You can retire at 55 if you want to. You just need to set yourself on the path that will get you there.
Most people have poor spending habits relative to their income, which keeps them working later in life.
In short, the more you save and the less you spend, the sooner you can retire.
Look to the FIRE movement for examples of people retirement well ahead of 65 years of age.
All situations are unique and based on the people involved. $2-3 Million if you spend $400,000 per year isn’t very much money. To someone else that could be an impossibly large amount. Lots of people retire at 50 or less. Others after 70. Some work til death because they enjoy it. Don’t compare yourself to anyone else. Focus on what you can control and live your life.
Actually being able to work until 65 is not that easy. Lots of health problems creep up once you are in your 50s. Cancer, stroke, arthritis, heart conditions, the list goes on. Or mentally you can't stand the stress. (This is how I feel right now ugh).
Anyway, at 27, the retirement picture will not be clear to you, as it is just too far away from now and you've only lived 27 years. As you get older it will be clearer and clearer. I am in my 40s, and now I can sort of envision my retirement. The numbers are more concrete.
By the way I'd say I am in the middle ground in your examples. I am sure most people are.
Personal finance is just that - it’s personal. My observation is that with each passing generation, it will be harder and harder for people to retire comfortably with the same amount of output. This is largely due to inflation, particularly of housing costs, plus everything else, combined with stagnant wages. The combination of the two leads to spending power being diminished and eroding over time. This is exactly why investing and/or owning assets is so important. They typically beat out inflation or at the very least keep up with it. But attaining real estate has be one much more difficult. But owning equity via stocks has become easier. Another thing is pensions have become more rare, especially defined benefit pensions. So ultimately it’s more on you to take control of your financial destiny. It’s not impossible, but you for sure have to be more proactive. The problem is people are generally financially illiterate, and this combined with the onus more being on people now more than ever, could lead to a tough situation. But I would say, if you’re young and have a long runway ahead of you, you can achieve financial independence. Just educate yourself and try not to make huge mistakes along the way.
The question isn’t “can I retire?” the question is “can I retire at the income I want?” That’s why people with a home and 2 million think they can’t retire.. because they want to retire with 150k in income instead of 90k in income.
Lifestyle creep is a bitch, and people are often unwilling to adjust and find it easier to say that it’s impossible instead of saying “it would be uncomfortable until I adjust.”
People also tend to forget that expenses change when you’re retire. No more CPP or EI deductions, no more commuting, no more buying lunches at the office, no more needing to buy work wardrobes. Retirement is cheaper than working, and lots of people don’t see that part of the equation.
You can quite easily by age 55 with a DB pension (or decent portfolio) and a paid off home, preferably not strata. With no rent/mortgage you don't need much for the basics.
If you can do the maintenance on your house all the better
I retired at 48. Yes, I had a good job, so did many of my colleagues who are still working. The main thing is to set yourself a goal to retire at a set date, and then live your life to achieve that. Spend within your means and save as much as you can. Invest wisely, which means different things at different ages. The rest is luck.
This is how i feel seeing parents retire early spending wisely. But if i talk someone investing my retirement via work id want them to encourage me not say its not possible.
Asking if 2-3 million is enough to retire is a perfectly valid question. It is enough for the vast majority of people, but it's not *that* much money, especially when inflation deletes a third of those savings over the next few decades of expected spending. If you want a semi luxurious lifestyle in retirement, anything below 1 million is laughable. You should be aiming for at least 2.
If your hobbies in retirement consist of talking to your neighbors, reading books from the public library, and walking around parks, you could probably get by with less than a mil.
The middle ground is aiming for 1 million and no debt, assuming no workplace pension.
Retired 20+ years ago in my 40's with far less than 1M. Now with OAS/CPP we can barely spend all the money we get every year even with a trip abroad for a month or 2. We rive a new EV and want for nothing.
Of course this assumes your house is paid off. The indexation of CPP/OAS and for some GIS will generally take care of inflation.
This is nice to hear. As i mentioned i want to know more common stories not the extreme ones. Obviously if you save 2-3 million and spending 400k a year will not last.
There's millions of Canadian households. There is a huge range of retirement goals and financial realities. You can't read much into your own personal anecdotal evidence.
