Saving for Retirement
I started saving for retirement again. Luckily I only lost 6 weeks, but even then … with all the savings goals I have this year, I don’t think I can make that time up. But anyway, starting this Friday I’ll be putting away $300 bi-weekly.
RRSPs
$50 Money Market
$50 CDN Bond Index
$50 European Index
$50 International Index
$25 CDN Index
$25 US Index
TFSA
$25 ING Direct (3%)
$25 PC Financial (2%)
According to the pay stub I received yesterday, I’ll be bringing in approximately $1,380 bi-weekly after taxes. So my Retirement Porfolio savings represents almost 22% of my net income. And based on the TD Canada Trust RRSP calculator at an average rate of return of 7%, if I keep saving at the rate I am, I can retire at age 55 (my goal retirement age) and will have $1.1 million in my Retirement Portfolio. That doesn’t even take into consideration the fact that I would increase my savings amount with any increase in salary over the years. So I’m feeling really good about the future, and I’m so glad that I took saving for my RRSPs seriously during my 20′s.
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Seeing that 1.1Million at age 55 must be so awesome! keep up the great savings!
Sadly, the TFSA rate @ ING just went down to 2%.
Exactly! Gotta maximize savings now while I don't have dependents to worry about. :) BF has a bit of catching up to do in terms of saving for retirement, but I think that his long term earning potential might be greater than mine.
It is good that you are saving $300 a month but i don't think that your mix of investments will average 7% over the long term. You have half of your investments in low interest rate products which will return about 2% (the mmf must be close to 0% return right now) and half in equity investments which may return about 8% long term. So, averaged together that would result in a 5% long term return. A strong canadian dollar might dent the returns of the US index, European, and Int'l index though.
The investments that are in low interest rate products are just for hold. I don't intend on keeping much in there for the long term – it's mostly for security for the next 1-3 years because I plan on utilizing the First Time Home Buyer's Plan. After that, I will be moving the majority of those funds into something more appropriate for long-term.
The investments that are in low interest rate products are just for hold. I don't intend on keeping much in there for the long term – it's mostly for security for the next 1-3 years because I plan on utilizing the First Time Home Buyer's Plan. After that, I will be moving the majority of those funds into something more appropriate for long-term.
It's great that you can do this so young!! And think if the BF is doing the same what it'll bring you to at 55!
Things may change with marriage and kids though (they are so darned expensive*L*)…so save now what you can! :)
Congrats on the job thing and being able to start saving again :)
Exactly! Gotta maximize savings now while I don't have dependents to worry about. :) BF has a bit of catching up to do in terms of saving for retirement, but I think that his long term earning potential might be greater than mine.
I'm just starting to think about RRSP's while I'm still paying off my debt and I have to be honest..I have no idea what those different RRSP's are under your heading, so I'm definitely going to have to talk to someone. lol
Thanks for the link to the TD calculator. Now I keep playing with my numbers. hahaha.
You are so organized. I wish I can do the same thing with my savings too. No wonder I can’t keep track.
You are so organized. I wish I can do the same thing with my savings too. No wonder I can't keep track.
SIMPLY AMAZING!.. I am 29 and just starting to save but thats unreal… you are well on your way!
SIMPLY AMAZING!.. I am 29 and just starting to save but thats unreal… you are well on your way!
thats insane – worry about your retirement once you have bought and paid off your first house. thats a better investment both in return and lifestyle than retirement savings will ever be.
I personally think that saving for retirement is more important than buying and paying off my first house. Because even if I rent for the rest of my life, I'm still going to need to retire. My view on real estate is – if I get my money back from what I've invested – then that's amazing. I don't expect any sort of return, and by thinking this way – I will still be saving enough for retirement. And if I happen to make money off of my properties? Then awesome. Maybe I can retire that much earlier.
I personally think that saving for retirement is more important than buying and paying off my first house. Because even if I rent for the rest of my life, I'm still going to need to retire. My view on real estate is – if I get my money back from what I've invested – then that's amazing. I don't expect any sort of return, and by thinking this way – I will still be saving enough for retirement. And if I happen to make money off of my properties? Then awesome. Maybe I can retire that much earlier.
I personally think that saving for retirement is more important than buying and paying off my first house. Because even if I rent for the rest of my life, I'm still going to need to retire. My view on real estate is – if I get my money back from what I've invested – then that's amazing. I don't expect any sort of return, and by thinking this way – I will still be saving enough for retirement. And if I happen to make money off of my properties? Then awesome. Maybe I can retire that much earlier.
A better return? A diversified portfolio of stocks or stock index funds is likely to have a superior return compared to real estate over the long term. In you live in a metro area and your primary motivation for buying a house is purely financial, then chances are you are buying for the wrong reasons. A person that has the discipline to save and invest on regular basis can come out much farther ahead as a renter, as this calculator shows:
http://www.nytimes.com/interactive/business/buy-r…