tag:blogger.com,1999:blog-5465015914589377788.post6156143151260743181..comments2024-03-20T09:32:16.592-04:00Comments on Michael James on Money: Your Retirement Income BlueprintMichael Jameshttp://www.blogger.com/profile/10362529610470788243noreply@blogger.comBlogger33125tag:blogger.com,1999:blog-5465015914589377788.post-55082669455127006342021-08-15T13:57:45.662-04:002021-08-15T13:57:45.662-04:00Since writing the comment above about thinking tha...Since writing the comment above about thinking that early CPP made sense for my wife and me, I've done much more analysis and concluded that taking CPP at 70 is clearly better for us. In the intervening years, I've written about this several times.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-23694912295080841142015-08-11T22:28:23.446-04:002015-08-11T22:28:23.446-04:00@Steven: After a very quick look, your spreadsheet...@Steven: After a very quick look, your spreadsheet looks thorough. I'm in the middle of an intense week helping to run the Canadian Little League Championships. I've made a note to myself to take a closer look hopefully next week.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-69278368032960423752015-08-11T22:17:25.554-04:002015-08-11T22:17:25.554-04:00Michael,
I finally got around to doing the calcula...Michael,<br />I finally got around to doing the calculations myself. Like you, I had been thinking about it for a while. The results are as you suggested that for most people it is best to begin drawing RRSP at retirement, but my results show that maybe not as much as you draw from non-registered investments (accounting for assets in each). I have posted the results here: http://pabroon.blogspot.ca/2015/08/financial-studies-1-rrsp-withdrawal.html I look forward to any comments you may have.<br />SteveAnonymoushttps://www.blogger.com/profile/13533256790078613997noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-50701226703438692192015-08-08T09:38:50.565-04:002015-08-08T09:38:50.565-04:00Thanks Michael. The bulk of our savings is in RRSP...Thanks Michael. The bulk of our savings is in RRSP's and my LIRA so need to start withdrawing there and defer TFSA and unregistered. My wife has a good (but unindexed) pension that provides for all of our basic living costs, and our savings provides discretionary $. Govt pensions should help offset this inflation creep loss on work pension, and our plan captures any remaining shortfall of purchasing power. I am using a sort of actuarial approach with actual dollar withdrawal amounts (not %'s) by resetting annually based on actual capital at year end taking us to age 95. (I don't like simple set withdrawal assumptions like 3 or 4% as they don't factor in other changing factors such as govt pensions, reductions in withdrawals at older ages etc. I haven't been able to figure out why this approach shouldn't work but welcome feedback. We're also flexible with spending and will cut back withdrawals as needed/beneficial in bad market years. <br /><br />Marko, no I have not doing any transferring yet. I've had a fair bit of cash available since starting retirement so haven't actually started doing any RRSP withdrawals yet. My institution doesn't have fees for this on my account, so I will be keeping withdrawals to $5k at a time (but as often as I want) minimizing tax to 10% , and then pay the difference at filing time. Our situations are somewhat similar and my wife is also school teacher - but retired for 3 years now.<br /><br />That is a good suggestion Anonymous. If it were easy to find a reliable good tax professional I would certainly pay something to have recommendations on our situation.RBullnoreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-33008087912052884142015-08-07T19:57:14.403-04:002015-08-07T19:57:14.403-04:00@Anonymous: I'd like to see such a list as wel...@Anonymous: I'd like to see such a list as well, but I don't know of one.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-22514094714768264192015-08-07T19:56:39.864-04:002015-08-07T19:56:39.864-04:00@Anonymous: It's hard to convey everything in ...@Anonymous: It's hard to convey everything in just one book; the real talent is to apply it all to a specific case.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-83648079120432860912015-08-07T10:01:19.484-04:002015-08-07T10:01:19.484-04:00Suggestion: Many of us need a tax expert to run so...Suggestion: Many of us need a tax expert to run some different scenarios, especially if one has a substantial investment portfolio, such as close to or over $1M. It would be good to have a list of truly good tax accountants/retirement experts we could consult. (Perhaps a list by city.) )Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-46303868561889831682015-08-07T09:57:22.550-04:002015-08-07T09:57:22.550-04:00I am currently reading the book, and find it could...I am currently reading the book, and find it could be more clear on many points, especially the suggestion to take CPP early, and starting to withdraw money from RRSP's well before age 71 or age 65. I think he should have explained some things better in very plain language and provided some summaries of key points a the end of each topic, not each chapter. