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Discussion Starter #241
On 1., this is a good point. I am working on some side business ideas. If they develop into something sustainable, I will look into such DI prior to leaving my current employment.
You might even want to apply and lock in non-cancellable DI before you go too far down that route. The reason is that (as I understand insurance) there is an obligation to disclose material information to the insurer. If you were on the brink of quitting your job any moment, I think it might be dishonest to get DI at that point - or you should at least disclose the intention.

On the other hand, getting DI well in advance, back when you are still in the 'regular employee mode' seems perfectly honest. Again make sure it's non-cancellable and beware of the categories like 'any occupation' vs 'own occupation'.

The other downside is that you have less 'pension' income due to lack of CPP contributions. That gives you more sequence of return and rate of return risk. You seem to be quite a saver, so maybe not a problem, but something to consider.
You're absolutely right, and if I remain on this track, I will end up with less CPP than most Canadians. I'm glad you reminded me. Missing out on CPP is a pretty unfortunate consequence of reducing or stopping my employment income.

Do you think it's possible the government may let Canadians buy into the CPP, contributing extra? On my current track, I might not get anywhere close to 100% CPP, unless I go back to a regular office job for a few more years.
 

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You can pay yourself a salary from your holding company, instead of dividends, to contribute to CPP. Of course, you should dividend any Canadian dividends you receive.
 

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Discussion Starter #243
You can pay yourself a salary from your holding company, instead of dividends, to contribute to CPP. Of course, you should dividend any Canadian dividends you receive.
This is an interesting idea. I don't have a corporation right now, but if my business picks up over time, this would be a good option.

Another idea might be to buy an annuity, but it seems to me that the CPP is a better deal than an annuity. Are they even in the same ballpark?
 

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I raised the same question as well as I stopped contributing to CPP in my 40s. Everyone says....who cares, it’s your your own money that you’re getting back from CPP.

do we know how much the average Canadian contributes to CPP during their lifetime and what the average Canadian earns form CPP? Would love to see some numbers And now the savings/investment return looks.
 

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Discussion Starter #245
I raised the same question as well as I stopped contributing to CPP in my 40s. Everyone says....who cares, it’s your your own money that you’re getting back from CPP.

do we know how much the average Canadian contributes to CPP during their lifetime and what the average Canadian earns form CPP? Would love to see some numbers And now the savings/investment return looks.
It's true that you're getting your own money back, and it's true that you can (in theory) get the same effect by investing your own money. So one could argue that you and I are not "missing out" on the CPP in monetary terms.

But I still wish I could buy into the CPP and convert my $ into a pension.

I think there's a big advantage to having a federal pension which holds some of your money. You can mismanage your finances, fail to save, or even have disasters in life (beyond your control). No matter what, the $ that goes into the CPP stays in there until you're 60 years old.

The CPP is government backed and firewalled. Your CPP is unaffected by personal bankruptcy. It's unaffected by relatives who are begging for money, perhaps pleading with you (or maybe harassing you) to hand over money. My ex girlfriend had a good income as a professional, but was constantly sharing her income with all her family members, who needed help for various reasons. She will work for 30 years and maybe have nothing left for herself.

My aunt is another person who has been unable to save money. She's made terrible investments on her own, and just not managed her finances well. But she did work, and pay into the CPP. Thank goodness!

Overall I really like what the CPP does. Yes you absolutely can save money yourself, to replicate the future cash payout. But we can't replicate the protection and firewalling.

The annuity is the only alternative I can think of, that has some of these nice characteristics.
 

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Another idea might be to buy an annuity, but it seems to me that the CPP is a better deal than an annuity. Are they even in the same ballpark?
One important difference between annuities and CPP is that the latter is indexed to inflation, which in the long run is very important. Another difference, as you have mentioned, is the implicit guarantee by the federal government for the CPP, which does not exist for an annuity.
 

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Discussion Starter #247
Things are "getting real" now... so it's a bit exciting and also a bit frightening.

I've moved to BC and, setting up my new household, there are a variety of new expenses. I expected this, but it's still a big spike in expenses. Monitoring my 'trailing 12 months' of spending will be even more important in the coming months.

At the same time, my low level of self-employment income continues. Managing my cashflow will be important for the rest of this year. I also expect to partially live off my investments (withdrawal mode).
 

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Discussion Starter #249
Welcome to Vancouver.
Thanks! And happy Canada Day!

The only thing that makes me nervous is the possibility of another shutdown / shortages due to COVID. There are still a lot of essentials I don't have and I'm going to need to get a bunch of stuff from Ikea, Home Depot, Best Buy (for business) and many other places.

Question for BC people: how likely do you think it is that retail stores will shut down again? The province may not consider Canadian Tire, Ikea, or electronics stores to be "essential services", but as a guy sitting in a mostly empty apartment who's still setting up my home & office, these things are essential for me.

I'm trying to prioritize the most essential things (work desk and vital computer equipment) but I have a long way to go. I normally don't like rushing my shopping, but I wonder if I should hurry before more closures come in Sept/Oct?
 

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Dr Henry has said the plan is go slow in order to prevent the province from having to take a step back. So ideally, stores won't have to shut down going forward. In fact, I don't think normal retail stores were under any original health order to close down. The retail outlets just made the decision themselves to close up shop for a few weeks. I don't think online shopping and delivery/pick-up was impacted.
That said, if things really flare up again, I can see province re-enact restrictions that indirectly impact retail operations. I'm cautiously optimistic the province won't take a step back though.
 

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Discussion Starter #251
Spending update
Total spent in last 12 months: $29,089

I'm now getting back to normal spending patterns so this number will increase. My annual expense budget has been 38K since 2017 and I'm continuing to stick with this level.
 
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