Shard

Exactement.

BristolUK

But isn't that where the planning comes in? That when it is time to have a part of it - enforced or otherwise - that one is in a position to make the most of it or at least be comfortable?

Of course you don't need to get tied up in knots.

It could be something as simple as knowing that depending on your housing situation you might do very nicely thank you on the $1400 a month minimum that OAS/GIS will provide.

My MIL, for example, gets above that minimum, but it still involves GIS so she gets her prescriptions for $9 each for three months worth. She's flush with cash. Probably never been so well off.

Jerseygirl

What exactly is retirement?

Retirement is doing whatever you want to do.

Linotype

How much is enough.
Interesting articles from a few years ago:

2013
How much money will you need to retire? - MoneySense


2014
How much money you need to retire

Tirytory

Would those retired agree with the figures? I think I've figured out that we need to keep some income streams so that you avoid touching much of your capital - property seems to be the best bet to do this.

I don't want to avoid having fun today to pay for tomorrow but I do want to have an active retirement too- that requires some plan of how it will happen..

not2old

from my post 26 below as well as taking into account your health & lifestyle choices


"CARP & other Provincial studies as follows...

How much do we really need?

(Source: Government of Ontario) for those in Ontario. Province by Province & lifestyle likely different

-How much pre-retirement income is needed to maintain lifestyle in retirement: 50-70%

- If you make $20,000 a year: Old Age Security (OAS) and CPP will likely maintain same lifestyle even without added savings.

- If you make $40,000 a year: On top of OAS and CPP, you would likely need an extra $11,795 a year to maintain standard of living.

- If you make $75,000 a year: On top of OAS and CPP you would likely need an extra $33,329 per year to maintain lifestyle.

(Source: Government of Ontario)"

Is your retirement income in the 50% - 70% range of what your income was before retirement - thats a personal question for each of us - how much do you personally need?

Likely Bristol's MIL income is higher now than before she retired

Its personal & down to each their own. I looked at several factors on retirement income needs. Based it on 'where should we live, the type of accommodation' (accommodation is a huge chunk of expenses), what we needed in income in total as well as for the rest of everything else without factoring it in as a percentage of my pre-retirement take home pay, given the wife hadn't worked since having the first child in 1978.

In retirement from September 2010 the expenses went way down, then living as frugal as we do we have money over each month after all expenses.

If we were to cruise or holiday abroad 2x, 3x a year, replace the vehicle with a newer expensive one every 3 years, remodel the house, replace the furniture & fixtures - then all our income would be spent.

We have a reserve fund (part of the income set to one side as a reserve) for any unusual costs such as repairs & fixes to the building or roof.

Like Bristol's MIL, we're getting by, no need to keep on saving for a rainy day

bats

Thank you. We will be ok once all our pensions are being paid to us but they are staggered over a few years, the last one will start being paid in 2023.
Recently I've seen a few friends diagnosed with nasty illnesses and another has died suddenly. It's made us take stock we'd rather have less income and enjoy the small stuff while we can.

BristolUK

I don't suppose this will apply to many folk on BE but it may have some relevance to people who don't "get many years in" by the time they hit 65.

Age 65 is when Canada will pay so even if the UK makes you wait a bit longer, Canada doesn't. I believe it changes from 2023.

Keeping it simple, you can get Old Age Security (OAS) if you've done 10 years or more in Canada. Full rate is $573 a month and 40 years will get that. Each year you've done counts as 1/40th so 10 years gets $143, 20/$286 and 30/$429.

As with RP in the UK you can get it while still working or not. No direct contribution is needed - you'll have paid in by taxation in the qualifying period.

So any Brits who lived in Canada for 10 years by the time they are 65 will get something regardless of employment and their own pensions from other sources, although there is some kind of clawback if your income is around $70k.

I haven't read anything that contradicts this.

If you have nothing else coming in you can qualify for Guaranteed Income Supplement (GIS). Unlike the OAS it's not done on a pro-rata basis.

The idea seems to be that with no other income, a combination of OAS and GIS is around $1400 monthly. Oddly, perhaps, it means that if you've not done the full 40 years, meaning you get less OAS, you get more GIS to maintain that $1400.

I actually read an article the other day about how this throws up the anomaly of those who have "put more time in" get the same $1400 and how it was viewed by some as unfair.

But someone who has put more time in is likely to have other sources of income and that's where potential gain lies.

Essentially, with a full 40 years you could get $573 OAS plus $856 GIS, total $1429 a month.

If you've only done 10 years it could be $143 OAS plus $1286 making the same $1429.

If you get CPP or other pension, for every $ you get, 50c comes off the GIS. So the more time in Canada the more likely you are to have CPP, for example, and you'll have more income in total.

You do have to apply for these payments, but essentially you can bank on a minimum of $143 a month for every 10 years in Canada, on top of anything else, assuming you don't have $70k income.

And you might get GIS of various amounts on top if other income is under $1700 monthly.

