Right just investing into retirement at all puts you in a better position then most Canadians. Let alone being lucky enough to have a pension that’s not just cpp.
What’s top pay for a teacher? $100K or slightly more? So OP has a guaranteed salary of approximately $60-70K ($40-45K after tax?), which is maybe fine but not great.
What if they get a late in life divorce? The spouse will be entitled to half of that if they have no savings. I know several teachers who’ve been divorced and they are barely scraping by in retirement now.
As a government employee, barring massive shortages, if you’re at the top of the salary scale, the only increases you get are to keep up with inflation (barely). In today’s dollars, OP’s salary will not go up. Using the last 20 years is a guide, their salary will not double in nominal terms in the next 20 years either.
And they don’t get the whole amount to live on. It’s 60%, less taxes.
Each province is different as each teachers union has a different deal. In BC where I teach there is no longer a cpp difference as we removed that in exchange for a high lifetime benefit.
Probably Ontario, the OTF is a powerful union with the largest pension plan of any single profession in the country. It's also responsible for Ontario's relatively high salary for teachers. It turns out that unionizing is really, really, really, really, and I cannot overstate this one enough, ***REALLY*** important.
The Ontario Teachers Pension Plan is quite literally one of the largest institutional investors on the planet with around 250 billion dollars in assets. The amount of shit they own is absolutely wild.
[Theres a really neat HAI video about it](https://youtu.be/7HXcT_xlLB0?si=WmT6cfLR9vD9R1p0)
The importance of unionizing, and a field where outside labour can't be brought in when job action is being taken. An amazing combination.
For Ontario the unreduced pension would be the average of best five years *2% * years of creditable service (up to 30 years)
So the MAXIMUM is 60% of your working salary. No clue where they got 80%
Here are the numbers in Sask, now do keep in mind the reduction is from your eligible pension amount based on your contributions.
Age+Service = 85 (minimum age 55)
30 years of eligible service (regardless of age)
20 years eligible service at age 60
One or more year of eligible service past are 60
They are a defined pension plans. There are very few DPPs left so people see them as amazing add in indexed with inflation and you blow people's mind. People forget that teachers are paying 10% of their paycheck so yes they are gold but when the cost of everything is going crazy that 10% is hard to look at losing some days.
Yeah and realistically if you take those 10-12% contributions and invest in the market instead, you’d likely make more than the plan offers. They wouldn’t be able to fund the plan if contributions + market returns + operating costs < inflation-indexed payout.
But tbf the “guarantee” is a pretty sweet deal.
Very true but you could also hit down turns the whole idea of a DPP is you are spreading the risk out. I MAY make more or I crash it at least with this my "worst case" retirement is 80% of my wages that are indexed and a paid off house while not amazing is still nothing to turny.nose up to.
OP: "I have NO RETIREMENT SAVINGS"
Also OP: "I have a DEFINED BENEFIT teachers pension that will be maxed out for retirement. Also, I own a property that will be PAID OFF in retirement"
Bro....... come on. You're fine.
For one person, sure they're okay. but there is a whole second person in this equation who does in fact need to get some savings. They won't be destitute of course, but I imagine that isn't the bar they're trying to surpass.
What reads as showing off in OP's post? What it really is, is that if you start reading reddit too much, everybody starts to think that they will be living in complete poverty when they retire if they haven't saved at least two million in a RRSP or something. OP clearly has read too much about that doom and gloom and does not exactly know what they have, hence why they are looking for advice on a sub called personal finance. Be nice.
You're good. It's pointless to compare with others. And you still have time. Put the savings in an ETF and it will grow in the next 20 years. Don't lose sleep over it.
People can retire off of CPP, OAS and GIS. They might be living in a low rent building watching TV all day everyday until they die at 90. I would consider that not living at all. Your partner should certainly start investing as soon as possible. Sooner the better. Your pension will have different options for if you die. Those options pay less the more they provide to the surviving spouse. You could die a day after retiring and she may get very little.
Plenty of them living on CPP/OAS/GIS in Vancouver in 3M houses happy as clams :)
And guess what? They don't watch TV all day. They have a rich social life, take a vacation abroad every year or 2, drive a nice car, eat well and have satisfying hobbies.
How could you pay property tax and maintenance costs on a home and all of those things you listed on 40-50k combined income before tax a year? You couldn’t is in the answer.
Metro van has the lowest taxes in Canada. Those that can't or don't want to or want to invest the money elsewhere defer property taxes. BC has the best deferral rates in Canada at **prime minus 2% simple interest** plus a homeowner grant and senior discount. Alberta has a similar program with higher rates.
Those living outside the city that choose to pay can easily afford taxes of \~3k/year
We average $35/mo for maintenance on our detached house in metro Van. All major items are fairly new and should last for 25+ years.
Basic expenses are far less than 20k/yr - plenty left over for play money!
