RRSP Question *retire early

[BeyondNewB]

Guys,

Im 41 years old and have kind of hit the jackpot with my RRSP.. I invested aggresively and have over 800,000 in my RRSP.

I havent talked to my banker yet, just wanted to share my good news and get some info as well.

Has anyone else took out money early from their RRSP?
Can you take it all out at once and invest it into a TFSA instead?

[in*10*se]

Originally posted by BeyondNewB


<insert best attempt at humble brag>



I'd like to think a 41 year old wouldn't come onto a car forum full of teeny boppers and ask for investment advice...

none the less. :rolleyes:

google yeilds amazing results that i don't even have to type out an explanation for.....

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/rrsps-eng.html

[Akumaz]

cant help you on being able to take it out early
but you can only put 20k or 25k into the TSFA
also you will be taxed taking the money out RRSP
Especially if you have income now, it doesnt make sense to take money out of RRSP to place in TSFA

[quick_scar]

Yes you can remove it early.

Yes you can invest (some) of it in a TFSA without penalty. (rest you are charged a penalty on).


If you want to see it disappear just as fast as you made it appear, then i would pull it out early. You are looking at at least a 10% hit to pull it out early if I am not mistaken. If you dont care about the 80K, then by all means take it out.

[ercchry]

imo $880k at age 41 is not even close to retirement level, keep doing what you are doing if its working for you

[barmanjay]

Buy 4 suited properties with 25% down.

Buy another outright.



Profit?!?!

[TYMSMNY]

yes Mr. Troll.... but you would be taxed on all ~$800,000 as income aside from any deductions you may or may not have.

[Xtrema]

If you have other incomes, probably not good to take it out.

But if u are planning a few years of low or no income, why not.

$800k is great but not if you want to retire at 41. At minimum, it take $30k/yr to live well. With inflation, that will probably laSt you 20 to 25 years.

But if you planning to blow it all and live off government 65 and beyond, why not.

[Xtrema]

Originally posted by BeyondNewB

Can you take it all out at once and invest it into a TFSA instead?

A) you will have to pay ~$300k in taxes.

B) you can only put $25.5k in tfsa at this point.

If I'm in your situation, I would start investing more in tfsa than keep putting in RRSP. If you keep on doing well with RRSP like you have in the past 20 odd years, you may ended up with too much and get taxed a lot when you are forced to convert to RRIF.

But I have to say, you are well within range of retiring at early 50s. There is no point having shit load of money and too old to spend it.

Again, nobody has the whole picture but yourself. A question like that tells me you should talk to a financial planner, you need help.

[Mitsu3000gt]

Haha what an obvious attempt to brag, given how many better, faster, and more easily accessible sources for the answer to that question exist other than Beyond.

Also you will need way more than that to retire early unless you live an incredibly frugal lifestyle.

[JRSC00LUDE]

You can retire early if you also own a good home free and clear, a couple vehicles, have a $50k/yr annuity paying out to you and don't have to touch that money.

Oh yeah, almost forgot - FUCK OFF, Trollface. You must be retarded.

[speedog]

Originally posted by BeyondNewB
Guys,

Im 41 years old and have kind of hit the jackpot with my RRSP.. I invested aggresively and have over 800,000 in my RRSP.

I havent talked to my banker yet, just wanted to share my good news and get some info as well.

Has anyone else took out money early from their RRSP?
Can you take it all out at once and invest it into a TFSA instead?
41? Uh huh.

Your past posts would indicate that you are in your early 20's unless you went back to university in your mid-late 30's.

Even so, as a university educated 41 year old, I would have expected better grammar/spelling.

[Feruk]

Originally posted by ercchry
imo $880k at age 41 is not even close to retirement level, keep doing what you are doing if its working for you

100% agreed. I'd say $2 million + is when you can consider starting to retire. Enough money that you can throw into something giving you meaningful yield and inflation hedge.

[swak]

Im borderline retarded when it comes to financial advice (yet i just started trading stocks... go figure).

But, would it not make sense to continue working and invest the 800k and grow the shit out of it?

Even at marginal interest rates, you'd get some good monies from that.

[JLau]

why do you wanna pull it out in the first place? you should be putting money in RRSP to reduce taxes, then use that tax return for TFSA, not pulling out RRSP

If you want to retire decent, u should be mortgage free and have min 40k income

[Cos]

.

[Inzane]

Retire on $800k at age 41??? ROFLMGDAO!!!!!! :rofl:

[Sugarphreak]

...

[Type_S1]

I just ran the numbers (extremely conservative) and after 20 years of working and counting ONLY RRSP contributions through work (5% of salary employee doubles - 15% total) I only come up with ~$505,000. I would say if this is just his RRSP $ and not everything he has the OP, if telling the truth, is doing okay.

I ran this over a 40 year career, salary maxing out at 200k at year 25 (conservative) and came up with about 1.9mm total RRSP. Thank god for stock options, restricted stock, other investing and business ventures.