This is based on my reading. If anyone knows differently please say so.

not2old

@ post #53, an extremely informative post Bristol

A Brit chap I worked with will only have 30/40th years in Canada when he qualifies for OAS. He started collecting his CPP at 62 (reduced rate) its approx $400/mth

He has 35 paid in years of UK NIC

He calculated that its better not to collect UK state pension but to defer it till some future year. His wife is 5 years younger than he is

When he reaches 65, he will bonus by getting the Canadian Allowance for his wife + top up's from GIC for getting less OAS

His number for CPP, OAS, Allowance, GIS, GST + provincial top up's property tax credits will be at least $2800/mth in todays money

He is mortgage free, basic suburban lifestyle, both have maxed out TFSA's as well as (so he tells me) over $100k each in their RRSP's

Smart investment in the TFSA's earning 5%, draw bits that they need when they need it

They are just fine, till the day of reckoning when he draws his UK state pension after he turns 70, his wife then will be 65. She has 20 years of NIC at present

BristolUK

A couple of years ago I wondered that very point - deferring the UK RP. But now that I have read a bit more I'm not convinced that's wise.

Unless there's income of $70k the payment of RP doesn't affect the OAS. For every $ of RP he'd lose 50c of any GIS, so minimum gain is half what he'd get from his RP.

And the chances are the gain would be more. If he's done 35 years here, his OAS will be bigger, so the GIS element smaller.

Which means there's a smaller amount to lose with CPP and RP in payment.

I wonder if his calculation was based on losing $ for $ from OAS/GIS rather than 50c limited to just the GIS.

But maybe there's some other anomaly tucked away somewhere.

not2old

Bristol @ post #55

- He knows that his CPP is not the max & that his OAS is also only 30/40th

- That because their combined income when he turns 65, since qualification for Allowance,GIS & OAS top is based on their combined income. The only income will be CPP, plus any investment income & foreign income

- For the past 12 months or so they have been living on RRSP withdrawals & his CPP

- He wants to meltdown the RRSP's to where he no longer needs to do so when he reaches 65, then get the maximum from what all is available in Canada.

- He is deferring the UK pension till his wife turns 65. At that point they will both draw the state pension (her a bit later)

Then, the Canada OAS will be 100% for her, 75% for him. She will then draw whatever CPP is in her account (he reckons it will be approx $350/th), the UK state pension (since he deferred + she collects) will be over $2000/th

5 years from now the numbers basically look like this

In todays money- combined

OAS $450 (him) + $573(her) = $1073

CPP $400 (him) + $350 (her) = $750

UK both combined pensions (2021 rate) ~ $2000/mth

Provincial + HST top up's $250/Mth

~ $4073 income in 2021

+ income if they need it from their TFSA's which is invested untouched, compounded + added years $5500/yr each ($11,000 combined) x 5 years till 2021 = $55,000 added to their TFSA account

In 2012, their TFSA account should be close to $200,000 @ 5% return $10,000/yr or $833/th

Total, all income in the range of $4900 - $5200/mth

BristolUK

One extra thing about OAS for any widows/widowers.

You don't need to wait until 65, you can get it at 60.

not2old

You mean the 'Allowance for the Survivor' + CPP benefits (+ up to 60% of the dead persons CPP) + if there are children involved also

http://www.esdc.gc.ca/en/cpp/survivor_pension.page

in the following link

Allowance for the survivor aged 60-74

http://www.esdc.gc.ca/en/cpp/oas/all..._survivor.page

see Table 5:

Old Age Security pension recovery tax

Application

http://www.servicecanada.gc.ca/fi-if...p3008&lang=eng

.

not2old

No different than what you are doing today: income (from work or other sources) expenditures, save some, invest some, save for retirement

- At what age do you plan on retiring?

- Will it be at the point when you no longer have to provide for or support your children?

- On the basis that you are both healthy, living in Ontario or some place in Canada......maybe outside of Canada

- What will be your 'budgeted fixed monthly costs in retirement in todays dollars? Look at the big ticket items.

a) Rent/Mortgage/Property taxes
b) All utilities - include water, gas, hydro, phones, internet
c) Vehicle costs: gasoline, maintenance
d) Groceries
e) Grooming & clothing
f) Medical/dental/prescriptions
g) Entertainment, booze
h) All insurances: Life, vehicles, home, medical

- What will your variable costs be - take into consideration

a) Debt (non mortgage) Loans/Interest/finance costs
b) Vacations/Travel
c) Gifts
d) Replacement of assets,vehicles, repairs etc
e) Misc: as a % of all costs

.

BristolUK

Yes.

I made myself a note about it way back last year when I came across it looking for other stuff and I just came across it this afternoon. Completely forgot.

Mind you the application is enormously involved - far more than it needs to be - plus it asks for all sorts of documents they already saw last year.

Canada likes to make you work for stuff like this. Which is fine in some respects but it means they're wasting their time needlessly too.