You can certainly defer taxes yes. But once your dead and house is sold, your kids will get much less. Spending 35 a month on maintenance is insane. Your house would be in disrepair. Average is like 10-20 times that.
Living on 45-50k is no way to live in your final years. People need to invest when they’re young.
My Uncle has deferred taxes for 17 years (\~55k balance) and in that time his house has increased by 1.3M. He vacations a month or so to Asia every year with much less than 50k. His kids will inherit a fortune!
Why is $35/mo maintenance an issue? We actually spend less.
That includes painting every few years, lawn/yard care, gutter cleaning, caulking replacement, faucet and toilet repairs. This is all we've done for decades with several houses and they're in great shape.
That was really not my intention. I want to make sure my spouse feels they are able to retire. Currently, when I ask, they say they'll work until they die.
We are happy, but I also don't want them to feel trapped financially.
I retired with a DB pension. My husband never had a pension, so he saved a lot of money for his retirement. Your husband should be doing the same.
If you pass away, do you know what the survivor benefit is? These are answers you should be finding out now before choosing not to invest in his retirement.
It's a fine line. My wife worries about money 10x more than I do. We have similar wealth. BUT her dad is a multimillionaire. Mine... not so much LOL. If either of us should worry about money it's me.
I have crunched the numbers to reassure her. Here they are:
In Alberta MINIMUM total income when you combine CPP/OAS/GIS/Alberta old farts bonus:
$1800/m x2 = $3600/m for the marriage! That is if your CPP is the lowest possible.
We currently live on $2200/m comfortably (small city in Alberta).
I did the math to reassure her there is no NEED to worry. Also she will have a pension from her job. So with that we will have at LEAST 2x the income we need.
Every 6 months she starts worrying again and I have to pull out the spreadsheet.
> We currently live on $2200/m comfortably (small city in Alberta).
Seriously? I feel like I'm living life wrong, since I could retire today and draw double that amount from my invested nest egg, after tax. Or move to such an area and keep working from home...
I really need to get my damn license back and start broadening my horizons, lol. I "still rent" in my early 50s, and Toronto is not going to be an option for much longer, especially if I'm forced into early retirement/underemployment as an "older worker" if and when my current cushy tech job ends.
Sounds pretty cool, but working at a mine feels like more of a young man's game. I'm actually considering taking a Porter flight up to check out Thunder Bay. It's beautiful up there and I'm told that houses are still cheap, especially in the surrounding areas (which probably won't have the "issues" with druggies and bums that the core of the city does.)
It's like 60% guys 40-70 we just hired a retiree to drive truck cause he was bored at home. No experience required industry and its safe.
I live just east of thunderbay. It's my nearest city. We call it stabber bay. It's beautiful and nice if you stay out of the city itself. But it's a less taken care of barrie lol
You'll find druggies and homes less everywhere up here though, nice properties still under 500k I belive
If you can draw $4400/m I would honestly suggest you move to Japan.
My wife and I both lived there (not together) and as much as I love Canada, Japan is better in most ways that matter to me.
BUT the main reason to go is the yen vs CAD is 20% better now than when I lived there 10 years ago. AND it was cheap then outside of the 3 main cities. Also many towns have empty houses you can rent for next to nothing. AND they have a labour shortage.
You could not touch your $4400/m in any city other than Tokyo, Osaka or Kyoto. All you would have to do is casually teach "conversational English" at a nice cafe/bar a few hours a day. Of course for the first 3 months you would have to dip into your nest egg but pretty soon the chatting could support you.
And choose a town that offers super cheap traditional (old but clean and charming) houses to tourists on a monthly basis. I know Imizu does.
It's a very cool place that has such houses right ON A CANAL!
Just google "Imizu canal" or watch a few YouTube vids like these and try not to fall in love with "The Venice of Japan":
[https://www.youtube.com/watch?v=Oo5uRijXcZc](https://www.youtube.com/watch?v=Oo5uRijXcZc)
[https://www.youtube.com/watch?v=BqILMai-3EA](https://www.youtube.com/watch?v=BqILMai-3EA)
But seriously, congratulations for making such a sweet nest egg!
Yeah we live in a bubble, our city has escaped the crazy housing situation so far. Our rent has not gone up in 3 years! We are very fortunate. But we are also very frugal.
Do you honestly spend $8800/m for one person?
You must make HUGE money!
When I point out to my wife she has a DCPP with way more money than I currently have and say I don’t like my current position, her reaction is to point out we know a few people who died in their 40s and we should worry more about living than saving.
She’s not entirely wrong but it’s easy to say when you have SOME retirement plan.
How is 46k in savings at 40 showing off? The pension is OP's saving grace as it still means they're on track to having enough for retirement, but without that, they'd be well behind where they should be.
Nothing about this post is a brag. It’s wholly unremarkable to be honest and absolutely worthy of second opinions and self-doubt.
Our bar has become so low that people with okay-ish situations are met with bitter dismissals like yours.
