At age 40, how much should the average person have in their retirement account?

[poorboy]

I started putting away for my retirement at 20 years old, and now will have almost $200,000 squirrelled away at age 40. If I work to 60 years old, I will recieve a defined benefit pension equal to 50% of my income.

Am I saving enough? I live a modest life for the most part except for hobbying.

 

[nottyboi]

I started putting away for my retirement at 20 years old, and now will have almost $200,000 squirrelled away at age 40. If I work to 60 years old, I will recieve a defined benefit pension equal to 50% of my income.

Am I saving enough? I live a modest life for the most part except for hobbying.

Do you have any other assets? House?

 

[poorboy]

I have a townhouse I paid $300,000 for. I owe about $200,000. No other debts. I also have a classic car worth about $20,000.

 

[hinz]

I started putting away for my retirement at 20 years old, and now will have almost $200,000 squirrelled away at age 40. If I work to 60 years old, I will recieve a defined benefit pension equal to 50% of my income.

Am I saving enough? I live a modest life for the most part except for hobbying.

I have a townhouse I paid $300,000 for. I owe about $200,000. No other debts. I also have a classic car worth about $20,000.

Hmm....just wondering whether the bulk of your $200K is tax deferred or not.

If the bulk of your $200K is in saving account, earning essentially zero return, then how come you do not pay off your mortgage sooner??

Pay off your mortgage is your priority, not investing in the stock market. This is especially true when you have define benefit pension.

That being said, assuming your DB plan is a private one, or should I say you are not a government worker, you should protect yourself by maxing out TFSA and investing the contribution prudently, over time and that's after you paid off your mortgage. That's your Plan B just in case your DB plan gets belly up before you reach 60.

Again that's my 2 cents. Maybe you should get duang for advice or something.

 

[afterhours]

I started putting away for my retirement at 20 years old, and now will have almost $200,000 squirrelled away at age 40. If I work to 60 years old, I will recieve a defined benefit pension equal to 50% of my income.

Am I saving enough? I live a modest life for the most part except for hobbying.

if you live modestly now, you will need even less when you are older, so why worry

 

[poorboy]

if you live modestly now, you will need even less when you are older, so why worry

I'd like to live it up a little more when I get older. i.e. buy a 67 Corvette, travel, etc.

 

[middleweight]

I was thinking about this same thing yesterday. I want to retire in 20 years time when I am around 55. I figure an $800k pension pot should allow me to live, travel every year and hobby 3-4 times a month...living costs of around $3k a month. I am counting on a small inheritance at appx 65 years old with CPP/OAS to help me too! To help reach my goal, I max out my pension and RRSP ($20k) and max out the TFSA ($5K)...save some cash too and blow the rest on hobbying!

 

[james t kirk]

Maybe I'm crazy, but I have no intention to ever retire. At least not completely. Oh, if I'm still alive, there will come a day when I just am too old to work, but most guys who retire early just go to seed. I see them sitting around in Tim Hortons every day in every town with their other retired buddies bitching about the government. I don't want to do that.

I still have my RRSPs as I don't have the luxury of a pension (nor do I even want it to tell you the truth - for several reasons)

I certainly don't want to retire by 55. That's nuts.

My perfect world would be to work less. And by that, I don't mean working 4 days a week, or part time. I'd like to get to a point where I could work 8 months of the year full and take 4 months off. (Like a school teacher say - less grind). Either work 4 months and take 2 months off, or work 8 months and take 4 months off straight.

I've worked with dudes who have retired from the Gov't or some place with a pension (in my industry). They try working 4 days a week, but end up working stupid hours to get everything done in 4 days that would normally take 5 or 6. You can never get away from the pressure. That's why I'm aiming for 8 and 4 (God willing.)

 

[james t kirk]

I'd like to live it up a little more when I get older. i.e. buy a 67 Corvette, travel, etc.

You'd be best to buy that C2 now because the prices on them are only going to go further north than they already are.

 

[james t kirk]

But to answer the OP.

200 k at your age is pretty good and you're probably more responsible than 90 percent of the rest of the people at age 40, but realisitically, if you want to retire at 60 and figure you're going to live another 20 years - simple straight line math tells you if you want to "make" 50 grand a year when you are retired (not exactly "big time" in Toronto), then you need a million bucks in your RRSP by age 60. Yeah, you can add Canada Pension and all that, but it's not a lot.

I know Iknow, it's not a straight line thing, It's a geometrical series, blah blah blah. But I'm not about to break out my Grade 12 math text books.

For the ordinary guy to save up a million bucks - it is pretty tough.

If you put 20 grand away every year (not easy), for the next 20 years - that's 400 grand. Now the hardest fucking part - no econmic meltdowns that cut your RRSP in half. You might end up with a million bucks in your RRSP.

My worst nightmare is to end up in a home somewhere, sitting in soiled diapers all day with a drool bucket hanging around my neck, watching the TV with no volume and my savings being eaten up at an ever increasing rate to the point where I'm still alive, but my money is gone.

 

[K Douglas]

I think it all depends on how much professional development the individual has attained. I know that based on the investment in my education (2 undergraduate and 1 professional degree) my prime earning years will be from 40-50.

 

[lurkerdick]

Average 1-2million combined.

 

[nottyboi]

if you have a db plan you probably cannot contribute much in RRSPs. You would be best to really take a look at the DB plan. Personally I don't place too much stock in them. I think very few will be solvent in the not to distant future and will pay significantly less then they promise.

 

[poorboy]

The defined benefit plan is indexed and it is comparable to the Ontario Teachers as far as stability goes. Could it be chopped back? Yes, but highly unlikely or not by very much. Some years, I approach 6 digits in income, but that's working a lot of hours.

I have a Master's in Business, but unfortunately in my organization, seniority plays a big role (like the airline industry) and I was hired late. I have nothing in a TFSA. It's all in an RSP. Frankly, I don't see how I can save $1,000,000 by age 65. Max might be $750,000. $500,000 is more likely. I'll have about $40,000 a year in todays dollars coming in as well from the pension until I kick the bucket.

 

[Brandon123]

Your doing just fine, keep it up.

 

[djk]

In addition to RRSP and living frugally, my game plan is to acquire some rental property, pay down the mortgage with the rent, take the home equity, invest in something fixed income and eventually in 20 years or so, move to Latin America or Asia.

 

[TeasePlease]

The real question is how long do you expect to live after you retire?

Retirees outliving their savings is becoming a huge problem.

 

[capitalman]

I feel it's important to plan for the future, but also to enjoy some of what you have now. I've seen many relatives; my parents and grandparents, aunts and uncles, all die with money in their banks that they never enjoyed. They grew up in desperate times and squirreled away their savings and lived meagerly.....only to give their ancestors the money who squander it without respect. I plan to use up my money before I die.

 

[WoodPeckr]

Your doing just fine, keep it up.

+1

At that rate you will be just fine....

 

[james t kirk]

I feel it's important to plan for the future, but also to enjoy some of what you have now. I've seen many relatives; my parents and grandparents, aunts and uncles, all die with money in their banks that they never enjoyed. They grew up in desperate times and squirreled away their savings and lived meagerly.....only to give their ancestors the money who squander it without respect. I plan to use up my money before I die.

Ditto that.

The worst is the guy who was counting the days till he retires, then he dies 3 months after he retires and everything that he contributed to that pension plan goes back into the kitty.

The best plan is to die just as you spend your last nickel, but it's hard to do.