[Inzane]

Originally posted by Sugarphreak
I'd be having a panic attack if I was 41 and only had that much saved up!

What is it you do for a living that you think it's that easy to have $880k saved up BY age 41? (Assuming we're talking just savings, not total net worth)

[Type_S1]

Originally posted by Inzane


What is it you do for a living that you think it's that easy to have $880k saved up BY age 41? (Assuming we're talking just savings, not total net worth)

You should know this guy talks out his ass. He will not have 880k in his rrsp's by 41....

[ercchry]

he never said RRSP... he just generalized "savings".... calm down big guy!

[Xtrema]

Originally posted by Inzane


What is it you do for a living that you think it's that easy to have $880k saved up BY age 41? (Assuming we're talking just savings, not total net worth)

Well you have to have some luck. Given that even if max out at ~$20k over 20 years, you only put in $400k.

And really, how many can put in $20k per year in their 20s in RRSP especially we are talking about the 90s here.

To hit that number by 41, you probably have to double your money multiple times over the course. Is it impossible? No, may be he bought MIcrosoft stock in the 90s switch to Apple stock in 2000s.

More than likely OP is a troll due to the amount he collected doesn't match the financial knowledge he should posses.

And for the ones who said they need a million or 2 to retire... That may or may not be true depends on the level of living quality you want and if you want to financially help your kids and grand kids. Remember that cpp will definitely be there when you retire even if OAS and GIS may not.

IMO, if you own you house and have $1m on the side today and you are 50ish, you are ready for a modest retirement.

[Cos]

.

[Type_S1]

Originally posted by Cos


Haha oh man and I thought you were making a turn for the better. Wait until you meet SP in person. Very smart. Very nice. I cant wait until we have a house warming party in his 4 car garage house he is building in Aspen. He is a true baller. With a hummer.

Just because people are doing better than you doesnt mean that they are full of shit.

I never thought I was bad, I tell it how I see it.

"SP" has been a huge douche, as have I in instances. I really have nothing against him other than I find his hatred for me hilarious. Good for him and a 4 car garage. :thumbsup: At his age that sounds about right for working hard and being on track. 880k in RRSP's by 41 is still far fetched. 880k total savings is do-able.

[Sugarphreak]

...

[ExtraSlow]

Just want to agree with some of the posters above. $880k is a good start, but nowhere near enough to retire at age 41. It's getting close if you own your house outright and have zero debt.

Although, that much money would be enough for a single person to retire at age 65 or so, assuming they have some home equity and zero debt.

[heavyfuel]

I call bullshit. Who in their right mind is that insecure that they're 41 and need to brag about finances on a car forum? Asking questions they should already know the answer to? Like holy fuck you're intelligent enough to save 800k yet you don't know what you're allowed to do with it? I think a lot of the people who claim to be financial hotshots on here are full of shit too. Most of the high rollers I know and deal with all have one thing in common, and that's little or no time for bragging on car forums.

But hey, congrats to OP if I'm wrong, I sure as fuck prolly won't ever see that kinda money in my life, let alone by the time I'm 41 in 3 years.

[Xtrema]

Originally posted by Sugarphreak
IMO by 40 a solid retirement plan would have you with about 600K in RSP's (about 100K of that in aggressive stocks), 200K in tax free savings, 100K in tangible assets of some kind, and about 100K in cash sitting in a high interest account somewhere. If you are keeping track, that is 1M... plus a house with either less than 200K owing or more than 500K in equity. If you or your spouse have a pension plan of some kind, then obviously you can discount the RSP amount by quite a bit.

For a couple, dual income, sure, it isn't that hard in this town. A bit hard on single income.

[Inzane]

Originally posted by Sugarphreak
IMO by 40 a solid retirement plan would have you with about 600K in RSP's (about 100K of that in aggressive stocks), 200K in tax free savings, 100K in tangible assets of some kind, and about 100K in cash sitting in a high interest account somewhere. If you are keeping track, that is 1M... plus a house with either less than 200K owing or more than 500K in equity.


Originally posted by Xtrema
For a couple, dual income, sure, it isn't that hard in this town. A bit hard on single income.

My wife and I, both a couple/few years shy of 41 are both professionals each making 6-figure salaries, and our COMBINED savings is nowhere close to that. We do have a large house (triple garage, etc.) almost paid for, vehicles all paid for, and had two kids within the last two years (so we haven't been dual salary in that timeframe). But even if we hadn't had kids when we did I don't see our RRSPs reaching that level plus all that other "savings" you mention in the timeframe you state. Certainly not when you consider the setbacks the overall markets endured in the 2008-present timeframe. Maybe with some very agressive stock trading combined with a bit of luck, but I suspect a large portion of the population's RRSP plans with mutual funds have stayed relatively flat over that timeframe.

Bear in mind I'm in Edmonton, not Calgary (salary, home values, etc.).

I'm not saying what you were proposing isn't doable. But I doubt you are describing the norm for most families, even in this province.