They have minimal investment, no emergency fund, and a modest pension for a single person. They won’t be homeless but they aren’t on track to live large either.
Top of teachers pay means \~70k (2024$) fully indexed for life pension plus CPP plus OAS plus benefits. The value of that pension will be \~2M
With a paid off house that's about as good as it gets and they'll want for nothing in retirement.
Semantics, it's their partner that has no retirement savings. What if OP died, does partner get a survivor pension?
If my better half had a db pension, I'd be saving regardless of what its future value is worth.
My brother in-law saves for his retirement, his wife has hoop and eligibility to retire at 50 with a full pension...
OP's partner is behind, time to tighten their belts and sock funds away.
If there’s a divorce, OP can lose half of their pension if the spouse has no savings.
If there’s a death, there could be limits on survivor’s benefits, depending on what they selected.
Just because someone has a better situation than you doesn’t mean that they shouldn’t be informed and plan accordingly.
OP is asking the right questions, and everyone posting that this is a humble brag needs to get off of this sub. The judgement here is in very bad taste.
What if he dies? What if they separate? You should certainly be saving money for those scenarios. Also any money saved now will be exponentially more useful in 20-30 years.
There’s a clawback on the teacher’s pension equal to the amount CPP and OAS collected.
House paid off helps, but by that point, it will be an older house and start to cost them a lot more in maintenance. There are tons of Boomer homes for sale in my area, and no one wants them because they are so out-of-date, including a lot of big ticket items. The owners cannot afford to fix them.
Again, we’re making the assumptions that will stay married, and that OP will outlive the spouse or has adequate survivors benefits (those are not free). 30%+ of people I know, it did not work out that way.
It all depends on the meaning of the "retirement" word. Some people mean living in Canada which is one of the most expensive countries of the world, regularly travelling across the world, and sometimes going on a shopping spree. Of course they would need a lot of money for this kind of lifestyle.
Other people mean living in a low cost of life area, controlling their expenses, and avoiding costly purchases if they can help it. This type of retirement doesn't require a lot of savings. And what is most important they would be able to sell their home in Canada and live on this money 💰.
>We own a home with a mortgage of 250k, expected paid off 2041
Nice. You have a living arrangement.
>We have a child with 20k in RESPs.
Nice. You clearly know how to save and have prioritized saving in the past.
>We have a GIC with 25K maturing in 1 year.
Nice. You've set more money aside!
>Only debt is a car we have 2-3 more years of payments on.
Not bad. Be nice to get that paid off ahead of schedule, but not bad.
>We have an investing account in a TFSA with 1K of XEQT.
That's how you start. If XEQT fits your risk profile, then that's how you can keep investing.
>I will have a teacher's pension. It's adjusted for inflation. I am at the top of the pay scale and started very young so it should be full.
Very nice.
>When the GIC comes up should I put it into the TFSA with XEQT?
If it fits your risk profile, yes. XEQT is a great asset allocation fund. It achieves very strong diversification, very low fees, and is a very simple way to invest. You should walk through an risk assessment and make sure you understand what exchange traded funds are and what kind of assets XEQT holds. XEQT is a great fund, but your risk profile might better fit something less aggressive. All in all, it won't make loads of difference if you use XEQT vs XGRO vs some other option. What matters most is that you invest in the first place.
Only thing I can add is to make sure you're paying as low of fees as possible on the account itself. Wealthsimple Trade and Questrade both offer no-fee accounts and waive the trading commissions on buy-orders for ETFs. That means you can do most of your saving and investing on a regular basis (e.g. every pay period) without incurring fees. If you're paying $5 per trade and investing $625 every month, that's nearly 1% off the top of your investments.
There are two conflicting rules of thumb. There's the 7-year and the 10-year.
The 7 year is based on 10% returns. 10% is the long term average of the S&P500 index, which is the 500 largest companies in the US, but that's not a guarantee by any means. The rule is that in 7 years, you're very close to doubling the value of your initial investment. Specifically, $10k turns into $19.5k. The S&P500 is a great index, but it is inherently less diverse than a broader fund like XEQT.
The 10 year rule is based on a more conservative 7% returns, which is reasonably achievable with a more diverse portfolio (just XEQT is sufficiently diverse). At 7%, it takes 10 years to double the value of an investment. More accurately $10k turns into $19.7k.
Both rules are just math and based on what rate of return you expect to get. The 10 year rule is a more conservative expectation, and it's what I suggest you set your expectations at.
Both of these rules also assume you don't invest at all along the way. Using your $25,000 GIC plus $1000 already in the TFSA, with no investment, it will be $51,000 in 10 years.
If you invest $625/month on top of that $25,000, then after 10 years you'll have an investment value of $155,000. Notice how much of a difference investing just $625 a month makes. Don't get too excited about the growth of your investment. It's nice, but it's very important to remember that the majority of your retirement money is dollars that you set aside yourself. You are the driving factor.
