Who here has achieved early retirement, or working towards it?

[WetSeeker]

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.

I am saying the pension plan is far in excess of the total compensation and teacher contribution. I discounted $ for the teacher portion - the reality is that the board contribution is a limit on pension funding - any shortfall and all risk must be absorbed by the pension plan (e.g. taxpayer).

The OTPP has done a very good job investing dollars funded by teachers and by the taxpayer. No one on their own with a 9% contribution could fund a pension that matches the teacher plan. The reason is that RRSP contributions can only go to 18% of earned income. If inflation increases even 1% watch out - then you will see a problem with unfunded liabilities. There are bankrupt pension plans in the US and Europe.

To protect the public, the Ontario government should immediately move to a defined contribution plan for all public sector workers and grandfather all teachers and OPSEU workers up to the point of transfer to the DCPP. It is being done in the private sector - why not the public sector.

Btw public sector pensions paid out now exceed the total pensions paid for the entire private sector despite being less than 1/4 the private sector workforce.
The time to change things is now.

 

[benstt]

I am saying the pension plan is far in excess of the total compensation and teacher contribution.

Are you an actuary? This is what they do when they assess whether the pension is properly funded - determine whether the contributions are sufficient to meet future obligations. I think most non-actuaries miss the mortality effect in their assessments of present value.

 

[WetSeeker]

Are you an actuary? This is what they do when they assess whether the pension is properly funded - determine whether the contributions are sufficient to meet future obligations. I think most non-actuaries miss the mortality effect in their assessments of present value.

I am not an actuary, and understand the impact of mortality on reducing the future liability for a pension plan. The one big wild card is inflation. With current and retired teachers, and most government workers, the contract is for an indexed pension for life, which could start at age 55. Clearly retirement could extend to even 95 although 85 is a reasonable average. 30 years. The impact of inflation cannot be underestimated. Over decades the impact on real return (return less inflation) means that the funding will be impacted.
If we assume equity like returns of 6% and inflation at 2% you have a 4% real return. If inflation changes to 3% then the real return is cut by 25%. It is a significant risk.
The pension plans are invested long-term to try to achieve that 6% # and exceed when possible to build up reserves.

The potential risk is to both pensioners and taxpayers. How will the government deal with it? Will they use the PIGS approach and cut pension benefits? Will the public tolerate indexed pensions when government programs are being cut due to rising interest rates and massive debt? Will foreign bondholders be willing to fund governments who are not managing costs. Think of Germany funding bonds for the PIGS. How will that impact the currency, inflation and domestic interest rates? These are all related and government must plan. If you think the pandemic was bad for the economy, think of the trillions of dollars in future government programs around the world.

Government should immediately cease all Defined Benefit programs and replace with Defined Contribution programs. The investment risk will be entirely borne by employees and not the taxpayer. There could still be a sharing of the benefit cost. Most private sector plans match up to 4 or 5%. Not 9% matching. The more the government can do to stabilize the balance sheet the better.

The budget does not balance itself.

 

[poker]

I am fucked....


Got divorced 4 years ago. Lost everything... partly because I made some really bad decissions out of spite...

However... I am 50, and I'm basically starting over. I am considering a job up North on a 2 year contract as they pay well, and provide a place to live. You end up saving a good portion your pay chq's if your smart.

I was kind of going back and forth on that decision, but after reading this thread, I have to do something. And getting some quick money to invest seems like the best option I have at the moment.

 

[benstt]

I am not an actuary, and understand the impact of mortality on reducing the future liability for a pension plan. The one big wild card is inflation. With current and retired teachers, and most government workers, the contract is for an indexed pension for life, which could start at age 55. Clearly retirement could extend to even 95 although 85 is a reasonable average. 30 years. The impact of inflation cannot be underestimated. Over decades the impact on real return (return less inflation) means that the funding will be impacted.
If we assume equity like returns of 6% and inflation at 2% you have a 4% real return. If inflation changes to 3% then the real return is cut by 25%. It is a significant risk.
The pension plans are invested long-term to try to achieve that 6% # and exceed when possible to build up reserves.

