Do Canadians Really Need 1.7 Million to Retire?

Рет қаралды 12,620

Жыл бұрын

BMO released a survey that says Canadians believe that they will 1.7 million dollars to retire in Canada? Is this really the case? What kind of spending would a person with that kind of accumulation be able to do? Kent breaks down the real numbers, and perhaps helps calm some "survey stress".
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Пікірлер: 67

@andrewbutler4082 Жыл бұрын

Another great video. I read The New Retirement,,, a book written a few years ago by a group of Canadian financial advisors. That book, along with these videos completely changed my perspective. My wife and I are shooting for a 60% replacement rate. That includes CPP, OAS and our registered investments. Much more of a nuanced approach, more reasonable, more attainable. I think I would also reach out to Kent in the future. Thanks for all your hard work with this type of content.

@91rss Жыл бұрын

would be cool if you did a spot to help people figure out what the differences are on a T5 between box 25, and 26

@Frogfrog1234 Жыл бұрын

I’m glad that you seem to be the first people I watched ever mentioned that the principal we save could be depleted over time ideally just perfectly until our death. Surprisingly rarely people ever talk/think about this and keep saying that the return of our saving must be enough to cover 100% of how much we need.

@munnjean Жыл бұрын

really ,,, let's be completely realistic, the average Canadian has very little chance of having 1.7 million when he retires ,,, that number is absurd to say the least.

@crisb6755 Жыл бұрын

This is a great video but there are a few things which are not really clear from the survey and you analyze. - Is the survey referring to a family (couple) saving or just an individual saving? -How many people are getting the max CPP? The average CPP is less then 75% from the max. amount. -The minimum cost of living is higher then many people consider. I consider that a couple need a min ~5000 per month after tax to have a decent life. Considering that CPP is lower and you are not too savvy with your investing (if you pay somebody to invest for you I can guarantee that you will never get 5% return after 2-2.5% fees) then you will need min ~ 1500000 in savings. Regarding the cost of living in different area of Canada, can you do a video about this? I am paying 5000 property tax on my 1700 sqf house and I am not living in Toronto or Vancouver.

@crisb6755 Жыл бұрын

Whoever is having a defined pension plan in Canada is blessed and should have a good retirement. There are people working entire life and need to relay on 1250/month CPP. Do you know that if you work and contribute 40 years to CPP you are getting only ~200 more then somebody who didn't work at all and get the GIS?

@mikekovacs8981 Жыл бұрын

I was wondering what Ken's take would be on this survey. $1.7M seemed staggeringly more to me than anyone would reasonably need to retire.

@JDRichard Жыл бұрын

Great video. Should you take your home into account the retirement figuring that you probably will sell your home when you're 80 to sponsor retirement home living

@ronotoole4537 Жыл бұрын

I need about $200,000 to retire and will still have money to travel!

@krisvin7761 Жыл бұрын

You mean yearly right

@ronotoole4537 11 ай бұрын

I will have 200,000 saved and will be able to live off OAS ,CPP.and GIS and the 200,000 will be extra money!

@user-rv2zj8zu5b 4 ай бұрын

Who are they asking? If they are asking a 20 something old then yes by the time they retire they will need 1.7M in devalued dollars.

@seanfrank4158 Жыл бұрын

I think it comes down to a lack of fundamental planning. I know I was in the dark with all this retirement stuff a few years back. I started working with Kent and the picture is much clearer than ever. I would love to have 1.7 million in retirement but I know that my needs are much less.

@rrwoodyt Жыл бұрын

I was hoping you'd comment on that article, Kent. Good breakdown of the numbers! For the hypothetical person you were describing, why would they draw on their TFSA at all? It seems like they'd want to leave it alone to grow as long as possible, maybe even leaving that as a tax-free inheritance for their kids. Any thoughts?