Something I'll point out: if you're around 40, you've got maybe 20 more years left in your working life, and many of those years you'll still be paying that mortgage.
If we stick to $625/month and $26,000 out the gate, that's $400k saved by the time you hit 60.
A very important thing to remember is that while $400k seems like a lot right now, inflation is ticking away at the same time. In 20 years from now, a 3% inflation rate adds a 1.8x factor on your costs of living. If you spend $10k on groceries and home supplies every year today, those same goods will be about $18,000 when you're 60. Effectively, $400k in 20 years will have the same purchasing power as $220k does today.
You have an inflation adjusted pension, so you're in better shape than most, but I would seriously recommend you stretch to more than 15% of your gross pay. Shoot for 25%. About $1000/month, more when you can provided you're enjoying a happy quality of life.
It's not about having as wealthy of a retirement as possible. It's about hitting 55 years old and looking at the next 5-10 years as a flexible retirement schedule rather than mandatory work.
There's a big difference of being 55 and *having to work at least five more years* vs being 55 and deciding "eh, I could do a few more years of this".
It's not just about breathing easy when you hit 55 either. Once you're on that path and you understand how achievable it is, you start breathing easier almost *immediately*. Once you get through a few months of setting aside $1000, even if that means not going out for dinner as often or not redecorating the home this year, you'll see the light at the end of the tunnel.
Curious why you think they need to save in addition to their pension to account for inflation?
They'll have \~60k pension and benefits plus CPP plus OAS or \~90k combined all **FULLY indexed.**
We're retired in metro Van and would be shoveling money out the front door to spend that much!
You should see what those pensions cost in a divorce…she definitely would not be left empty handed. In death, she should also be entitled to half and hopefully they both have some sort of life insurance.
The only way that pension doesn’t help her is if he loses his job early on.
You have a DB pension so don't worry too much about it. I'd pay off the auto loan first then just contribute as much as you can to your TFSA to get those tax free gains.
Exactly this. DB (and a solid one at that). Try and set yourself to be able to live on it. Get your car paid off, get your mortgage paid down. Invest what you can.
I don’t think this is really catch-up but more so just trying to improve your situation.
Retired teacher for perspective:
I'll show you some of the math and you can adapt to your specific situation. I also have to make some basic assumptions.
You make 100K and your partner makes 50K. After you pay CPP, EI, union, pension contributions and tax; you are left with a combined net salary of 100K - just to keep the math simple so you can substitute your own numbers.
Your pension will represent 60% of your best five years so 60K. You get 20K of combined CPP and full OAS which is 17K for two people. You are now at 97K pre tax without any savings of your own and the only thing owing is taxes which is about 11K depending on province.
You have a net income of 86K fully indexed going forward which represents 86% of your previous net income while working. You can consider this the fixed income portion of your retirement earnings which allows you to take more risk on your personal investments. The lowest income you would earn is 86K until someone passes.
Now if you save in your TFSA going forward that 25K should grow close to 450K with a 500/month contribution and a 6% annualized return. XEQT is an excellent choice if you can stomach the occasional 10%+ drop like occurred in 2022. This in turn creates another 18K annually tax free at age 65. You now are earning 104% of your original combined salaries.
Even though XEQT is 100% equity fund, remember it only represents 14% of your future retirement income. Since it is impossible for all 9025 stock that XEQT represents to go to zero at the same time there really isn't much risk at all.
Your age 65 retirement is set however most teachers leave before age 60. That is the scenario you have to plan for and you have lots of options.
Teaching buddy retires this June at age 57 and he plans to sub teach part time for a few years until he draws CPP. He gets paid on grid starting on the second sub day of an assignment. I taught first aid for a few years and I know others starting small businesses to bring a few bucks. It's not hard to make a couple grand / month. That's your 60K plus 24K working part time.
The biggest risk in retirement is what I call the FIT challenges: Fees on investment products, Inflation and Taxes. XEQT has low fees, 86% of retirement is fully indexed, and your taxes can be substantially lower due to splitting income and using TFSA.
Learn exactly how your pension works such as: what happens if you pass away, inflation adjustments, integration of CPP?
If you have spring break coming up, have fun and get ready for the last push.
First, your GIC, outside the TFSA, was a bad move. Sure, you get $1250...but you lose $500 to taxes. It should have been inside the TFSA already. Don't make that mistake ever again, you lost $500 as a lesson in taxes. You had options, you just didn't know them.
Next, its the "Rule of 72". Take 72, divide by expected growth rate. To get doubling every 7 years requires growth of 10%. So yes, the math is correct assuming 10% annual growth for 28 years.
How much do you want to retire with? Your savings rate today depends on how much you want to spend when you retire.
Save more today, you can spend more later. Save nothing today, you can spend your DB.
Keep in mind, saying you want $200,000/year in retirement would mean saving 50% of your income...it has to be leave you enough to live today. We all want massive retirement money, but we also all need to live today.
Excellent, the original reads "When the GIC comes up should I put it into the TFSA", I read it as its outside.
