The above (in bold) tells more of the story then everything else. How much your annual savings must be if a measly $6000 of TFSA room lead you to stop contributing to RRSP
Who here has achieved early retirement, or working towards it?
- Thread starter desert monk
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One reason why I decided to stop making contributions to my RRSP was not wanting a huge tax bill year after year when I start to draw them down. Also, not sure if or how much my OAP would be clawed back due to what the government calls " too much income". The good old Robin Hood syndrome.The above (in bold) tells more of the story then everything else. How much your annual savings must be if a measly $6000 of TFSA room lead you to stop contributing to RRSP
Yep, this is a valid reason for not contributing to RRSP. I was just surprised that it had something to do with introducing TFSA. If anything, introducing TFSA should make you to increase RRSP contributions since gains from TFSA is not income, and, therefore, your future taxable income becomes lower.
What is retirement? Do nothing, do a few things, do things here and there? I have seen some people that do nothing or do little when they stop work. I am not retired yet, and I spend several hours a day checking things out on the stock market. I do not think that I will ever stop doing this even when I have stopped regular work. With this I can occupy my time and my mind as well as make extra income. ( which we all need as a security blanket going into the future ) I have memories of my younger days before the internet when I saw old geezers that shuffle around the streets with nothing to do, no place to go.. There will be many versions of that old geezer in the 21st century. What makes a comfortable life and retirement is choice.
Retirement is leaving/stopping regular work.
What you describe are hobbies not set work times for a set amount of pay.
I wish I knew this early on when I graduated from university. I worked long hours in the capital markets industry throughout my career. Worked in NY and London. The money was good, but the more you make, the more expensive the cars and vacations. We all know this hobby is expensive as well. The pension was crap. Better than not having one, but not enough to retire on without substantial RRSPs, TFSA, and other investments.
if I were to do it all again, I would have gotten a government job with less stress and retire at 55. Maybe have a side gig doing something liked and parlay that into a business upon retirement.
so what you are saying without 4 kids for example I would have been at least 1 mil richer?
So, just not spending all you made and saving is not an option for the do-over?
Saving is definitely a requirement for anyone without a govt pension.
You can see from the discussion above posters are debating how much a million bucks will last. Imagine being a teacher at 55 with the equivalent of 1.2 - 1.5 million in your pension that will pay you a pension the rest of your life. BUT as a teacher, you didn’t actually put in the $1.5m. It’s what is required to pay your pension and it’s the taxpayer who foots the bill if there is a deficit.
Most of us in the private sector has to worry about whether we have set aside enough to retire, often 10+ years later than a govt employee.
If you retire from govt services at age 55, you have your best years ahead of you to travel, to start a new business, or to continue to work and “double dip” in the system. Those in the private sector do not have these options.
This is true, without pension and any income except for the job you retire, savings should a must have, otherwise you will have some big financial problems during your retirement. To avoid reaching this point, I got helped by a pensions advisor from https://www.hensoncrisp.com/. I don't wanna wake up one day, when I am 66, and have no money for food or pay the electricity, this is way is good to be secure when you retire, especially if you have no kids who can support you financially, when you are not able to go to work anymore.
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I don't work, I choose to live a low enough lifesyle to be able to do so.
Don't smoke, don't drink, don't like concerts, travel is meh beyond the odd road strip. I download my Kdramas, trips to the book suppository, very rare escort visits, live in small town reasonably close to a big one. Trying to cut out eating for completely. Gym when covid reopens. If I can't fix things with the ex I'll probably brush myself off and get back on the whores but I am not willing to bust my ass to bust my nut more often. Might take up learning languages if I get the courage.
40K a year after tax. Damn I'd be ballin at that rate even if I didn't live rent and mortgage free.
Don't smoke, don't drink, don't like concerts, travel is meh beyond the odd road strip. I download my Kdramas, trips to the book suppository, very rare escort visits, live in small town reasonably close to a big one. Trying to cut out eating for completely. Gym when covid reopens. If I can't fix things with the ex I'll probably brush myself off and get back on the whores but I am not willing to bust my ass to bust my nut more often. Might take up learning languages if I get the courage.
40K a year after tax. Damn I'd be ballin at that rate even if I didn't live rent and mortgage free.
Much like my personal lord and savior Wally from Dilbert. I aim for work life balance. Don't work, don't have a life. Perfect balance.
There are 44,000 Ontario school board employees being paid a salary of $100,000 or more.
TDSB alone has 3,400 employees on the list. Most can retire at 55 when their age and years of service = 85
So think about this - make $120,000 last few years of teaching. Get paid a pension using your best earning years.
Get paid a pension at 55 for 30 years at 2% per year. So 60% of $120,000 = $72,000 will add up to $1.5 million to $2.0 million depending on longevity.
From 55 to 65 the boards will pay out about $10,000 in what is called a bridge to retirement so they don't suffer. The rest $62,000 is paid for life.
Both pensions are indexed about 2% per year. At age 85 the average teacher will have likely collected more in pensions than in employment considering the cost of living adjustments.
So when teachers complain about working 40 weeks a year etc think about the 30+ years of deferred pay in the form of taxpayer paid pensions.
They actually ALL make well over $100,000 a year when you include salary, benefits and pensions.