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-63483194213662564142015-08-07T09:52:41.625-04:002015-08-07T09:52:41.625-04:00When you find one, let us all know,When you find one, let us all know,Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-15769257017749121642015-08-07T08:38:26.185-04:002015-08-07T08:38:26.185-04:00@Blitzer68: Each situation is different. I think ...@Blitzer68: Each situation is different. I think my wife and I are likely to be slightly better off if we take CPP early, but it is a fairly close decision.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-86660900120666890812015-08-07T04:59:04.869-04:002015-08-07T04:59:04.869-04:00I'm leaning toward delaying CPP benefits. The ...I'm leaning toward delaying CPP benefits. The survivors cap doesn't affect my decision since the survivor'ss expenses will decrease. The downside of starting my pension early and living to a ripe old age seems a lot larger than me missing out on a few dollars early in my retirement that I really didn’t need anyway. I'm focusing on maintaining a comfortable retirement under various scenarios. Jim Turnbullhttps://www.blogger.com/profile/16141660549510415017noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-87588799232162949492015-08-02T11:53:46.477-04:002015-08-02T11:53:46.477-04:00@RBull: As long as you're using RRSP and LIRA ...@RBull: As long as you're using RRSP and LIRA withdrawals in place of TFSA and non-registered withdrawals, this can be part of a tax-smart strategy for some people. I fear that some retirees may misunderstand the strategy to draw on RRSPs early and simply increase their spending to unsustainable levels. Good luck.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-81390589751005897902015-08-02T08:44:52.621-04:002015-08-02T08:44:52.621-04:00RBull- did you move 50% of your LIRA into your RRS...RBull- did you move 50% of your LIRA into your RRSP? Did you move your RRSP to a RRIF? That's my intended course of action.Marko@Northlandhttps://www.blogger.com/profile/17781498043944695646noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-46454952050025950092015-08-02T08:04:21.290-04:002015-08-02T08:04:21.290-04:00Excellent review Michael. I am 56 and retired appr...Excellent review Michael. I am 56 and retired approx 15 months ago. I read Diamonds book about 2 months ago. Many of your comments/criticisms were things I "questioned" as well while reading-<br />inflation affects, product costs, health insurance needs etc. You are able to articulate and calculate these better than I can however. <br /><br />My plan has been to withdraw from RRSP and LIRA first so am happy to see another proponent of that strategy. As well the part about taking CPP early is causing me to look seriously at this option for me and for my wife. RBullnoreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-66932099976683609772015-07-29T14:19:11.828-04:002015-07-29T14:19:11.828-04:00Yes MJ, that is the conclusion I have come to as ...Yes MJ, that is the conclusion I have come to as well. Now I just need to find a good fee based tax specialist Marko@Northlandhttps://www.blogger.com/profile/17781498043944695646noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-80670525238511385772015-07-29T13:17:09.856-04:002015-07-29T13:17:09.856-04:00@Marko: There are many similarities between your s...@Marko: There are many similarities between your situation and mine. I haven't figured out my own best path yet, so I'm not in a position to tell you what to do. You ask good questions, but I don't know the answers. Certainly a tax specialist should be able to help.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-56953260572703565442015-07-29T12:59:05.164-04:002015-07-29T12:59:05.164-04:00Thanks MJ - Perhaps you could do a future post on ...Thanks MJ - Perhaps you could do a future post on drawing down income from various accounts?<br /><br />For example, my investments are Vanguard and BMO ETF’s held in a 4 accounts – cash, TFSA, RRSP and a LIRA invested as follows:<br />55% bonds ($386K), cash ($60K) and preferred shares ($58K)<br />45% equities – 34% ($122K) allocated to Canadian equity<br />66% ($247K) allocated to “all world equity”<br />What is the best way to draw down my investments to fund my retirement?