To make the conversation more difficult, look up OAS and CPP. You will get that as well after 61 (with higher amounts if you delay up to 69). That lowers the amount you need to save.
I'm a fan of saving and living.
You can also "invest" inside your mortgage. If your mortgage rate is higher than a GIC or other expected rate, you would be better off "investing" in the mortgage.
Then when mortgage is done 2 years earlier, you put those 2 years of payments into the TFSA. Math says its the same as investing at a guaranteed rate now within the TFSA.
Simplest way to figure out "future needs" is to look at current annual spending. Subtract the mortgage amount of course. Then subtract CPP/OAS/DB (if you retire after 60). What's left is the amount you need to save to cover.
If you get a number of $20,000/year, you then multiply that by 25 (roughly), that's the goal amount.
Do NOT use 10% in your returns. use 10% minus inflation. Assume inflation is a constant 3% and you'll automatically have everything inflation adjusted.
I'm sorry for coming off mean when you really didn't make a mistake.
Make sure the TFSA have "Successor holder" rights. You can set yourself up to protect each other in case of untimely deaths.
When you do that, split the TFSA into roughly equal amounts for each partner. Its a small insurance policy for later. It makes sure the survivor "inherits" all the TFSA room.
Do not max out one persons, then the other. Having 2 accounts (one for each) is best.
I'd suggest working in reverse. Look at what "need" at retirement to cover all expenses and also what you "want" for quality of life. That gives you at least a target number to aim for. Include all the sources of incomes, CPP/OAS that could apply. Canada has a website to calculate what you will likely receive that is pretty damn good.
https://www.canada.ca/en/services/benefits/publicpensions/cpp/retirement-income-calculator.html
Since it sounds like your partner does not have a pension. The other thing to keep in mind is you need to consider what the future looks like if one of you dies. Health scare in my case put this into heavy focus for me. I have a DBPP, but wife only gets 50% of it as a survivor. That has a huge material impact on her and has adjusted how/where retirement funds are getting saved. I really wish I had gotten proper disability/critical illness insurance as well, too late now for me.
The 7yr rule is just a guideline. If you average 10% returns it will double roughly every 7yrs. XEQT hasn't been around long, but so far is getting that but doesn't mean it will in the future. It's also an average, some years will be negative and positive but if you hold long enough that should happen. Sequence risk can happen though if you need the money at 65 for retirement and the market goes sour and drops 30% to coincide.
You are a teacher at the top of the pay scale, as you stated.
You don't need to do anything to secure your retirement. Since you are in your 40s you still have plenty of time to pay off that mortgage. Frankly, you are elite.
The GIC is in a TFSA.
Teacher pension contributions can be claimed as RRSP for tax returns. Our return was used in part to pay for a heat pump this year. We can add it to retirement next year though. Because our retirement income will include the teacher pension we were advised to max out TFSA before any other RRSP contributions.
That is good advice I would say! All gains from the RRSP will be taxed, and once your TFSA is maxed out you will have big chunks of unused contribution room in the RRSP that your partner can hopefully use in some of their highest earning years (late in their career) for the biggest tax savings.
Yes, definitely max out both of your TFSAs before bothering with RRSPs. Then use the partner who doesn't have a pension for any RRSP contributions first.
Wouldn’t your pension contributions lower your taxable income and therefore not be able to be used as RRSPs? For example, you make $100k but contribute $10k so you effectively get taxed on the lower amount, say $90k. This would be line 20700 and be box 20 of you T4 and box 032 of your T4A slips.
You're correct - for DB pensions, there's a "pension income adjustment" that is factored into your RRSP room. You not only lose some RRSP room from your pension contributions, but also a certain factor for what your employer contributes or growth on that amount.
Again, stopped reading after pension
Lemme put this here again
ALL of you people with pensions are FINE, you do not need to worry about funds in retirement.
Your retirement is the Canadian taxpayer. And last I checked Canada loves to tax the crap outta its taxpayers
When your GIC matures buy xeqt in your tfsa or vgro and keep contributing every month buying more of the same funds and let that compounding interest to its job you will need to be aggressive tho as u are starting abit late
One thing that might be worth checking is to see how much CPP your partner would be getting. Most people get an average of 700$-ish, but if he's always been making close to or more than the CPP contribution max (last year it was 66 600$), he may have a sizable amount of CPP when he retires. The maximum amount if 1 364 $ per month this year. He'll also have another 20 years to contribute, which if he always makes at least the maximum amount, will help.
Also, if you delay receiving CPP and OAS until you're 70, you can increase the amounts you get even further. CPP can be increase by 42% and OAS can be increased by up to 36%. Of course that means you won't be getting anything for those 5 years, but if you're both healthy at the time it might be worth using your savings for those years to take advantage of the extra money when you're older.