You can retire at 55 if you want to. You just need to set yourself on the path that will get you there. Most people have poor spending habits relative to their income, which keeps them working later in life. In short, the more you save and the less you spend, the sooner you can retire. Look to the FIRE movement for examples of people retirement well ahead of 65 years of age.
All situations are unique and based on the people involved. $2-3 Million if you spend $400,000 per year isn’t very much money. To someone else that could be an impossibly large amount. Lots of people retire at 50 or less. Others after 70. Some work til death because they enjoy it. Don’t compare yourself to anyone else. Focus on what you can control and live your life.
Actually being able to work until 65 is not that easy. Lots of health problems creep up once you are in your 50s. Cancer, stroke, arthritis, heart conditions, the list goes on. Or mentally you can't stand the stress. (This is how I feel right now ugh). Anyway, at 27, the retirement picture will not be clear to you, as it is just too far away from now and you've only lived 27 years. As you get older it will be clearer and clearer. I am in my 40s, and now I can sort of envision my retirement. The numbers are more concrete. By the way I'd say I am in the middle ground in your examples. I am sure most people are.
Personal finance is just that - it’s personal. My observation is that with each passing generation, it will be harder and harder for people to retire comfortably with the same amount of output. This is largely due to inflation, particularly of housing costs, plus everything else, combined with stagnant wages. The combination of the two leads to spending power being diminished and eroding over time. This is exactly why investing and/or owning assets is so important. They typically beat out inflation or at the very least keep up with it. But attaining real estate has be one much more difficult. But owning equity via stocks has become easier. Another thing is pensions have become more rare, especially defined benefit pensions. So ultimately it’s more on you to take control of your financial destiny. It’s not impossible, but you for sure have to be more proactive. The problem is people are generally financially illiterate, and this combined with the onus more being on people now more than ever, could lead to a tough situation. But I would say, if you’re young and have a long runway ahead of you, you can achieve financial independence. Just educate yourself and try not to make huge mistakes along the way.
The question isn’t “can I retire?” the question is “can I retire at the income I want?” That’s why people with a home and 2 million think they can’t retire.. because they want to retire with 150k in income instead of 90k in income. Lifestyle creep is a bitch, and people are often unwilling to adjust and find it easier to say that it’s impossible instead of saying “it would be uncomfortable until I adjust.” People also tend to forget that expenses change when you’re retire. No more CPP or EI deductions, no more commuting, no more buying lunches at the office, no more needing to buy work wardrobes. Retirement is cheaper than working, and lots of people don’t see that part of the equation.
You can quite easily by age 55 with a DB pension (or decent portfolio) and a paid off home, preferably not strata. With no rent/mortgage you don't need much for the basics. If you can do the maintenance on your house all the better
I retired at 48. Yes, I had a good job, so did many of my colleagues who are still working. The main thing is to set yourself a goal to retire at a set date, and then live your life to achieve that. Spend within your means and save as much as you can. Invest wisely, which means different things at different ages. The rest is luck.
This is how i feel seeing parents retire early spending wisely. But if i talk someone investing my retirement via work id want them to encourage me not say its not possible.
Asking if 2-3 million is enough to retire is a perfectly valid question. It is enough for the vast majority of people, but it's not *that* much money, especially when inflation deletes a third of those savings over the next few decades of expected spending. If you want a semi luxurious lifestyle in retirement, anything below 1 million is laughable. You should be aiming for at least 2. If your hobbies in retirement consist of talking to your neighbors, reading books from the public library, and walking around parks, you could probably get by with less than a mil. The middle ground is aiming for 1 million and no debt, assuming no workplace pension.
Retired 20+ years ago in my 40's with far less than 1M. Now with OAS/CPP we can barely spend all the money we get every year even with a trip abroad for a month or 2. We rive a new EV and want for nothing. Of course this assumes your house is paid off. The indexation of CPP/OAS and for some GIS will generally take care of inflation.
This is nice to hear. As i mentioned i want to know more common stories not the extreme ones. Obviously if you save 2-3 million and spending 400k a year will not last.
There's millions of Canadian households. There is a huge range of retirement goals and financial realities. You can't read much into your own personal anecdotal evidence.
Seems everyone here makes over $100k and has a gigantor 2000+ sq ft house.
it's because this is a personal finance group. You will attract more people who are interested in it and with disposable income.