You think actuaries are unaware of inflation or something? The teachers pension took measures to cap indexing depending on funding status to manage the risk. You keep saying that the future streams are not sustainable based on the contributions, but I don't think you are in a position to properly value that. Yeah, DB pensions have funding risks, but this is a well managed one.

I'm kinda done saying the same thing over and over. Take 19% of your gross total comp, year in year out, invest it with the savvy of a pro investor. Enjoy a good retirement.

 

[rogerdodger]

I am fucked....


Got divorced 4 years ago. Lost everything... partly because I made some really bad decissions out of spite...

However... I am 50, and I'm basically starting over. I am considering a job up North on a 2 year contract as they pay well, and provide a place to live. You end up saving a good portion your pay chq's if your smart.

I was kind of going back and forth on that decision, but after reading this thread, I have to do something. And getting some quick money to invest seems like the best option I have at the moment.

My well off neighbour got married to a woman 15 years younger. She had zero equity. The day she moved in her beat up car died in the driveway and it was towed away. Replaced by a $100K SUV. The marriage lasted 3 years. She walked away with a cool Million. I still can't comprehend how a judge figured she was entitled to that much money after 3 years. It seems however , that was her plan from the start. That's a good start on a retirement fund and I can't think of any job that would put that much money away in three years. Kinda like winniing the lottery.

I reckon my retirement budget, with hobbying exepnses at $2,000/month or $24,000/year - would be a minimum of $100K/year but throw in some travel and entertainment living and it's closer to $150,000/year after tax. Fortunately I can do that as I was able to build my business over the past 25 years. Inflation is a bitch however and that needs to be factored in . $100,000 of buying power becomes about $149,000 after 20 years at 2% .

 

[Mishman527]

thanks for the info. I forgot about inflation. I have never run the number that far but with my current lifestyle which is most likely no where similar to other people living off 40k a year is excessive for me. I would most likely reinvest anything unused. I understand the math but when I look at the cost of my life now and as I grow older will spend less it doesnt compute. I guess the proof will be in the pudding and time will tell.



thats also part of the plan

Thailand isn't easy to move to anymore

 

[angrymime666]

Thailand isn't easy to move to anymore

with covid it has made things more difficult since you need to quarantine at an approved hotel. plus they will more than likely expect proof of vaccination.

otherwise you can get a retirment visa if you are over fifty or a study visa which are good for a year.

to become a permanent resident is impossible.

living in thailand isnt as hard as you think as long as your can show you have the finances to support yourself as per their guidelines.

 

[NotADcotor]

to become a permanent resident is impossible.

Doesn't a retirement visa pretty much mean permanent resident.

Lots of options. Philippines. Malaysia, Sri Lanka, Ecuador, Costa Rica, Panama and a few other places in the region. Belize although Ice T seems to hate the place chanting "Fuck the Belize in his song cop killer. Maybe some of these countries stopped the programs I haven't checked recently but they do seem to last for a while.
Japan gives you PR after 5 years [be a student, teach English] but it's more expensive to live there and it has huge long term problems.

 

[angrymime666]

Doesn't a retirement visa pretty much mean permanent resident.

Lots of options. Philippines. Malaysia, Sri Lanka, Ecuador, Costa Rica, Panama and a few other places in the region. Belize although Ice T seems to hate the place chanting "Fuck the Belize in his song cop killer. Maybe some of these countries stopped the programs I haven't checked recently but they do seem to last for a while.
Japan gives you PR after 5 years [be a student, teach English] but it's more expensive to live there and it has huge long term problems.

sorry made a mistake. citizenship.

all I know is that you have to renew yearly the retirement visa. even if you marry a thai you still have to apply for a visa. a farang will never become legal citizen of thailand.

Im looking at philipines, malaysia, mexico, columbia, uruguay . anywhere that has a low cost of living and warm weather. some of them offer some type of citizenship program through donation, investment and real estate.

 

[NotADcotor]

Im looking at philipines, malaysia, mexico, columbia, uruguay . anywhere that has a low cost of living and warm weather. some of them offer some type of citizenship program through donation, investment and real estate.