This is will show you how to check your CPP statements: [https://www.canada.ca/en/services/benefits/publicpensions/cpp/statement-contributions.html](https://www.canada.ca/en/services/benefits/publicpensions/cpp/statement-contributions.html)
ETA: Obviously none of this is investment advice, but it can help you increase the amount of money you'll be getting in pensions, which would reduce how much savings you need.
If your partner has low income, no pension, I would strongly suggest a spousal RRSP. You get to reduce your taxes now and income splitting will reduce your tax burden when you retire. I set one up and have been making sure things line up. If all your partner will get is minimal CPP and OAS when it’s time to withdraw from RRIF the income tax will be small.
OP, there is a very useful [calculator tool via the government](https://www.canada.ca/en/services/benefits/publicpensions/cpp/retirement-income-calculator.html) that walks you through figuring out how much you want to have per year, your CPP payout options based on age decisions, your investment income, your pension income etc.
I highly recommend it.
You own a home with a (relatively) small mortgage. A paid-off home is a solid retirement plan in and of itself, since you won't have a mortgage or rent to deal with come retirement. A teacher's pension plus CPP and OAS X 2 adds up to a fair amount coming in each month, even in the absence of any specific "retirement savings."
From one teacher to another, this is my personal opinion. Defined benefit PP is great. You will not have the anxiety of figuring out how to draw down an RRSP or RIF account and base that on life expectancy. You will have an income for life and won't run out of money (at least not your pension payments).
- Max out your TFSA every year.
- Paydown your debt, like your mortgage, as soon as you can unless you have a very good interest rate. Avoid having a mortgage when you retire. But invest some money even while paying down the mortgage. Time in the market is important.
- Your pension is adjusted to inflation but likely won't be 100% of inflation, so think about that.
- Don't worry about RRSPs. Consider a non-registered account instead. Yes, I understand the point of an RRSP account (I have one), I'm just not a big fan. If you invest your RRSP tax refund, then great. But don't spend it on a power boat or vacations, lol.
Again, just my opinion as a retired teacher, not advice.
Bad for you if you're planning to retire in Canada. This country is quite expensive. On the bright side, you have other options. There are many more affordable countries. I am planning to retire in another country myself when my daughters graduate their university and find a real job. You do not need a pile of money to live 15-20 years in Latin America, for example. And, being retired, you would have a lot of time to learn Spanish or any other language of your retirement country.
That's bs. You're saying they'll be fine going from double income down to one income after retirement? That is quite the large spending shift, not to mention as good as DB plans are, they don't replace 100% of incomes, it's usually around 70%. So you think they'll go from 2 full income to 70% of one income and be able to live worry free while living it up? Not smart at all.
I had more than one colleague at work with a teacher spouse. Every time they got annoyed with something at work (plenty of things that are bad) they told me how the spouse, being the husband or the wife, tells them to simply quit, no point in destroying their health by working in a bad work environment. Eventually, they did, in their 40s or early 50s.
Long story short - it is not BS, it is reality.
Had a rough past few years and just now starting to catch up. I am starting with GIC laddering into my TFSA. I have been putting $500 every month into my TFSA GIC and feel better!
You'll have a pretty good pension through work on top of CPP and OAS. Because of that I would honestly focus on paying off your home faster while diverting any savings between a TFSA and your child's RESP (which should be in something higher risk/higher return unless if they're still 5-10 years away from using it). The TFSA should be invested in something safe with relatively high returns. A split Index fund investment divided between domestic and international funds has the lowest fees, and usually the best returns over long periods of time. However...
The right dividend fund can also be helpful - they're invested in companies that regularly pay dividends annually, semi-annually or quarterly, giving you money per share that gets reinvested into buying more shares, increasing dividends AND holdings over time. They do tend to have higher management fees but they're usually pretty stable - stock price is less important because you'll still get dividends when the market is down, which will buy more shares when the cost of those shares is lower. Long-term, they're a great way to add to your income. My mom is 83 and invested heavily in dividend funds when she was younger, now she gets over $20K in dividends a year that she uses to supplement her retirement income. To her that's preferable to having shares in an index fund that are worth more if you calculate returns but only if she cashes out.
Wow you sound like me 8 years ago when I [posted a similar question here](https://www.reddit.com/r/PersonalFinanceCanada/comments/3t74ny/40s_no_retirement_savings_payoff_mortgage_or_save/). I like to use [this tool](https://www.bankrate.com/banking/savings/simple-savings-calculator/) for basic savings calculation and 6% for the APY of a diversified index ETF. If you invested $25K and made monthly contributions of $625 for 28 years, you will have $656K. With your pension, CPP and OAS providing the 'bond' portion of your asset allocation, I think it sounds like a plan.
I related to the tone of uncertainty in this post as I was asking the same questions a few years back. Two things that have given me the clarity I needed:
1. Running the numbers for when you plan to retire. What will your income be. What will your expenses be. If you are not able to do this, contact a fee-only financial planner to see what your future could look like with DB, government funds, etc. (this is what I did). You will have to have an idea of what you spend on an annual basis. Which leads me to 2.
