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Hello all, 50 Years of age and No Savings. Looking for Advice.

4K views 25 replies 13 participants last post by  Cheeter 
#1 ·
Hi all,

I am a Special Needs EA in New Brunswick, I am now 50 and have no savings! :( I will not dwell on the past hence I can not change it, many mistakes were made and not all by myself personally, I am back home with Family helping my Mother with Failing Health of Father 89. I am Debt Free after much work, but I truly need help, if anyone can give me steps where I only make 32K a year working with my Exceptional Kids, I need to start saving now, and can use all the advice I can get.

Thanks so much,
Bill
 
#2 ·
Hi Bill, welcome to the forum, and congratulations for recognizing that you need to start saving. I myself was up to my eyeballs in debt not that long ago, and it's amazing what you can accomplish once you focus on a goal. I wouldn't call myself an expert by any means, but here are the questions I would ask you to start with: How much money do you think you will need to save in order to be able to retire? Do you plan to work until 65? Do you currently have a budget in place? If not, you should create one, and stick to it. Where can you cut some expenses? Is there any way for you to be promoted at work and make some more money? Are there jobs you can do on the weekends here and there to make some extra cash?

Generally, as far as saving goes, I would probably start stashing money away to invest in a TFSA, and then when that's maxed out, an RRSP, and when that's maxed out, a non registered account.
 
#8 ·
Hi Bill, welcome to the forum, and congratulations for recognizing that you need to start saving. I myself was up to my eyeballs in debt not that long ago, and it's amazing what you can accomplish once you focus on a goal. I wouldn't call myself an expert by any means, but here are the questions I would ask you to start with: How much money do you think you will need to save in order to be able to retire? Do you plan to work until 65? Do you currently have a budget in place? If not, you should create one, and stick to it. Where can you cut some expenses? Is there any way for you to be promoted at work and make some more money? Are there jobs you can do on the weekends here and there to make some extra cash?

Generally, as far as saving goes, I would probably start stashing money away to invest in a TFSA, and then when that's maxed out, an RRSP, and when that's maxed out, a non registered account.
Hi Fisherman,

Thank you for this, I am not totally sure what I will need but, due to Struggles though the years with Injury/Mental Health and other things, I would imagine my CPP at retirement will be on the low end so, I surely want to save what I can, not just for me but care of my Mom who is much younger than Dad. I would ideally like to retire at 65 yes indeed, I do have a Budget, after I completed it, I should have 1300-1500 a Month to Invest, will be tight but that is what needs to be done right now. Thank you for your ideas thus far, Cheers good sir! :)
 
#4 ·
Is 32K your take-home pay, or is that before taxes and deductions?

If you're taking home 32K you will have more flexibility than if you're taking home 25K or something.

What are your monthly expenses? Since you moved back home I'm going to assume your rent is small to non-existent. I suggest you write down every expense and total it all up at the end of each month. Keep every receipt and track every purchase. Knowing exactly what you're spending can be revealing. You can identify areas where you are overspending and figure out ways to cut back. Once you have a good idea of what you need to spend, you can figure out a budget and try to keep your spending at or below that level.

Your next order of business should be to save up an emergency fund (roughly 6 months of expenses). Put this money into a high interest savings account. Comparison chart

Once you've got your emergency fund set up, you can start putting your savings into investments that will grow. If you bring home 32K and can live on 22K (that's $1833/mo), that means you could invest the remaining 10K.

If you invested in a balanced fund averaging 5% growth per year, you would have $226,574 by age 65 or $347,192 by age 70. If you increased your income you could invest more... 15K per year would be $339,862 by age 65 or $520,788 by age 70.
 
#10 ·
Is 32K your take-home pay, or is that before taxes and deductions?

If you're taking home 32K you will have more flexibility than if you're taking home 25K or something.

What are your monthly expenses? Since you moved back home I'm going to assume your rent is small to non-existent. I suggest you write down every expense and total it all up at the end of each month. Keep every receipt and track every purchase. Knowing exactly what you're spending can be revealing. You can identify areas where you are overspending and figure out ways to cut back. Once you have a good idea of what you need to spend, you can figure out a budget and try to keep your spending at or below that level.

