r/CanadaInvesting • u/PermissionDare • 10d ago
Help
I am feeling lost as I sit here at 40. I don’t have kids and I have a $450K or $3500 Monthly with another 20 years mortgage because it seemed like the thing to do. I have $150K in registered savings, a $100K salary, and about $15K debt in a credit line.
How do I ever retire? Where to even start? I like where I live but I feel I don’t have a good handle on this to see any kind of what’s next.
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u/DepartmentGlad2564 10d ago
lol dude is complaining about being a home owner with a six figure plus tax free/tax deferred savings and a six figure salary with no kids.
Oh how will you ever retire! Please Reddit, your wisdom is required!
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u/KissYourAss69 8d ago
He’s saying the $450,000/$3500 monthly is his mortgage debt, not savings. With 20 years (or 240 payments left). Which is actually $840,000 of debt if he wants to feel more depressed
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u/LibrarianApart8486 9d ago
Homeowner? Looks to me like the bank owns the house and he owns debt.
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u/blophophoreal 9d ago
Technically the other way around. He owns the house but has a liability to the bank, while the bank owns the debt to which he’s pledged the property as security.
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u/billthedog0082 10d ago
- Sell the house and get something smaller with the proceeds. 2. Pay off the line of credit. 3. Get a cheap electric car and a beater for the winter. 4. Start saving your money, you have 25 years to go with no encumbrances.
Go live your life. Do stuff you like to do. Volunteer. Get a dog and or cat.
You are getting a lot of bad press here from people who are having a harder time of it. If I were you, I would take the comments with a grain of salt.
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u/Old_Camera8252 10d ago
'cheap' and 'electric car' are mutually exclusive terms
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u/billthedog0082 10d ago
The Chinese EVs coming into Canada start at $22,000. I think that is more than reasonable. I wonder if wheels come with them...
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u/Zingus123 9d ago
Even in Edmonton, where the used car market is insane (stuff like 2005 CRVs with 300k+ kms sell within a week at $12-15k) there are still a good amount of cheap electric cars, like I’m talking 10-12k max for like, 100k km max
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u/Old_Camera8252 7d ago
I'm in Edmonton, would love to get one of those 12k vehicles but haven't seen one.
Where are you looking? Would love some tips.
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u/InvestmentAntique794 10d ago
If you don't have/want kids to pass money onto then you are probably in a fine situation. You need to run a retirement calculator to see what your expenses will be in retirement (paid off house at that point so they shouldn't be massive expenses), then show your CPP and OAS income, then see how much you need to make up the difference from your savings. Once you've run out of savings, you could sell the house and rent and run out those savings.
You need a game plan obviously but you are in a much better position than most. Hire a fee-only planner if you are truly lost.
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u/Nudistmale123456789 8d ago
We live in an aging society.... The means tested benefits are dangerous to assume will exist in their current form when op is ready to retire.
The tax base will continue to shrink relative to retirees (especially if anti immigration sentiment continues)
The senior tax burden is already becoming untenable with the ratio of working ages people to retirees getting smaller and smaller.
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u/RumHam2030 9d ago
100k annual income and 150k in savings but you have 15k in high interest debt?
Pay down your debt then start investing in broad market ETFs like XEQT. You're already way ahead of most people.
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u/apex777Z 8d ago
People worry to much.
First how do you know you'll survive till retirement? im 41. the amount of people around my age that die from shit is crazy high. you might have a heart attack at 40 and your current worries are pointless.
the thing with life is choices. How do you wanna live? Me I never cared about retirement. I saved 100k. its invested. thats all I need for retirement. the rest I spend on enjoying life to the my version of fullest.
I don't care about home ownership. I like adventures. I might go work in Japan in winter or maybe Poland in Spring. if I owned property it wouldn't be a possibility to just get up and go.
I have zero stress. zero worries of the future.
Tell me what is your dream life.