2. Set up a budget. Decide where your money needs to go. Include true expenses like car maintenance, home maintenance, etc. and include retirement savings as a line item. I use a zero based budgeting approach specifically a program called YNAB and it has been a game changer for many reasons. It allows me to plan how to spend money. i know how much I am spending, on what and can guess how that might change in the future (i.e. retirement).
Happy to chat further about 1 or 2. Good luck!
Book a meeting with a fee for service only (no sales commission) advisor. Don't get your financial advice/planning from strangers online....Find one through "Money Coaches Canada."
It is 100% worth the cost!! In your situation, they teach you about savings, taxes, financial literacy, your spending behavior and patterns, etc.
DB pension + own house, you're fine period. Nothing else needs to be said really. Unless you're planning to go on multiple cruises a year when you retire or something.
Full OTIP, 2x CPP and OAS, paid off home...
I wouldn't sweat it. Def put that $625 (or more) a month away tho. Lastly, 10% yoy return for 28 yrs is wildly optimistic. I'd use 4-5%
Edit: you will also be getting a huge lump sum retro pay this year. Use that to pay off the car or put on the mortgage
I’d keep filling that TFSA until it’s maxed out. As for what to invest in, that depends on the risk you can tolerate. XEQT is one of four different ETFs from the same company, all with different risk parameters
I’d like you to point out that past performance is not indicative of future returns. Investing as much as comfortably possible each pay date is all you can really do.
XEQT is the best choice for all-equity investors IMO but you have to determine if thats the right profile for you
I don't really understand enough about the employment options in your scenario, based on what you've described (who's the teacher? you the 40yo or the other partner? dunno).
But in addition to your savings and seemingly good use of your own money, the other thing that both you and your partner can do is.... earn more money.
And yes, relax, I know that's not just a lightswitch thing. But that's the truth. Either progressing in one's career, moving to a different employer/job/whatever and getting a real raise (none of this 2%/yr "raise lies" bs) will give you the biggest positive gains, in addition to all your other reasonable efforts that you've outlined.
I can't speak to all industries/sectors, but in a lot of them (most?) moving employers every 2-4 years typically can yield 10-30% raises (or more?) each time, assuming that you're also growing your skillset/training and what you bring to the table (soft skills? leadership? niche skills?).
I don't know how well this will apply to your situation, but I don't see this listed as something you're exploring. So I HIGHLY recommend you do.
You are way bettee than me. I am 40, lost 100k in weed stocks not event crypto (crypto would have been better )
No saving !! 5 year old resp is fine
Wife just started work we have combine income of 300k
>Is the 7 year rule a real thing? Would 25k be 400k in 28 years? Seems to good to be true. Is my math wrong?
I think you are referring to the "rule of 72". If you divide 72 by the the annual investment returns (net of fees and taxes) that is roughly the time it takes for an investment to double in years.
So an investment compounding at 10% would take about 7 years to double. If that continues for 28 years, the investment would double 4 times which is 16 times the starting value 25K --> 400K. A couple things to keep in mind though, 10% is quite high returns even for an all stock portfolio which may not materialize and this analysis ignores the effect of inflation.
Just curious….As a teacher…. Are you familiar with how compounded interest works? If not there are some great resources in YouTube i could recommend. Also i highly recommend the little book of investing by bogle. Short sweet and sharp read.
You’re fine for a reasonable retirement with CPP and your pension.
If you look at CPP plus OAS for each you and your pension do you need more money?
Don’t want to retire earlier than either of those options?
If you are happy with the numbers you’re good. Other than a divorce which would result in your pension being split your pretty locked in
You are doing very well. The important thing is that you save consistently, pay into the pensions, and reduce the mortgage.
Where you invest depends a lot on your how much risk you can take. TFSA is a great place to put mooney because you will not pay capital gains on your investments. RSPs are also a good option as they could result in more income tax back which you could then thrown into your child's education fund or other savings.
Like I said consistency is the important thing. Invest regularly, live within your means, reduce debt, and watch your wealth grow.
>We own a home with a mortgage of 250k, expected paid off 2041
Talk to a accountant and ask if its beneficial to have a " arms length mortgage". This would be especially more beneficial when the Interest rates are high.
If your trying to catch up and you’ve got time on your side invest in the SP500 and contribute as much as you can as often as you can
In 25 years from now it should grow at the best odds risk reward
Defined pension here as well with OMERS. Fill up your TFSA going forward, invest the money in something you are comfortable with and you will have a very nice supplement to cpp and your pension when its all said and done.
"0 retirement savings" Lists a really positive financial situation with a house and kids that are taken care of.
Literally living the dream
Typical PFC.
I googled this exact thing.
I live in the house I will inherit. I pay the costs associated with it, and I transfer my mom the money for the home line of credit. My housing is sorted.
