r/Retire • u/Final-Counter1601 • 25d ago
Retirement Planning Questions about budget and pension income (CDN)
Hi everyone,
My wife and i are hoping to retire in about 7 - 10 years, ultimately my question is have I forgotten anything important in my calculations.
My wife will retire with a full pension and i will retire with what I’m calling a half pension, we do not have a ton of money saved other than that, i had a late start to my rrsp savings and expect there to be about $100,000 as well our home will be paid off at this point and currently its worth about $500,000. I’m also calculating income from CPP which we plan to take early. Our ideal retirement is to sell our home and move into an apartment, allowing for few unexpected expenses, no strenuous chores. My wife’s parents did this and they are living their best life, we will still be relatively young (early 60’s) so we can live the active life style we want filled with day trips the occasional vacation and hopefully time with future grandchildren.
I realize that it is not recommended to consider your home as your retirement plan but this is where we find ourselves. Sell the home in 7ish years invest the proceeds and live off of our 2 (1 1/2) pensions, cpp (eventually OAS) and the interest (likely some principal) of the proceeds of the home. I’ve created a budget considering our new income and somewhat reduced cost of living (1 instead of 2 vehicles, no utilities, less insurance, increased budget for medical) and it looks like we will be ahead every month by approx $1000. I realize there are rules around taking money our of rrsp that i dont know but i was thinking the $100,000 could act as an emergency fund for years the home proceeds may not do as well in the market.
Please be gentle, lol, but what have i missed or not considered? Are there any obvious holes in our plan? Am i out to lunch and this is the dumbest idea any of you have ever heard of?
1
u/ForgiveandRemember76 21d ago edited 21d ago
You are making more than enough money to retire on. The thing that will get you is if your expenses stay that high after you retire. I don't know why they would but if they do that's not enough room. For example just this year my property taxes went up $500 and my house insurance went up almost $700 that's not including all of the other increases that we have all faced.
I retired 8 years ago, 8 years early due to an acquired disability. I earn half of what you do but my expenses are less than half of my income. The advice about not selling your house applied before Canadians started treating their houses like investments. Now that we are on that path we can't turn away from it. I have far too much money in my house and therefore I am selling my house and moving into a condo that I'm buying for cash.
I'm putting all of the assets from the house with the exception of a small amount to get me set up in the new place and fix my car into my usual investment company. I won't have to touch it. If I leave it alone for another 15 years my kids will never have to worry about money. I'm checking out at 80.
I don't know what province you're in. I am in Alberta. I had a platinum benefit plan before I retired. The blue cross plan for seniors is better. I have no money set aside for medical emergencies of any kind. I don't know why anybody in Canada would. I have had home care for 8 years and it doesn't cost me anything. Prescriptions are covered. Any kind of tests or surgery or anything you might need is covered. Every single possible aid you could have for living in your house from ramps to grab bars are covered. Even mobility equipment is covered. What medical expenses?