Your next order of business should be to save up an emergency fund (roughly 6 months of expenses). Put this money into a high interest savings account. Comparison chart

Once you've got your emergency fund set up, you can start putting your savings into investments that will grow. If you bring home 32K and can live on 22K (that's $1833/mo), that means you could invest the remaining 10K.

If you invested in a balanced fund averaging 5% growth per year, you would have $226,574 by age 65 or $347,192 by age 70. If you increased your income you could invest more... 15K per year would be $339,862 by age 65 or $520,788 by age 70.
Thank you so much for all of this, so kind!

I have done a heavy budget, I can afford between 1200-1500 depending on Month, I am saving now and will indeed save up the Emergency Fund first, and go from there with others options, like the TFSA and looking for the best yields within it. Thanks again. :)
 
#5 ·
I will keep this simple. Save as much money as you can. Stay away from RRSPs. There is no doubt that you will probably require, and be eligible for, Guaranteed Income Supplement (GIS) and RRSP withdrawals later will reduce your benefit amounts under that government program. Use Tax Free Savings Accounts (TFSA) for all your savings.

The easiest way to save is through automatic monthly withdrawal from your bank account . Start with an amount you think you can continue and then try to increase it each year until it really starts to hurt. It is a way of saving where it becomes automatic and therefore becomes separate from what remains available for spending. You can automatic deposit into balanced mutual funds or probably any TFSA. Just ask your bank about it.
 
#17 · (Edited)
Save 10% religiously every month. It should come off just as your other payroll deductions. Put all into a TFSA account. If possible open a discount brokerage TFSA with a bank or CU. Given your situation I would put all of these funds toward dividend paying stocks. Given your situation buy one of the Canadian dividend ETFs iShares or Vanguard products are probably a good bet. With luck you might have accumulated 150- 200k by age 65. With that you should be able to supplement your OAS/ CPP with 700 or 1000 dollars per month if you are careful with your drawdowns. At that stage given your situation you might look at buying an annuity . It has some drawbacks but one clear benefit is you would be receiving a guaranteed payment every month like your CPP. Don't try to swing for the fences with some fad such as bitcoins or new high tech stock.Keep it simple and be focused and disciplined. Good luck .
 
#18 ·
Hiya Zin,

Thank you so much for the Advice, you all have been Awesome, I am meeting with my Bank next week, I have opened a High Interest Savings and have Auto payments going into it till I have 3 Months pay in there, then I will start with my TFSA and figure things out. :)
 
#19 ·
Set up an auto-transfer at your bank to automatically move money from your chequing account to an investment account, set the number a bit higher than you feel you can manage, and make it work. The money transferred is dead to you. If you find yourself thinking, "No problem, I can just transfer some back..." you will not succeed.

It's not easy. Nobody likes to live on less but it's doable.

You will end up losing friends who are always going for coffee, to movies, etc. You can't turn down an offer to go to an event too many times before people stop asking. Do your best to hang onto the friends you can and make sure you can go to the odd thing or there is no point to life. It won't be much, though.

You can do this. You will need to consider retiring on GIS and CPP in 10~15 years. It isn't going to take a ton of money to bump you up into a much higher level of retired life so your goals are not the same as an executive who is retiring.

Lastly, forget about RRSPs. They are not for you. You need to keep your declared income down so you can receive GIS. Use a TFSA, as per zinfit above. He is a very smart man. You will not out-save your ability to shelter money in a TFSA and that is OK.
 
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#23 ·
If you are a low income Canadian take your CPP as soon as possible.
What many fail to realize is that it is income and as such it will be deducted from your
GIS at a rate of 50%
Take it as soon as you can and start putting it in aTFSA.
When you want to take it out you probably will pay little income tax and no GIS deduction.
Money withdrawn from a TFSA is not taxable and neither is G I S,further more GIS is indexed.
You want to maximize it.
 
#24 ·
If you are a low income Canadian take your CPP as soon as possible.
What many fail to realize is that it is income and as such it will be deducted from your
GIS at a rate of 50%
Take it as soon as you can and start putting it in aTFSA.
When you want to take it out you probably will pay little income tax and no GIS deduction.
Money withdrawn from a TFSA is not taxable and neither is G I S,further more GIS is indexed.
You want to maximize it.
Hi Backer,

Thank you so much my friend, every bit of all your info is helping me, it is truly appreciated.
 
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