@K4Financial Жыл бұрын

If you have enough, then you wouldn’t. You’d just let it grow and keep adding to it. Most people don’t have that luxury

@91rss Жыл бұрын

30 yrs ago I remember Garth Turner saying you needed a million not including home value. last few yrs killed that

@shirleycrosner634 Жыл бұрын

Garth was correct

@shirleycrosner634 Жыл бұрын

Number is not off base - cars and shelter are not cheap - but what makes a difference is personal obligations - commitments and staying in low debt.. / Not rocket science

@neolithic3 Жыл бұрын

Many of us don't have a house we can rely on in retirement. I don't think well over a million is that much for a retirement that could last 35+ years.

@joebob-vy9mq Жыл бұрын

$1.7 mil may not be the expected amount required for retirement, but I don't think it's far fetched as a safe amount of money to retire on. The amount of time the money have to last could be anywhere from 0 to 50+ years. I don't think anyone would feel safe retiring know that their money will completely run out at age 90. Regarding investing, it also comes with a risk. There are plenty of investments with a negative rate of return even when investing in low risk investment. So you have to be prepared for the worse.

@roofpizza1250 Жыл бұрын

lolz.

@ariefraiser140 Жыл бұрын

Lot's of people retire comfortably knowing there's possibility their money runs out at age 90. If you want a sure thing then I suppose just continue working until you pass away.

@TheNewSchoolGamer 7 ай бұрын

Yeah, the $1.7M figure is absurd to be honest, most Canadian households will never come close to $500k in net worth in todays dollars

@jagjitparhar214 Жыл бұрын

Nope. This is a number to scare us and work till death! Where I currently work the defined pension plan is currently 156 a month for every year worked. Up to a maximum of 35 years. Adds up to an awesome amount of you can max out. Recently the cap was upped to 40 years. So many guys nearing retirement are going to work the additional 5 years to bump up the monthly payment. Ludicrous!!

@K4Financial Жыл бұрын

Well, that pension is worth a fortune if you work 40-years

@jagjitparhar214 Жыл бұрын

@@K4Financial it’s worth a fortune after 35 years. Plus it goes up roughly 8 per month per year. So even conservatively it will be 180 monthly in say 10 years. The point I’m was trying to make was. When is it enough? A lot of these guys will also have max CPP too.

@K4Financial Жыл бұрын

@@jagjitparhar214 yeah, that’s certainly a very good retirement income. Way more than the average Canadian wants/needs

@seanfrank4158 Жыл бұрын

Holy Hanna......156 a month per year of service? That's awesome. Ours just bumped up to 85 a month per year of service and I was happy with that.....

@jagjitparhar214 Жыл бұрын

@@K4Financial yup. Unfortunately for me I started late. I might end up with 19 or 20 years in the pension plan before I retire.

@kenny8351 Жыл бұрын

Now run the number with a retirement age of 60. How many people even make it to 90. 65 is too late to retire.

@dynomike1964 Жыл бұрын

$ 1.7 million ! they must work for the government.

@JohnSmith-ps7hf Жыл бұрын

1.7 M is not enough. My accountant said the current FU number is USD 2.5 M per person due to recession and Biden's money printing policy.

@stancoleshill8925 Жыл бұрын

No. It really depends what you invest in doesn't it ???? If you buy G.I.C.s you will need that much because the government will tax a lot of it. If you keep it under your pillow, you might need that much if you own a Mercedes or BMW and rent a condo.

@johnnyboyvan Жыл бұрын

Discuss how much debt 🤔 the average Canadian possesses...it is frightening.

@gregmurphygolf Жыл бұрын

They likely did not survey any people who are retired or people like yourself, because $1.7M is just bollocks. my total net worth including my residence is near that amount and I have a very comfortable retirement. I think balancing your retirement portfolio between RRSPs, TFSAs and Non-Registered accounts is a more interesting issue. Since when you die without a spousal beneficiary named your RRSP becomes redeemed income or if you wish the biggest taxable paycheck your executor will ever see! Shocking things you find out about RRSPs.

@robocop581 Жыл бұрын

I don't include my residence as part of my net worth for retirement purposes because I'm living in it. I only take into account my other assets like rental properties and stock portfolio.

@miguelferruelo6997 6 ай бұрын

2.5%/yr Return?🤔

@christinee8353 11 ай бұрын

Thinking you may need 1.7 if you want to do freedom 55? Thoughts?

