Estimating How Much You Need In Retirement

Estimating How Much You Need In RetirementChart3How much do you really need to retire? Are you one of the majority that either have a large number in mind or do not know? It may not be as bad as you think. What you need is an estimate of your expenses when you retire based on what you spend today, have an understanding of where your retirement income will come from and how you will use your savings. A spreadsheet is provided that will help you and it only takes a few minutes to fill in. You can try different values for capital, interest rates, inflation rate and withdrawal amounts. More

Estimating Capital Totals at Retirement

Estimating Capital Totals at RetirementChart4If you have been putting money into an RRSP, TFSA or other investments over the years, have you ever projected how much you will have when you retire? If you are just starting, what will you have if you save some money each year? This is important because it will determine what is available for a yearly income when you retire. The spreadsheet provided lets you try out different options. The results may surprise you as even a small amount of savings each year combined with compounding can really add up. More

Survey Shows Canadians Are Not Prepared For Retirement

Survey Shows Canadians Are Not Prepared For Retirement1The 2015 Canadian Payroll Association once again shows that about three-quarters of Canadians are far behind their retirement goals, are not saving towards retirement and expect to need a lot of savings. The survey had a lot of exposure on September 9, 2015. However, most of it just summarizes the press releases. If you want more details, read on. More

StatsCan – How Much Do Individual Canadians Make?

How Much Do Canadians Acutal MakeThere have been a number of surveys that deal with how much Canadians are saving and the debt that they have accumulated. However, they never seem to categorize the answers by the income of the person. Statistics Canada has access to data that provides the answer of how much income Canadians actual make.  More

The Minimum RRSP You Should Have

If you will not have a low income when retired and if you will not have other pension income, you should have at least $40,000 in RRSPs when you reach age 71. This ensures that the first $2,000 of payouts makes use of the $2,000 Federal Pension Income Amount non-refundable tax credit. More

Making a Yearly Budget

Keeping track of how you spend your money is important. It helps you save for things that you want and for retirement. There are many ways to do it, including spreadsheets and applications, but if you do it by only watching your bank account, you will not be very successful. This post provides an easy-to-use spreadsheet where you can make your yearly budget plan. More

You Need to Look at Your RRIF Withdrawals

With the 2015 Canadian Federal budget, the minimum payout rates for Registered Retirement Income Funds (RRIF) have been reduced significantly. If you only withdraw this amount each year you might have a much larger capital than you expect when you reach your 90s. If you do not want so much left as an inheritance with the resulting large income taxes you may want to increase your withdrawals. More

Calculating TFSA and RRSP Totals at Retirement

Calculating TFSA and RRSP Totals at Retirement 3If you have been putting money into an RRSP and/or TFSA over the years, have you ever projected how much you will have when you retire? If you are just starting, what will you have if you save some money each year? This is important because it will determine what is available for a yearly income when you retire. The spreadsheet provided lets you try out different options. The results may surprise you as even a small amount of savings each year combined with compounding can really add up. More

Impact of Tax Credits on Average Tax Rate

Impact of Tax Credits on Average Tax RateEach additional dollar you earn is taxed at the marginal tax rate. However, the tax credits to which everyone is entitled significantly reduces the amount of taxes you actually pay compared to the tax bracket values and the marginal tax rates. For example, for income close to the top of the first tax bracket and the basic personal tax credit, the actual average rate is just 72% of the marginal tax rate. More

Estimating Canadian Income Taxes

If you need to estimate your Canadian income taxes during the year before making an investment decision, use the simplified spreadsheet provided in this post. For example, you may have to decide the impact of taking capital gains this year, selling stocks or taking out an RRSP.

