CPP

Ok well to squash this debate about a Million dollars for retirement. Hopefully everyone knows about CPP (Canada Pension Plan), you pay in to get out...unless you're Donnie and then you will be under the Australian government pension plan. Also most companies have a pension plan for their employees. Although both of these are available, there is no guarantee that one will receive these benefits. I personally do not think that there is a need to have a million dollars tucked away. I was working on the money management side of things when I first got out here and we had clients that where very successful and going into retirement and did not have a million. Also if you have a large portion of money saved in an RRSP then when you hit a specific age, that RRSP turns into an RIF (Retirement Income Fund). So you say how much you want to remove from this account yearly, monthly or whatever. It's like having a bank account in the markets. So your money is trying to grow while you are depleting it, the advantage to this account is again tax breaks (like the RRSP).
Also if anyone is getting a mortgage soon I was reading this weekend about borrowing against a mortgage and then investing and using the proceeds of the investment to pay the interest on the mortgage, thus allowing you to write off your mortgage interest payments on you taxes. I'm sure everyone is pumped about that bit of information.

As for Darcy's world cup comment. I am planning on going to the World Cup next summer in Germany. It will be a two week trip in June, I have been looking into tickets and I have my name in for the first round draw (it's a weird system), if I don't get any in the first round I will be going into the second draw. The only thing about the second is that it is for teams specific tickets. So you pretty much just pick a team and follow them around. Which wouldn't be too bad if you got a good group to watch....and you could see a bunch of different venues. So if anyone is interested in coming along let me know so I can get tickets....Darcy has express some interest, and my boy Jon from Mount A is down.



One last thing on the Million dollar topic. If you had a million dollars in an account...and you invested it. A reasonable return for a conservative investor is 6% which would work out to $60,000 dollars a year. Now say you wanted to live nice for the rest of your life, so you take out $100,000 each year. Thus depleting your base each year. This million dollars would last you 15+ years before running out. Also take into account CPP and maybe your company's pension plan, also the many discounts you will be getting as a senior, well I think that this million dollar baby has just been squashed. (note: if you just took out the $60,000 each year this money would last indefinitely - in theory)

*EDIT*

Extended thoughts about this. If you have a house paid for and all other big tickets (ie. car, cottage, kids school), then you wouldn't need that much income. So say you got $30,000 a year in retirement, maybe $1,000/mo from CPP and the rest from savings (note that I'm assuming you don't have a work pension). To make up the remaining $18,000 ($30,000 - ($1,000/mo x 12 months)) you would need $300,000 in savings, and assuming as before that you invest it and get a 6% return, this will give you an income of $30,000 for the rest of your life and leave behind the $300,000 dollar base for your children.

Now if you were working and say at the age of 25 you decided that you wanted to start saving for retirement. Say you are making $50,000 a year and you are saving the recommended 20% of your income. So $10,000 dollars is your inital investment, and every year after you decide to increase you're contribution by 5% so in year 2 it would be $10,500, year 3 $11,025....and so on. Now to get to the required $300,000 dollars you would want it would take approx. 15 years (assuming that each year you invested the money and got an average return of 6%). So that would mean at 40 years of age a person could retire and live a pretty good life of leisure. Now I am only trying to up this by 5 years, which I don't feel is too crazy.

Allas