My favourite posts (written by other bloggers) about finances, early retirement and financial freedom. I have these book-marked to inspire me.

McGill course

Personal Finances Essentials Course (it’s free – a good course for young adults, esp.)

Mr. Money Moustache

From Zero to Hero in One Blog Post

The Shockingly Simple Math Behind Early Retirement

How much do I need for retirement?

MMM’s 2013 annual spending (~$25,000, they are mortgage-free)

Canadian Investing with Mr. Frugal Toque

Why is it so hard to downshift?

How to make money in the stock market (index funds)

Teaching children about money

Case studies

Freedom with Bruno

Bruno’s Path to Financial Freedom

Root of Good

Early Retirement at 33: An Overview

Zero to Millionaire in Ten Years

Their family’s 2016 budget ($40,000 for a family of 5)

How they save money on groceries

One month of groceries ($555 – they live in the US)

Go Curry Cracker

Journey to Early Retirement: Episode 4

Journey to Early Retirement: Episode 3

Journey to Early Retirement: Episode 2

Clawing Out of Debt

Jim Collins

Guest blog post on MMM: Financial Independence 23 years later

A simple path to wealth

What Jim owns and why he owns it

History of “This is the Top – Dow Jones (1900-2016)”

A guided meditation for when the stock market is dropping

Canadian Couch Potato

The Ultimate Couch Potato Guide

Couch potato FAQs

Model Canadian Couch Potato portfolios

Tangerine Portfolio selector – it resulted in the same allocation that I follow (Balanced)

Why Rebalance your Portfolio?

How to lower your rebalancing costs

How to set up a hands-free EFT portfolio

Scientific review of portfolio diversification

  • Couch potato consistently falls in the middle of the pack

Generating a retirement income

  • set up a 5 year GIC ladder and keep one year’s worth of living expenses in a high-interest savings account.

Mom and Dad Money

Two ways to make investing less risky (asset allocation and diversification)

  • A good rule of thumb is to expect that in any given year you could lose half of whatever money you have in the stock market. Your risk tolerance will affect your asset allocation.
  • Good advice from Matt about asset allocation: “I would simply encourage you to pick an asset allocation that feels right to you for now, put it in place, and stick with it through at least one big market crash. After that you can re-evaluate how you feel about the level of risk you’ve taken on and re-adjust if you need to.”

Matt’s personal investment plan (70% stocks, 30% bonds) – I’m slowly moving my allocations to this (previously, I’ve had 60% stocks, 40% bonds).

How much will you spend per year during retirement?

If you’re many years from retirement and only need a rough figure, apply a factor of 50% to 70% to your peak salary to estimate the level of retirement spending that maintains your standard of living. Read more here.

Can I retire yet?

Your retirement planning should at a minimum assume one spouse will live to at least 95 years old. Read more here.

Canadian retirement income calculator here

Three best free retirement calculators here.

Vanguard’s retirement nest egg calculation here.

For Canadians, how much CPP and OAS can you expect to receive when you retire?

How to understand your CPP statement of contributions

Maximum benefit – $ 19,950.24 (in 2016). This amount will be reduced if you have other sources of income, and it depends on how much you have contributed to CPP – Source

Government of Canada website – The average monthly pension is $500 per month

Difference between CPP and OAS here.

The CPP increases by 8.4%/yr. every year you delay past age 65 and the OAS by 7.2%/yr.

CPP income is fully taxable, just like your employment income.

Miscellaneous

Market timing game

Three best free retirement calculators

Investing Calculator – how much do you need to invest in order to retire by a certain number of years?

Here’s a back-of-the-envelope calculation you can do to figure out the size of your nest egg (from this article).

  1. Multiply your annual retirement expenses by 25. For example, if you think you’ll need $40,000 a year in retirement, then you’d have to save $1,000,000.
  2. Subtract a conservative estimate of the government benefits you’ll be receiving, such as those from the Canada Pension Plan (CPP) and Old Age Security (OAS), which may provide you with an additional $10,000 or $15,000 per year, said Engen. That means your nest egg would only have to be $625,000-$750,000.

However, this MoneySense article argues that in Canada, if you want $44,000 per year (as a couple), you only need a nest egg of $200,000 due to the CPP and OAS that you will receive. Read more here.

(Similarly, you can read this article about  David Ashton’s book, The Sleep-Easy Retirement Guide, on the same topic. Your RRSP is probably better shape than you think).

