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Discussion Starter #1
Hi all.

I'm a 37 year old male who lives in the Prairies and works in the legal profession. I registered for this website about 5 years ago but never really posted. I'm a long time lurker.

My goal is to retire at 56. I have a common law wife. We have no children and don't plan on having any. I have a cat, he's enough for me.

I won't include my common law wife's assets with my updates. We keep our finances separate. She is also in the legal profession. She was never given any financial literacy lessons before meeting me. She also helps her extended family financially quite a bit. Her assets are not as sizable as mine but I have set her up with a questrade account and I use a couch potato portfolio for her TFSA and RRSP. She is starting to consistently build her investment assets. She earns about the same as me, but I predict she will eventually be elevated to a position in the legal profession that is extremely lucrative and pays far in excess of what I make.

Assets:

RRSP - $227,329.54
TFSA - $98,314.35
Non registered - $149,470.31

Cash - $288,739.10

Current Value of work DB pension - $129,712

2015 honda civic - for the sake of ease I will use half of the $15,000 purchase price we paid with cash (I understand there is probably some depreciation 2 years later) - $7,500

Liabilities:

My share (50%) of our monthly rent - $914.375 - we rent a 3 bedroom apartment that suites our lifestyle (includes a 2 story gym, close to running and bicycle trails) We have no interest in owning a house.

Monthly Cable/internet bill - $200 (she pays our hydro bill - about $30-$40 per month as well as our annual car insurance bill - $1500)

Personal worth - $899,950.92

My investments are divided between Mawer balanced fund, XIC and XAW. I invest with quest trade.

I understand I need to deploy far more of my cash. My desired cash reserves would probably be around $100,000. I plan to deploy more cash soon, however I forsee potential turbulence with the American election in November as well as COVID. I understand that trying to time the market is a fool's errand, but I will likely invest a good part of my cash reserves at the end of this year.

I have little in the way of expenses. I like to ride my bicycle (for fun and often to commute to work), workout, watch sports, play video games and I love to eat. I get takeout far more than the average person, but I'm fine with it. I don't drink, smoke or have any other money wasting vices.

When I plan my financial future, I don't count on my DB pension being there in it's current state. I recognize DB pensions are unsustainable and I expect big changes. I will consider my future DB pension as "a tip".

Using my pension plan's estimator, If I retire in 19 years at 56 years of age, I can expect a pension of $5,686.75 per month ($68,241 per year) if I select the option of 2/3 going to my beneficiary upon my death.

My wife and I enjoy travelling. We had plans to go to Europe this year, which obviously won't happen. 2021 seems to be the most optimistic timeline for international travel to resume for us.

Thanks for reading. Any feedback would be greatly appreciated.
 

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Off the top of my head.

You already admit the cash is far too high, and timing the market is tough, and if you examine the Canadian market year-to-date, I see the Financial sector down -20%, Telecom sector down -15%, Energy sector down -50%, Consumer Discretionary down -12%, but you want to wait until the end of the year to deploy that cash? Those vaccines look fairly promising, and as soon as it's a go, watch out.

A Defined Benefit pension of $68,241 per year seems to me to be a bit better than a tip - I guess you're telling us it isn't near fully funded?

ltr
 

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Congrats! You seem to be in good shape for your goal. You have not mentioned how much you will be saving going forward, but if you save at least 20k per year for the next 19 years, you will have a 2m nest egg to draw upon in retirement. With a conservative 3% withdrawal rate, that is 60 k per year in addition to your pension. Given that your expenses seem very reasonable, your expenses could be covered by either your pension or your portfolio, which is a great financial position to be in.

If you could up your savings to 50k per year, then you would have a bigger nest egg, which will also give you the additional option of buying a house if you decide to do so at the time at the same time preserving a good-sized portfolio.

I have assumed a 3% real return in my calculations, so you could potentially take less risk by adding some bonds to your portfolio or using ETFs that contain bonds such as XBAL or ZBAL. If you are comfortable with the stock market risk, then you could keep investing in XIC and XAW. I believe MAW104 has some bonds already.
 

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Discussion Starter #4 (Edited)
Off the top of my head.