Before any teachers suggest working as a teacher, try working in a job that has few benefits, no security, no pension and lower pay. That is what most parents experience. They should all thank their lucky stars the government has never had any backbone. The teachers put in 20% of the costs and left the taxpayer fund the 80% it is all about the students after all. That is why classroom funding is poor and fundraising is needed - all the money goes to overhead.
Ok I will get off my soapbox, they need to stop the pensions for all public sector employees.
TDSB alone has 3,400 employees on the list. Most can retire at 55 when their age and years of service = 85
So think about this - make $120,000 last few years of teaching. Get paid a pension using your best earning years.
Get paid a pension at 55 for 30 years at 2% per year. So 60% of $120,000 = $72,000 will add up to $1.5 million to $2.0 million depending on longevity.
From 55 to 65 the boards will pay out about $10,000 in what is called a bridge to retirement so they don't suffer. The rest $62,000 is paid for life.
Both pensions are indexed about 2% per year. At age 85 the average teacher will have likely collected more in pensions than in employment considering the cost of living adjustments.
So when teachers complain about working 40 weeks a year etc think about the 30+ years of deferred pay in the form of taxpayer paid pensions.
They actually ALL make well over $100,000 a year when you include salary, benefits and pensions.
Before any teachers suggest working as a teacher, try working in a job that has few benefits, no security, no pension and lower pay. That is what most parents experience. They should all thank their lucky stars the government has never had any backbone. The teachers put in 20% of the costs and left the taxpayer fund the 80% it is all about the students after all. That is why classroom funding is poor and fundraising is needed - all the money goes to overhead.
Ok I will get off my soapbox, they need to stop the pensions for all public sector employees.
I couldnt agree with you more. highly overpaid baby sitters.
I hope that with the continued use of e learning that they cut teachers jobs. unionized positions are highly overpaid especially when related to government employment.
Agree here. Most teachers are just babysitters. However, the Ontario curriculum and lack of wiliness to segregate students into "good" and "bad" and have different schools for different type of students based on students' desire to lean and their academic interests play an important role why most teachers are so bad.
Did you know that the US has over $148 Trillion in unfunded liabilities? Those are mainly for public sector pensions that will have to be paid out in the future. These defined benefit pensions are a huge scam. It's a way of giving a raise to public sector workers without raising taxes in the short term, as future taxpayers are on the hook for the pensions.
The "public sector" is just one massive wealth transfer scam. It's a pillar of the socialist state, the precursor to communism.
I was curious about this. As long as the teachers plan is well funded, you can just look at the pension contributions to determine total comp.
A teacher making $65K will contribute $6.8K of that to the pension. The boards match their contribution, so you could argue their total comp including pension is about $72K that year.
I saw an article where the average salary is $83.5. The pension contributions will then be about $9K. That means their total comp is about $93K on average, with $18K of that being set aside for future pension obligations (about 19%). Add on medical, etc for full total comp, but you get the idea.
The point is how many are diligent enough to set aside 19% of their total comp every year, year in year out? That is the real story there.
Total comp is base salary plus benefits plus board pension contributions.I was curious about this. As long as the teachers plan is well funded, you can just look at the pension contributions to determine total comp.
A teacher making $65K will contribute $6.8K of that to the pension. The boards match their contribution, so you could argue their total comp including pension is about $72K that year.
I saw an article where the average salary is $83.5. The pension contributions will then be about $9K. That means their total comp is about $93K on average, with $18K of that being set aside for future pension obligations (about 19%). Add on medical, etc for full total comp, but you get the idea.
The point is how many are diligent enough to set aside 19% of their total comp every year, year in year out? That is the real story there.
In reality the TDSB average salary is over $85k with thousands in TDSB well over $100k - they are at the top of the grid after 10 years.
Benefits another $5k (top line full coverage for everything from orthotics to massage to psychological counselling)
The pension is the real kicker. It amounts to 2% for each year of service. Indexed for life. Starting age could be 55.
Teachers put in 10% at most, but the board is obligated to match that and the OTPP pension is based on the "BEST 5 years" 100% back loaded.
Not career average using contributions. Best 5. So a teacher typically will boost their income the last five years to max the lifetime pension.
Teachers also continue to receive benefits during retirement which is not included.
If you discount out the normal expected income from a teacher's $9k contribution the board compensation is closer to $35,000 annually on the pension alone.
Total compensation would therefore average about $135- $140,000 for an average teacher.
So add up the math:
Base $85k average
Benefits $5k average
Board pension contribution $9k average
Subtotal $99k
Present value of pension for life discounted to inflation $50k year - assume retired 30 years.
Total comp including the teacher portion of the pension is $149k for each year worked for the average teacher that works 30 years.
In no way does ANYONE in the private sector have the ability to put aside $9k in an RRSP for 30 years of work and get a lifetime annuity for $50k+ indexed to inflation.
The rate of return would have to be near 20% annually.
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Are you arguing the pension is not properly funded? Otherwise the $9k x 2 = $18K per annum contribution is how much is set aside for the future pension stream, and is enough. You don't add an additional $50K to total comp - the $18K plus growth plus mortality benefits pays for the future $50K per year.