<br />Should I move 50% of my LIRA into my RRSP?<br />Should I then draw down the remaining 50% remaining in the LIRA?<br />Should I put it all in a RIF now?<br /><br />I think I need to see a tax specialist!Marko@Northlandhttps://www.blogger.com/profile/17781498043944695646noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-86160215659081445792015-07-29T12:13:09.245-04:002015-07-29T12:13:09.245-04:00@Marko: Hopefully you're in for a long and hea...@Marko: Hopefully you're in for a long and healthy retirement. Be sure to choose a safe withdrawal rate. For someone in your situation, it may make sense to start drawing on your RRSPs now, but not entirely for spending. It may make sense to move some of the money into a TFSA. It all depends on your mix of asset levels in your accounts.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-12776335608498488362015-07-29T12:03:11.835-04:002015-07-29T12:03:11.835-04:00This was a good post and of special interest to me...This was a good post and of special interest to me as I am 56, recently retired and considering different options for living off my investments. I will buy Diamond's book. I don't have a company pension but I am also going to follow Bruce Wiebe's chosen path.Marko@Northlandhttps://www.blogger.com/profile/17781498043944695646noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-48007414009489116582015-07-29T10:14:57.852-04:002015-07-29T10:14:57.852-04:00@Bruce: The non-indexation of your pensions means ...@Bruce: The non-indexation of your pensions means your RRSP/RRIF withdrawals will have to rise faster than inflation (perhaps you already knew this). As long as your running of the numbers takes this into account, I'm optimistic this will work out for you.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-6103368916015068632015-07-29T10:11:15.238-04:002015-07-29T10:11:15.238-04:00@Mark: For my own situation I had doubts about the...@Mark: For my own situation I had doubts about the usual advice to delay draining RRSPs. It was good to see that someone else agrees (not that I have a problem being a lone wolf if I'm convinced I'm right :-)Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-81120720858559984622015-07-29T09:48:40.888-04:002015-07-29T09:48:40.888-04:00I'm 59, wife is 56, both recently retired with...I'm 59, wife is 56, both recently retired with non-indexed Co. Pensions. I will start drawing CPP later this year. Ran the numbers on RRSP withdrawals starting now to age 90 with 5% return and 3% inflation. Results show a nice flow of increasing income with the withdrawal amount at 71 slightly above Govt mandated minimum withdrawal. Seems like the best way to go for us is to start RRSP withdrawals now, take CPP at 60 to support Snowbird lifestyle while health is good. Using inflation when factoring in withdrawals from RRSP, TFSA and Taxable Investment account provides a nice increasing income stream until wife is 90. That's the plan.Bruce Wiebehttps://www.blogger.com/profile/12121934583669739336noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-74578282066686882392015-07-29T08:38:37.907-04:002015-07-29T08:38:37.907-04:00I enjoyed Daryl's book as well. Read it a cou...I enjoyed Daryl's book as well. Read it a couple of years ago and have yet to post a review of it. I will try and do that later this year, add it to my list.<br /><br />The biggest takeaways for me from his book was his focus on winding down the RRSP before age 71, looking at strategies associated with that, and taking CPP as soon as possible - bird in hand approach. This makes sense to me since it helps those newly retired who more often than not, spend more money earlier in retirement than later. <br /><br />Good review Michael.<br />MarkMy Own Advisorhttp://www.myownadvisor.canoreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-73693412945420211482015-07-28T13:53:33.921-04:002015-07-28T13:53:33.921-04:00@Anonymous: Yes, Diamond mentioned these points. ...@Anonymous: Yes, Diamond mentioned these points. They definitely make sense.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-69308288933160760972015-07-28T13:43:03.309-04:002015-07-28T13:43:03.309-04:00I'm not an expert, but a couple of other consi...I'm not an expert, but a couple of other considerations?<br /><br />- if you have a lot of rsp left when you die & it transfers to your spouse, they may become heavily taxed/clawed back (I think Diamond mentioned this??)<br /><br />- I think govt subsidized long term care near end-of-life is based on income (ie, rif) and not assets, so maybe better to have non-taxable investments rather than rif at that time, if you don't want your estate eroded<br /><br />do these make sense?<br /><br />Anonymousnoreply@blogger.com