As long as they don't boot you out, citizenship is perhaps overrated.

Also when you get real old, medical care might be on the list. Sure you can fly out or pick the best of the best hospitals if you see something come up but when you keel over of a heart attack or stroke you really are not in a position to make a decision... assuming even that your pockets haven't been picked clean which in some of these places is a real possibility.

 

[angrymime666]

As long as they don't boot you out, citizenship is perhaps overrated.

Also when you get real old, medical care might be on the list. Sure you can fly out or pick the best of the best hospitals if you see something come up but when you keel over of a heart attack or stroke you really are not in a position to make a decision... assuming even that your pockets haven't been picked clean which in some of these places is a real possibility.

Im proactive when it comes to planning on where Im going to retire. lots of web research, then some physical reconaissance to the area for short duration. after narrowing down the area more longer term stays. finally if everything goes well and passes the sniff test perhaps living there fulltime.

as I get older access to certtain ammenities(health care) has become more important.

 

[rogerdodger]

Im proactive when it comes to planning on where Im going to retire. lots of web research, then some physical reconaissance to the area for short duration. after narrowing down the area more longer term stays. finally if everything goes well and passes the sniff test perhaps living there fulltime.

as I get older access to certtain ammenities(health care) has become more important.

Interesting. What places do you like so far ? I met a Canadian guy - retired - living on the cheap in Cabarete on the north shore of the Dominican Republic. His big advantage was he spoke fluent Spanish and was able to get a condo for $250/month all utilities , cable and internet included. Cabarete much nicer than Sosua 20 minutes down the road . I think he said his budget was around $1000 Canadian per month. That's pretty chep but he's able to haggle like a local .

 

[angrymime666]

Interesting. What places do you like so far ? I met a Canadian guy - retired - living on the cheap in Cabarete on the north shore of the Dominican Republic. His big advantage was he spoke fluent Spanish and was able to get a condo for $250/month all utilities , cable and internet included. Cabarete much nicer than Sosua 20 minutes down the road . I think he said his budget was around $1000 Canadian per month. That's pretty chep but he's able to haggle like a local .

Ive been eyeing a couple countries. I look at technology, health care, cost of living, quality of women or pooning, and climate. I havent explored all the countries that I am about to list nor is it set in stone since there are so many coountries that could be a desintation. perhaps spending half a year in one and the rest bacl in canada or fulltime.

so far, thailand, philiopines, mexico, columbia,. asian and south america countries more than likely. non western countries where english is widely spoken" im learning speanish and have no issue learning another language.

if you arent fancy a lot of the countries I listed you can get that condo for 400-500 per month. this would be in a good sized city with ammenties. when I say fancy I mean fancy. what I am talking about is a modern condo furnished. you can go cheaper if you want. the further you go from the city centre the cheaper it gets.

I watch youtube all the time about expats and their experiences.

it really depends on how fancy and how much fun you want to have. throw in drinking at bars and pooning you can easily blow your budget.

 

[Robert Mugabe]

Don't really plan on retiring. However, if I did, I have set myself up nicely for living on a park bench. So all going according to plan.

 

[Robert Mugabe]

.

so far, thailand, philiopines, mexico, columbia,. asian and south america countries more than likely. non western countries where english is widely spoken" im learning speanish and have no issue learning another language.

Are you sure about that? lol. Better stick to miming.

 

[ActionJ]

I think I can retire and live a modest life now. But my boss just gave me a decent pay increase, so I'll milk it for a couple of yrs.

 

[angrymime666]

I think I can retire and live a modest life now. But my boss just gave me a decent pay increase, so I'll milk it for a couple of yrs.

Im all for working if you like your job and you dont have any other plans. I actually currently like my job. its when you get the itch and being able to scratch it without concern.

its all about doing what you want to do versus what you have to or forced to do.

 

[Grist]

Retired at 57. Could have earned a fortune had I kept working. But prefer the stress free existence of a week of Sundays.

 

[Ponderling]

Another site I frequent is Canadian Money Forum. Lots of chatter, but good sections with folks to sound out early retirement and their experiences along that path.