increased since I retired 🤷‍♀️

@hbbstn Ай бұрын

How long do you need to be working in Canada to be eligible to 75% of retirement?

@piethermanus8777 Ай бұрын

@VP-nz6ok Ай бұрын

Sure, delay your CPP, great, ASSUMING you live that long!

@colinmagee5155 Ай бұрын

Especially if single, who cares how long you live? 10, 20 or 30+ years, doesn't matter when because you're dead and it's only you. And if getting more money every year during those 10, 20 or 30+ years, who cares what the source is each year. Couples are a little more playing the odds/risk management since, once dead, your spouse loses your OAS money and probably most or all of CPP money

@nickstark8479 Ай бұрын

Statistically, most people will... If you don't live that long, great - you made it to the finish line... The problem comes from being "cursed" with a long life but not enough money to sustain yourself.

@dalegribble60 Ай бұрын

I just started collecting my CPP after talking to friends and colleagues. Not one suggested waiting.

@cheyenne_spring Ай бұрын

Single here and I'm planning on delaying cpp until 70. It makes sense long term to have the extra money per month. When I worked I didn't get a 42% increase in my pay over 5 years, ever, especially the last 5 years. For me, its worth the wait to get that increase.

@G5rry Ай бұрын

It's not "assuming". It's planning for what is most likely. Do you assume that you will get hit by a bus tomorrow?

@TechPeasant404 Ай бұрын

if it's in bitcoin ETF... perhaps

@teebee5326 Ай бұрын

Is this always based on not getting MPP?

@kirk8359 Ай бұрын

So… that’s a no? Maybe you could explain this in English cause I didn’t hear an answer to the question…which I interpreted as having $125k in the bank making 3% with no other source of income. You talk of $27k in income, where’s that coming from? Did I get a job at McDonalds?

@paulinanelega Ай бұрын

The 27K comes from drawing down the 125K - the balance remaining continues to earn 5%, less inflation adjustment - coupled with OAS, and then CPP.

@LEX-rh8jr Ай бұрын

Answer is - NO ... 🤔 🍁 🇨🇦

@hbbstn Ай бұрын

Do you deplete all the $125k by 90?

@trevorritchie2575 5 күн бұрын

What will they do when their money is gone and the country goes broke? Better hold onto your money and the the CPP and OAS before they run out!

@edhcb9359 Ай бұрын

Retiring with $125k is basically living completely on social security and keeping the $125k as an emergency fund.

@deborahcabot3100 Ай бұрын

And that is was the majority of Canadians are retiring with, plus most do not have a company pension plan either.

@edhcb9359 Ай бұрын

@@deborahcabot3100 How is living on that amount? Obviously it must be doable but is it livable or miserable? Why don’t most Canadians save more?

@Supe063 Ай бұрын

@@edhcb9359 ... the answer is ... more people need to watch these videos! Then, maybe, they'll understand.

@G5rry Ай бұрын

Social Security is for the US. These examples were for Canadians.

@edhcb9359 Ай бұрын

@@G5rry Looking at exchange rates, it’s actually less than $100k American. Crazy!

@timw4369 Ай бұрын

You can do it but you wont be living well.

@hagbard72 Ай бұрын

Sure, if you're going to live under a bridge.

@billwhitis9997 Ай бұрын

It was so absurd, that I just had to watch. Now, if we can only find a place in Canada where you can live on 27,000 dollars. This also makes an assumption that your RRSP (stock market) returns are stable. A premise that is really only for the ignorant storks with their heads buried in the sand. I figure 125,000 might get you 5 to 8 years, and that is only if the stock market, and inflation don't explode. Also, you would have to own your home, but it does not take into account the exorbitant rise in property taxes. If you have 125,000 dollars for retirement, and plan to live till 90, you may as well bend over and kiss you ass goodbye at 70.

@martik778 Ай бұрын

I f your home is paid off or you live in low income housing 27k is plenty to live on. Put the 125k-250k in 100% safe GIC's or buy an annuity - no worries about the market.