Sunday, February 8, 2015

The Perfect Moment...

Once a week or so the perfect moment occurs....the laundry is done (but not put away yet...shhhhh...don't tell anyone), I've had my hike and fresh air, the cats are asleep, supper doesn't need to be thought about yet, the housework is as done as it's ever going to be, music is playing from my iPod in the background,  and with coffee in hand I can relax to do whatever I want...sweet!

Yes, we were walking into the past today...

this area is within city limits...and in my part of the city!...

not a lot of colour this time of year but beautiful just the same
in an austere sort of way.

So, what to do, what to do...

Well, if you're a numbers geek like I am (and I know that you are!!) then you'll search for an online RRIF calculator and figure how much you'll have to start withdrawing from your RRSPs at age 71. Yup, that's what I did too! Isn't it fun??

It's strange to realize that right now I'm living on far less than what I'll be living on when I turn 71. But let me back up a little...in a year and a half, when I turn 60, I'll start to draw on my Canada Pension Plan (CPP); then at age 65 I'll lose some (around 13% I think) of my CPP but will start getting the OAS (Old Age Supplement) and then at age 71 my RRSPs will convert to an RRIF and that will increase my yearly/monthly income. Isn't it nice to know I still have a few "raises" to look forward to!?! I just better darn well live long enough to reap the benefits of my labours or I'll be some MAD!! It would make more sense if I could access all of my money NOW and then have it gradually reduce until I'm in my 90s. Let me use it while I'm still young enough to enjoy it!! But no...as we all know the government doesn't use common sense...

For 25 years (or more) I've done everything in my power (and made a lot of sacrifices) to max out my RRSP room come tax time. I think only once I had to borrow in order to make my contribution. Eventually I got smart (and started earning enough) and made automatic monthly transfers into my RRSP finally getting ahead of the game. 

I've thought about taking money out of my RRSPs and putting what's left after the taxman takes his share into my TFSA but I read an article that said if you have a choice in paying taxes NOW or in the FUTURE then do it in the future. That makes a lot of sense to me. I'll be in a much better position to pay the taxman at age 71 than I am now. So I'll let the money sit and earn interest for another 13 years and then enjoy the bump in income when I hit 71. I have enough in my TFSA for any emergencies that might arise in the meantime and in only 1.5 years my CPP will kick in. 

If these are my lean years I can't wait until my "fat" years!! 





5 comments:

savingfortravel said...

Your trip to England sounds so exciting! And meeting up with NLA Annie too.


Our waterproofs are good windbreaks too, and up on that wall it will be very blowy.


Sft x

Jane said...

I think retirement is a worry for most Canadians..so make the most of it!!
Jane x

kim said...

retirement is a worry for a lot of folks, but I have great kids and so do you you will be fine even though you have planned well.

Michelle said...

Oh Jane! I'm sure you're going to be perfectly fine. You're more than prepared! Now, if you were in our shoes, you'd have cause to be concerned. Using our RRSPs now to get through some rough spots sure wasn't in the plan but as long as ends meet, it's all good.

Sonya Ann said...

WOW, you really look amazing! Honestly, I thought we were the same age and just retired really, really early.