You already admit the cash is far too high, and timing the market is tough, and if you examine the Canadian market year-to-date, I see the Financial sector down -20%, Telecom sector down -15%, Energy sector down -50%, Consumer Discretionary down -12%, but you want to wait until the end of the year to deploy that cash? Those vaccines look fairly promising, and as soon as it's a go, watch out.

A Defined Benefit pension of $68,241 per year seems to me to be a bit better than a tip - I guess you're telling us it isn't near fully funded?

ltr
I recognize what you're saying about the Canadian market. I will try to dollar cost average some investments. I understand my cash amount is unproductive.

The pension plan I belong to is in decent shape, relative to other large gov't pension funds. I just have no confidence that it will be there in it's current form in 20 years the way things are going with pension plan short falls and government deficits. I think the current projections, without a corresponding rise in contributions, is unlikely.

I've also been one who plans for worst case scenarios.
 

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Discussion Starter #5
Congrats! You seem to be in good shape for your goal. You have not mentioned how much you will be saving going forward, but if you save at least 20k per year for the next 19 years, you will have a 2m nest egg to draw upon in retirement. With a conservative 3% withdrawal rate, that is 60 k per year in addition to your pension. Given that your expenses seem very reasonable, your expenses could be covered by either your pension or your portfolio, which is a great financial position to be in.

If you could up your savings to 50k per year, then you would have a bigger nest egg, which will also give you the additional option of buying a house if you decide to do so at the time at the same time preserving a good-sized portfolio.

I have assumed a 3% real return in my calculations, so you could potentially take less risk by adding some bonds to your portfolio or using ETFs that contain bonds such as XBAL or ZBAL. If you are comfortable with the stock market risk, then you could keep investing in XIC and XAW. I believe MAW104 has some bonds already.
Thanks for your comments.

I currently save between $35,000-$40,000 of my income annually, I forsee that number going up.

I have no interest in real estate, and firmly believe I never will. The thought of being tied down to a piece of property petrifies me. I like the comfort in knowing I could leave town tomorrow if I had to. I've moved around a lot so far in my career, as I get bored pretty easily.

My dream retirement would be spending 6 months in Canada, and another 6 months during the winter months somewhere else in a different country or region of the U.S every year, renting and exploring.
 

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Discussion Starter #7
Question for others:

Do you keep your finances separate from your spouse?

My common law wife has lots of TFSA room and RRSP room. I could theoretically contribute to hers as I have no room left in my registered accounts. That would be tax advantageous. We've been together for 10 years, and I dont forsee us separating, however.....I'm a pretty cautious person and have seen too many people part ways and then have issues with the intertwined finances....
 

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Discussion Starter #8
August 29, 2020 update

Assets

RRSP - $231,654.13
TSFA - $100,605.77
Non Registered - $154,475.92

Cash - $294,366.99

Current value of DB pension - $133,894

Vehicle - $7,500

Liabilities

Rent - $914.375

Cable/Internet - $200

Total Net Worth = $921,382.43
 

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I am 59 and thought the same think in regards to retiring early, age 60 was the plan but after being off work for 5 months due to COVID I am having second thoughts. I am looking forward to going back to work, go figure.
 

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Discussion Starter #11
With the economic downturn have you found it easier to negotiate on your annual lease for your home?
Yes. When we renewed our lease in May, we received one free month included for our next 12 months.

We pay our rent on time every month, never cause any problems, and rent the more expensive 3 bedroom apartment layout that seems to be difficult for the management company to fully lease in this building.

When the lease expires next year I will be seeking another free month included. If we moved out, it's likely the suite would sit empty for a few months, meaning much more lost revenue for the rental company. I'm happy to point that out to the leasing people.
 

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My dream retirement would be spending 6 months in Canada, and another 6 months during the winter months somewhere else in a different country or region of the U.S every year, renting and exploring.
That's similar to what we're working towards too. We appreciate all that Vancouver offers but wouldn't mind spending some time away to get away from the rain during the winter along with some other trips all over the place while keeping our provincial health benefits. Looking forward to eventually having enough time to do a month long rental somewhere and fully exploring the area.

Do you keep your finances separate from your spouse?
We do a split with an equal contribution from our incomes going to a joint chequing account for standard expenses while maintaining our own savings accounts that we used to fund our own savings and investments along with the rare purchases/spends that we don't think should be funded from the joint account.
 
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