Safe withdrawal rate

Note that many assume a safe withdrawal rate of 4%.

Doing precise calculations to adjust the figures for retiring earlier or later than 65 can be complex. But if you want to look at retiring earlier than 65, here is my suggestion for a rough adjustment. First of all, reduce the withdrawal rate by 0.1 percentage point for each year that you retire prior to age 65 (up until age 60). So in the couple example, if you retire at age 63, your sustainable withdrawal rate would be 3.8%. Read more here.

Vanguard’s power of compounding calculator here.

Market fluctuations

Yahoo.com/finance has some good graphs of market fluctuations

Average net worth of Canadians

How do you compare with your retirement savings?

What should your networth be?

Modern Family Finances in Canada –Jan 2018

You need this much retirement savings at a given age and income – Investor’s Business Daily – a useful chart (but it doesn’t take into account how much money CPP and OAS will contribute to our retirement income).

Net worth milestones by age – Globe and Mail (pretty unrealistic numbers, I think)

Net worth milestones by age – Money Matters

–  By age 40, your net worth should be twice your salary.

– By age 50 your net worth should be four times your salary.

– By age 60, your net worth should be 6x your salary.

– When you are ready to retire, you should have 10x your salary saved.

Average net worth of Canadians in 2018

Target net worth for Canadians – Freedom 35 blog (this has a good table for target net worths by age and “sufficient”, “good”, “excellent” and “rich”. Note to account for the city that you live in (we live in Calgary, so can multiple the values in this table by 51.74%).

Average net worth of Canadians in 2014 – Money Sense

Median and average net worth

Average net worth of Canadians in 2005 – Stats Canada

Average net worth of Canadians in 2012 – Stats Canada

Average net worth of Canadians in 2016 – Stats Canada

Average household expenses in Canada

(In 2013, the average Canadian household spent $58,592, not including income taxes, charitable contributions or RRSP contributions)

Sunlife calculator – compares your net worth with others in Canada

Royal Bank – how do you stack up?

Rules of thumb

The Simple Dollar recommends this formula for roughly determining what your net worth should be: (Average of your last 10 years of annual income) minus ($15,000 and an additional $5,000 for every person in your household, including you). Multiply that by your age and divide by 8. Read more here.

Average 401(k) balance by age

Budgets are Sexy

Are Canadians saving enough?

Planning for Retirement. Are Canadians saving enough? They recommend saving at least 15% of your gross earnings. They concluded that 2/3’s of Canadians aren’t saving enough.

Thoughts on asset allocation

Thoughts on asset allocation

Identifying your money archetype

According to the book, “Money Magic: Unleashing Your Potential for True Prosperity” by Deborah Price, there are 8 money “archetypes”, you can read about the 8 archetypes here and take a quiz to find out about your archetypes here.

As of April 2019, the test revealed that I am 50% magician, 42% warrior and 17% creator/artist, with 9% fool and tyrant.

Pensions

Picking survivor and guarantee options

Understanding your defined benefit pension options

Public Service Pension Plan

Best pension payout option

RRIFs

You must convert all RRSPs to RRIFs by the age of 71.

Retirement Planning spreadsheet

Money Sense article Turning an RRSP into a RRIF – a Registered Retirement Income Fund – is by far the most common choice these days. When you convert your RRSP, your investments move into a RRIF account in kind/as is. So for all intents and purposes, it’s the same account, just with a different account number and of course the minimum required withdrawal rules. You can’t contribute to a RRIF either.

The complete guide for RRIFs

RRIF vs annuity

How to invest an RRIF

Annuities

Annuities are most likely to benefit you if you’re a typical middle-class retiree.

You get the greatest benefit from gradually adding annuities to your investment mix from your late 60s to your late 70s, until you have about one-third of your portfolio in annuities.

Whatever annuity you choose, make sure its payouts are guaranteed for life rather than just a limited term.

Down side of annuities:

  • having to hand over capital to an insurance company, the possibility of dying early and not getting all your money back (or be able to pass on to your heirs), high costs and too many terms and conditions. Read more here.

RESPs

Canadian Couch Potatoes thoughts on RESPs here.

Building RESPs using EFTS – including asset allocations as the child gets older here.

Favourite books

Wealthy Barber

Automatic Millionaire

The Sleep-Easy Retirement Guide by David Aston – a great resource esp. for Canadians  (A reminder for me to read this again esp when I am getting closer to retirement).