The Truth About How Much Money You Need To Retire

In this video we'll go through an article by the Canadian Press that says you need $1.7 million to retire in Canada. When articles like these come out, they can often misguide people into thinking that they are never going to be able to retire! My hope by the end of this video is you'll realize that you are probably a lot closer to retirement than you think!

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DISCLAIMER: The videos and opinions on this channel are for informational and educational purposes only and do not constitute investment advice. Adam Bornn is not registered to provide investment advice and as such does not provide recommendations - those looking for investment advice should seek out a registered professional. Adam is not responsible for investment actions taken by viewers and his content should not be used as a basis for investment trades.

[dominiquetheeasyminimalist]

I’m retiring next year at 56 with 300k. But I’m relocating to Mexico for one year, then moving to Asia. There’s no way I could retire in Canada unless I work for another 10 years. Life’s too short to be a GenX Canadian retiree 😁

[robertross]

Fantastic video. It drives me crazy to see attention-grabbing headlines with nothing behind the curtain. You are very good at explaining what's really going on. I saw this headline and shook my head. Thanks for jumping all over this.

[gerardacronin]

Just because people THINK they need $1.7 million does not mean that they are right.

[robertpearson]

When my Mom passed away at age 96 she was still in her own home and required no financial assistance from anyone. My Dad had retired at 56 on far less as an equivalent to today than 1.7 million. They spent years living comfortably, eating and living well and taking numerous cruises and vacations. For the last 10-15 years of her life she required far less money than previously because her ways of spending it diminished considerably. When she passed her estate was more valuable than ever, having grown consistently through good management. People need to get professional advice about their specific financial situations rather than relying on media articles.

[robertpearson]

A couple of years before retirement my Wife was very concerned about having enough to do so and was considering having to work part-time to make ends meet. We consulted a professional financial planner to have a look at our financial situation and we discovered that we were in a very good position to retire without supplemental income and would likely be good for the rest of our lives with proper management. Everyone should get professional help with these things unless they’re well trained themselves.

[johnbrown]

Living like a King on $2000/m in the Philippines. Age 60. Best move ever!

[lawrencetierney]

Being able to retire comfortably is not just how much money do you need.

It is realiant on several factors.

What retirement incomes do you have.

1. Pensions
2. RRSPs
3. Savings
4. Investments

Next

1. How Much Debt will you have when you retire, this includes mortgages and Loans.
2. How Much do you spend to maintain your lifestyle. Do you have a extravigant Lifestyle or a Frugal one.

I was able to retire at age 55 after 38 years in the Canadian Military and I can without a doubt, tell you that my pension IS NOT 1.7 Million dollars.

I retired Debt Free and even though I now have a Small Mortgage it is not a burden.

Financial retirement is not how much you make, it is how much you spend.

[RC-fhlk]

I saw the same BMO article and thought it was kinda ridiculous. My wife and I have lived by the motto of “Do the best you can” in regards to saving and investing. Buy used cars, enjoy dinner at home with exceptions and pay yourself first. In 5 yrs when I retire I’ll be getting a financial plan and will adjust my lifestyle up/down based on what Adam recommends! Have a plan and understand retirement is cheaper than raising a family… it’s not really difficult!

[edprior]

I think the lesson to take from the BMO survey is that every company that publicizes something may have a vested interest. In the BMO example, it is clearly in the financial services interest to have people save and invest more than needed to generate more fee revenue for them.
Kudos to Parallel Wealth for presenting this information and presenting an alternate, facts-based viewpoint

[rogercyr]

Bang on. My 95 years old mother comfortably lives on about $CDN 26, 000/yr in a nice geared-to-income residence in Oakville ON and SAVES money!

[hockeynutt]

Saw this yesterday as well. Complete and utter nonsense. 2/3 of Canadians would be on the street in retirement. Whoever even remotely believes this, do not worry. You can retire on half that.

[elizabethk]

This is people who still don't recognise the extent of their sense of entitlement. I live very well on less than $25, 000 a year. Nice apartment, nice little Honda FIT, eat healthily, take 1 trip a year. Still able to put aside a couple hundred a year. I'm 75, meds-free, and live a life of gratitude.

[macker]

First thing you need to do is calculate what your monthly expenses will be in retirement. Then consider your anticipated income (Savings, CPP, OAS, etc.) and what things you might want to do in retirement. From there you can get a better picture of how much money you will actually need.

[jasonhoffer]

The amount of people I know (mostly middle age men living in Canada) that have just a part-time job(s) making minimum wage, are under employed during what should be their highest wage years, on disability, have little to no benefits provided by their employer and /or other issues that apply is is extremely high. This is why most people I know just ignore these retirement numbers.... Just look at all the elderly cleaning offices at night or are working at Mc Donald's and Tim Hortons is the future for many. Good video btw - just needed to add this to the discussion.

[dmd]

EXCELLENT video Adam....I totally agree with you. Also, if you can delay OAS and CCP ( RRQ here in Quebec) to 67-70, this is a big plus in my opinion.

[neolithic]

I really wish they would make it more clear in the article that the number is simple what your average joe thinks they will need. Not experts, not advisors, not people really knowlegable about financial issues. It's very misleading. The reality is that the average person is fairly ignorant about finances and investments. When I saw this article the other day I had a feeling you would be addressing it!

[rozinant]

Median household income in Canada is about 70K. If you had the same in retirement, you’d be happy. The house is paid for, so you use that former monthly expense to travel. Max CPP and OAS at 65 is about 20K each spouse, total 40K. Shortfall is 30K. Half a million invested at 6% gives you 30K. Verdict, you each need 250K invested. Do-able.

[TwinworldGameReviews]

$1.7 mil to retire is high for the majority of Canada. I can see it for those who live in parts of Ontario, BC, etc as it's quite expensive to live there. With $1.7 mil invested in dividend paying stocks at 5%, that's ~85k per year to live off. That's 7k per month before taxes. With dividends being taxed lower than normal income, taxes would be less on that as well. This is looking at folks under 65 who aren't collecting OAS or CPP. Depending on the province they live in, they could lower their taxes even more since some provinces allow higher dividend income before being taxed. The main thing is to make sure they have no debt before retiring. Many could probably retire early with 500k to 800k depending on their province. There's a few ETFs out there that include covered call strategies, which pay 8% to 14% in monthly income. The distributions are a mix of dividends, capital gains, and return of capital though. Best to keep these in a TFSA to avoid the tax headache. If I was debt free today and had a chance to retire, I'd probably need $4k monthly after tax to be safe (always want a buffer for extra income incase something happens).

[MegsCarpentry-lovedogs]

Yup! Big topic....(apologies for the pun) Very glad you showed one of your higher end earning clients. Variety is important. A lot to realize in these sorts of presentations. 👍💯

[calpine]

We don't usually discuss base costs. I'm not saying $1.7M is the right figure for everyone, what I am asking is does $90K provide an income to meet your expenses and goals? Does drawing $65K in real dollars meet the needs of an 86 year old aging in place or needing a retirement facility in the geography you live within? At the risk of being besieged by the masses, $1.7M doesn't look like a crazy figure (based on where I live...in Ontario).