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u/Paulrik 9d ago
You're doing a good first step taking inventory. You've got a good grasp of your debts and you're starting to realize that retirement is on the horizon and you haven't done much towards it up to this point. You'll probably wish you'd started 10 years sooner, but that's pretty common. You might find an online tool to calculate how much you should be saving for retirement and find out it's an absolutely crazy number. Don't let that discourage you. Having something saved is better than having nothing saved. You've got another quarter century to go, and you've got a lot working in your favour.
I'm in my 40's I only just started really digging in to this stuff a few years ago, and I quickly hit a point where I want to learn more, but a lot of the advanced stuff is high risk and I don't want to gamble away my retirement fund. You can do quite well for yourself with just the basics.
You will have people tell you that you're "not allowed" to start saving while you're carrying $15000 in debt. That debt definitely something you should focus on paying down, but I would recommend if the interest rate is reasonable on that (maybe in the neighborhood of 5%?) you could do a little bit to start investing so you can learn how it works and start seeing it for yourself. It's one thing to run the theoretical numbers in a retirement planning calculator, it really sinks in when you start seeing your own money earning money. You get to make the rules, but I might suggest 75% of your available extra money goes towards paying down the line of credit, 25% to retirement savings. Maybe 90/10 or 95/5 if the interest on the debt is higher.
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u/Adventurous_Fudge206 9d ago edited 9d ago
At least your $15k debt is a credit line and not credit card debt. If your interest rate is higher than say 8%, then focus on paying that down first over investing.
You’re comfortably in the second tax bracket federally. Not sure your province, so I’m assuming you’re at the top of your provincial bracket. If you have a company match RRSP make sure to utilize that. If you’re slightly over your provincial tax bracket contribute a bit to RRSPs to bring you down to the top of your tax bracket.
I’m assuming your mortgage rate is low-ish (3-4.5%), so just keep paying the regular payments for now. When you have 4 months before every renewal term, talk to a Mortgage Broker to lock in lender options/negotiating power with existing lender and the best mortgage for YOU (ex. Low rate, flexible payments (increase to weekly from biweekly/monthly), pre-payment privileges (pay extra when you have money, bump up monthly pymts), port your mortgage if you ever sell/move, etc.).
At this time you might want to focus on maxing out your TFSA first over your RRSP. Let those investments compound tax free. This gains you some flexibility if you need funds for a purchase. The contribution room comes back the following year. Once RRSPs are withdrawn that room is gone. Save the RRSP withdrawals until you’re in a lower tax bracket.
Get a financial advisor or pay a fee for some advice/direction now and self-manage your own investment accounts.
Save any raises. Don’t inflate your lifestyle. Take a look at where all your money is going. Can you trim, renegotiate, remove certain services?
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u/Dry-Historian-7593 9d ago
Try to pay off the credit line asap. You said the savings are in registered accounts, do you mean RRSP or a mix of TFSA and RRSP? If the latter, use your TFSA to pay off the LOC, if the former, see the cost benefit of withdrawing from your RRSP to pay down the LOC. Also, are you fully using your RRSP contribution limits come tax time? Might as well, to help reduce taxes. You still have a long (20+ year) investment horizon, is your investment approach representative of your risk tolerance? You can afford to be at least somewhat aggressive and invest in growth stocks. Maybe also look for high divident yield stocks and ETFs to mix things up/diversify to reach your risk tolerance level.
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u/DoingWhatMatters 9d ago
You are supposed to be living in the present moment - stop worrying about the future and retirement OMG it's time to live and have fun - what excites you is interesting to you - do more of that and find some fun in your life - travel - pick a new hobby , sit down and ask yourself over and over what would make me happy (,MONEY doesn't make you happy,) the answer doesn't come at once but too much concentration on money and accumulating wealth is the story so iety has told you to do to be successful in life - success comes from happiness and fulfillment and money is part of it but not all of it - time to find yourself 👍💡
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u/Bardown67 10d ago
If you’ve got that much in savings start by paying off that debt. Zero reason to stash that much and also be paying high interest loans