More

TFSA and RRSP – Providing a Fixed Retirement Income Using 2015 Rates

TFSA and RRSP - Providing a Fixed Retirement Income2015 1This post describes a spreadsheet that you can download that shows how you can use RRSPs and TFSAs to generate a fixed retirement income each year. You will probably have a number of both RRSPs and TFSAs due to the restrictive amount of money you can invest in the TFSA. Knowing what they can provide as income before the capital is exhausted is critical to retirement planning.  More

TFSA or RRSP – Impact of Reinvesting the Tax Refund Using 2015 Rates

TFSA or RRSP - Impact of Reinvesting the Tax Refund Using 2015 Rates 2As shown in this post, the RRSP tax refund must be fully reinvesting each year if the RRSP is to provide the same income and close to the same capital during retirement compared to a TFSA. Even then, the TFSA is a better retirement option. The spreadsheet used for this analysis can be downloaded so you can try out different conditions such as your own province, marginal tax rate and reinvestment strategy. A major difference between a TFSA and a RRSP is that the RRSP is tax deductible while the TFSA is not and that the RRSP generates a tax refund which depends on your marginal tax rate. More

RRIF Minimum Payout – 2015 Rates

RRIF Minimum Payout - 2015 Rates 1In the 2015 Federal Budget, the minimum payout rates for Registered Retirement Income Funds (RRIF) have been reduced significantly so that capital can be preserved for a longer period of time. This post updates a previous one that uses the old rates. An updated spreadsheet can be downloaded that provides tables and charts that show the impact on capital of the minimum payout for different starting RRIF capital, interest rate and marginal tax rate and includes the impact inflation. More

RRIF Minimum Payout – 2015 versus Old Rates

RRIF Minimum Payout - 2015 versus Old Rates 1In the 2015 Federal Budget, the minimum payout rates for Registered Retirement Income Funds (RRIF) have been reduced significantly so that capital can be preserved for a longer period of time. Instead of a payout of 7.31% at age 71 it will be 5.28%. The reduction in the rate is more than 28% initially going down to just over 20% after 10 years! You can see the impact on the charts in this post and try your own options with the downloadable spreadsheet. More

Managing Expenses and Cash Flow – Part 1: Why

Managing Expenses and Cash Flow 01 CumWhy should you have to record every purchase you have made to keep track of your expenses? Let someone else do it for you: buy everything using plastic or mobile payments (tap and pay). You will then be provided with a summary of the payments by date, vendor and amount that you can access online. Using the Cash Flow method presented here and the spreadsheet included in Part 2, you can simplify the tracking of your expenses with a few minutes of work each month. You can also plan your income and expenses by month, prioritize your expenses, show your cash flow to ensure you have enough money when big bills are due and compare the actuals to the plan. More

Managing Expenses and Cash Flow – Part 2: Spreadsheet

Managing Expenses and Cash Flow 10 ActualChartBy using the Cash Flow method and the spreadsheet included here, you can simplify the tracking of your expenses with a few minutes of work each month. You can also plan your income and expenses by month, prioritize your expenses, show your cash flow to ensure you have enough money when big bills are due and compare the actuals to the plan. While it is recommended that you buy everything using plastic or mobile payments as indicated in Part 1, you can also enter any Transactions that you want. More

Managing Expenses and Cash Flow – Part 3: FinanceBase

Cash Flow Planning GraphThe spreadsheet discussed in Part 2 is very flexible and provides very good insight into how your actual cash flow compares to the plan on the many tables and charts provided. However, there is more that can be done to help you, especially if you have an at-home business or want to keep a long-term record of your income and expenses. If you want a more robust and full-featured application as an alternative to the spreadsheet, FinanceBase is a very good option and is discussed in this part. More

Managing Expenses and Cash Flow – Part 4: Design

While creating the spreadsheet that is provided in Part 2, a number of tricks and guidelines were used that may be of interest to others. Specifically, obtaining the screenshots and making them download as fast as possible, creating line charts that stopped at the current month, deciding what colors to use to ensure there is no confusion when viewing and printing the charts, and the tradeoff between using a single sheet rather than multiple sheets to ensure that formulas are not modified. More

Understanding Your Canadian Sources Of Retirement Income

Understanding Your Canadian Sources Of Retirement Income Chart1When you are retired you will probably have more sources of income than you had when you were working. There will be OAS, GIS, CPP, RRIF, TFSA, Annuity, company pension and investments. You may have all or some of them depending your income and time in Canada during your working life. This post will help you understand how these are obtained and their impact on retirement income and taxes. More

Helping to manage your finances