[Sugarphreak]

...

[TYMSMNY]

Another thing to consider is passive income. You guys are all talking like the only way to do it is have a massive RRSP bunker. A good mix of RRSP, hard assets (property(ies)), liquid assets (cash equivelents), and passive income (15+ years ahead) is what will make your life easier.

Everyone's lifestyle and spending habits are different. Even OPs $800K may do it for him. If I had 5 years left and $800K with no one left, more than enough.

[Inzane]

The OP was asking if $800K in RRSPs was enough to retire right NOW, at age 41. Most here agree that the answer is NO.

But there's a big difference between retiring at 41 vs. retiring at 65+.

I see that you are trying to extrapolate. I think you're implying that if a person doesn't have "$1M" (your example) in savings (not including home equity, etc.) by age 41, they're not going to have enough by the time they are 65? That being the case how much money are you suggesting people need when they actually do retire at 65+?

I still have 25-30 working years ahead of me, and near-40-year olds are not in the "baby boomer" generation, btw.

[ercchry]

Originally posted by Inzane
That being the case how much money are you suggesting people need when they actually do retire at 65+?

as you get closer to that age i think you would have a better idea of what you would need. i think the biggest thing about early retirement though is you dont have a clue what the world will hold for you in 40+ years, so the safest bet would to have enough to live off a fraction of a safe/guaranteed return so you can reinvest enough to cover any potential inflation to maintain that level of income forever

...which realistically in this crazy world we live in i would think would have to be nearing $2-4mm per person... cause lets be honest... you some how pull that kind of coin in early on, you are not clipping coupons for your retirement :rofl:

[suntan]

If you have $800K in RRSPs you've fucked up big time. The amount of capital gains tax savings you've lost is staggering.

[Sugarphreak]

...

[Xtrema]

Originally posted by Inzane
The OP was asking if $800K in RRSPs was enough to retire right NOW, at age 41. Most here agree that the answer is NO.

But there's a big difference between retiring at 41 vs. retiring at 65+.

I see that you are trying to extrapolate. I think you're implying that if a person doesn't have &quot;$1M&quot; (your example) in savings (not including home equity, etc.) by age 41, they're not going to have enough by the time they are 65? That being the case how much money are you suggesting people need when they actually do retire at 65+?

I still have 25-30 working years ahead of me, and near-40-year olds are not in the &quot;baby boomer&quot; generation, btw.

Well, let's look at the quality of life you want in retirement:

Assumption:

House: Paid for
Cars: Paid for
Kids: Paid for an making money on their own

Monthly Budget for a couple in 2013 dollars:
Food: $500
Property Taxes: $300
2 Cars, insurance, gas, maintenance: $600
Meds: $200
Utilities: $400

Total: $2000/mth or $24K/year.

Let's add $10K for entertainment (travel, eating out, hobbies etc).

That's $34K/year.

Base on that and a 4% inflation rate, and 0% gain on your nest egg investments, you need:

To last 10 years: $408K
To last 20 years: $1M
To last 30 years: $1.9M

Now that standard may be spartan for some and luxury for others. I think IMO, it's slightly below average.

We are assuming you have 0% gain. If you can match inflation, your $ will last much longer.

3rd, we are assuming you have no CPP and other government subsidies, which we should entitle to some.

IMO, aiming at a $2M nest egg is a pretty good goal. Just not necessary at 40 and especially if you have kids to raise.

Here's my take. If you know you ain't breaking the $1m barrier by 65, start blowing your savings at 55. Enjoy your life. By 65 or 70 comes in, start living off the government. You probably won't enjoy traveling Or very mobile by 70 anyway. Get you bucket list done while you can still move and travel and medical insurance is still cheap. The worse thing you can do is retiring in middle income in Canada. You get the same service as the poor but you have to pay for it.

[suntan]

Thank god my wife has a DB pension.

[Xtrema]

Originally posted by suntan
Thank god my wife has a DB pension.

Assuming that DB plan is backed by government or fund managed independent of the business, sure.

If you have DB, health care coverage alone trumps cash.

[codetrap]

http://cdn.memegenerator.net/instances/400x/19109354.jpg

[suntan]

Originally posted by Xtrema


Assuming that DB plan is backed by government or fund managed independent of the business, sure. What other kind is there? :nut:

[Xtrema]

Originally posted by suntan
What other kind is there? :nut:

http://retirehappy.ca/the-pension-problem-are-defined-benefit/

Or I should have said, independent of the business and sufficiently funded.

[ExtraSlow]

Originally posted by suntan
What other kind is there? :nut:
The kind that lots of union jobs have. DB, but nowhere near enough funding. Someone will get screwed eventually.

[suntan]

Originally posted by Xtrema


http://retirehappy.ca/the-pension-problem-are-defined-benefit/

Or I should have said, independent of the business and sufficiently funded. Her pension fund is currently fully funded. She is one of the last employees eligible for the DB pension.