@K4Financial 11 ай бұрын

If you want to retire at 55, the number is probably somewhere around that, unless you have minimal spending needs.

@brightonshores Жыл бұрын

I don't know where they got that # from? I've been retired since 45[13 yrs ago], just sold rental property[got double what I paid], bought a couple acres and century home cash, so zero mortgage. Invested in physical G&S[250k], have over 100k in TFSA & RRSP[pulling that out to avoid bank bail ins], plus pension income... no need for 1.7 million lmao!

@ronotoole4537 11 ай бұрын

Question for K4.A coworker of mine told me that you cant make money investing in the stock market.They said the stock market just goes up and down.I told her not true.I told her the stock market goes up over 20

@ronotoole4537 11 ай бұрын

and 30 year periods.I told her you make money getting dividends even after adjusting for inflation.She disagree saying stock market just goes up and down over time.Who is correct???

@K4Financial 11 ай бұрын

@@ronotoole4537 you are

@ronotoole4537 11 ай бұрын

@@K4Financial thanks yes stocks go up over time

@ronotoole4537 11 ай бұрын

Over 10 to 30 year periods

@relaxgood5214 Жыл бұрын

The answer is NO

@xuxu4251 Жыл бұрын

Everybody doesn't need a million or two, some will never have that much anyway.

@Ram78979 Жыл бұрын

Agree 1.7M is way too much, but still the question is how much required to retire comfortably? In Vancouver or Toronto.

@K4Financial Жыл бұрын

There’s no flat answer unfortunately. Everyone is different and wants different things. Then it depends on what you have in guaranteed income and your estimated retirement date and longevity. Then it depends on your spending wants and needs. I have never thought to attempt to suggest a number, because all of the variables are different for everyone and then we have to estimate returns and inflation.

@RobertStevensService Жыл бұрын

Most retired folks just don't and didn't take the time to learn how the government pensions work or how the tax system works, like sheep they rushed to fill there RRSP each year when it's the biggest tax scam the government ever implemented. Live frugally during your life, max out your TFSA look poor on paper to the government and get benefits like the GIS.

@caperboy1169 Жыл бұрын

Pay now or pay later. RRSP basically pay for themselves and make you extra money

@davidhughes6048 Жыл бұрын

Lol. How is it a scam? I put money in and lower my tax bill. I invest the tax I didn’t pay. Then after 30 years of compounding I remove my RRSP money at a lower tax bracket because I have planned for this. Explain the scam. Clearly I have missed something. 😂

@xo7454 10 ай бұрын

and here im trying to target CAD7M... good to know!

@ladifabiyi7886 Жыл бұрын

i totally agree Kent 1.7M is way too much - I may have missed it but I dont see any videos within your playlists that help address some of this retirement hoopla especially for immigrants within Canada. Could you share something more reasonable for say 1M ,750k ,500k - within reason? I am sure your videos can help us discern the other metrics on our own.

@K4Financial Жыл бұрын

Unfortunately, the information on how much benefit money is paid to new immigrants in retirement is hard to find, so it’s pretty hard to do a video other than explaining CPP, OAS and GIS in general terms, but I know there is extra help available, I just don’t know enough to provide good explanations

@shirleycrosner634 Жыл бұрын

Each million $ conservatively invested in blue chip stocks - such as banks / Telecom / utilities - can generate approximately $35,000 to $40,000 of income yearly - it certainly helps - but its not a king's ransom

@caperboy1169 Жыл бұрын

Pretty sure they make too much to qualify for CPP

@K4Financial Жыл бұрын

That’s not possible. You’re thinking about OAS

@caperboy1169 Жыл бұрын

@@K4Financial you’ll pay it all back in taxes if you make over $70000 during retirement

@davidhughes6048 Жыл бұрын

Caper Boy: Also not true. OAS “clawback” comes well after 70k and even then just partially clawed back. You need a financial planner like Kent if these are your beliefs!

@caperboy1169 Жыл бұрын

@@davidhughes6048 read the other response . That’s how it’s done