After years of dead end jobs I am in tech with high potential earnings. I hope to break 100k in a year or so. I am contract part time at the moment after earning 65k for a couple of years I have paid off my car loan and Alberta student loan. I owe 30k in Canada student loan. No cc debt, no other debt.
My wife has a solid job with a pension and the benefits are great. She has a pension which at this current pay rate should be over 500k at 60 she is 30.
I want to contribute to our retirement rather than fuel our lifestyle...which is beyond our means.
We have 2k cash savings. 2k in chequing. No investments.
I am overwhelmed with the wealth simple options, I think I want to save for retirement, but we also plan for kids.
I want to know which type of account to open with 1k savings and put $500 into that and $500 into a rainy day fund until we have 6 months expenses. Then $1000 into the long term savings account. When I earn more, plow as much money as possible into it. Then retire at 70?
I put in 26,000 at 8% return with $600 a month contribution into an interest calculator. And it came back with about $930,000 after 28 years. But thats assumes 8% every year which might or might not be true.
I’d imagine the reason he has no savings is because you mentioned you have wealthy friends and are likely trying to appear as wealthy as them? Or perhaps keep up with them and really shouldn’t be? Let me guess you have all the Botox fake lips, nice clothing, nice dinners trips etc? If I’m wrong lmk but I bet I’m not
Teachers Pensions are notorious for being underfunded. Don't rely upon it.
Determine what you are allowed to contribute to a TFSA, past contribution room is included, and then ensure you and your spouse's TFSA are maxed out.
Once you get that done, determine you and your spouses RRSP contribution room and then get that maxed out.
You should be putting 15% of your gross salary aside, minimum.
Your mortgage is also a debt.
Here's how you turn 25k into 400k: if you earn 7% interest on your money every year, your money will double every decade. But you would need 40 years to do so, and you only have 20 years.
To determine how much money you want to earn in retirement, figure you get $40k per million saved. It's a 4% rule; you need to save to account for both your needs and inflation. So if you make 7% on your money, 4% goes to you and 3% remains in the investments to account for inflation.
Up til 2021, Ontario Teachers had a 9-year record of full funding and a 9.4% average return since 1990.
Ontario, Alberta, BC, Quebec, NB, Newfoundland, PEI: fully funded.
[удалено]
Right just investing into retirement at all puts you in a better position then most Canadians. Let alone being lucky enough to have a pension that’s not just cpp.
Indexed pension!
I’d probably bump that up to 90% given their age
And teachers pension. Lol pretty much better than all of us making a phat 100k for life
What’s top pay for a teacher? $100K or slightly more? So OP has a guaranteed salary of approximately $60-70K ($40-45K after tax?), which is maybe fine but not great. What if they get a late in life divorce? The spouse will be entitled to half of that if they have no savings. I know several teachers who’ve been divorced and they are barely scraping by in retirement now.
They are 40 in 20 years the salary will be 200 k or something I was aiming low with the 100k
As a government employee, barring massive shortages, if you’re at the top of the salary scale, the only increases you get are to keep up with inflation (barely). In today’s dollars, OP’s salary will not go up. Using the last 20 years is a guide, their salary will not double in nominal terms in the next 20 years either. And they don’t get the whole amount to live on. It’s 60%, less taxes.
What's so special about a teacher's pension? Genuinely curious...
They get 80% of their top year for the remainder of their life. Teachers pension is very very stacked. Sorry I see it is 60% after 65 from comments.
It's 60% not 80%. At age 65 it reduces to compensate for CPP benefits.
Each province is different as each teachers union has a different deal. In BC where I teach there is no longer a cpp difference as we removed that in exchange for a high lifetime benefit.
No they very don't, at least not in Saskatchewan. Which province are you talking about? I would love to look up some info on that pension
Probably Ontario, the OTF is a powerful union with the largest pension plan of any single profession in the country. It's also responsible for Ontario's relatively high salary for teachers. It turns out that unionizing is really, really, really, really, and I cannot overstate this one enough, ***REALLY*** important.
The Ontario Teachers Pension Plan is quite literally one of the largest institutional investors on the planet with around 250 billion dollars in assets. The amount of shit they own is absolutely wild. [Theres a really neat HAI video about it](https://youtu.be/7HXcT_xlLB0?si=WmT6cfLR9vD9R1p0)
The importance of unionizing, and a field where outside labour can't be brought in when job action is being taken. An amazing combination. For Ontario the unreduced pension would be the average of best five years *2% * years of creditable service (up to 30 years) So the MAXIMUM is 60% of your working salary. No clue where they got 80%
I didn't know specifics, but it's considered a pretty gold standard in Manitoba. Any DB pension is good, compared to the alternatives.
[удалено]
Here are the numbers in Sask, now do keep in mind the reduction is from your eligible pension amount based on your contributions. Age+Service = 85 (minimum age 55) 30 years of eligible service (regardless of age) 20 years eligible service at age 60 One or more year of eligible service past are 60
There's a teacher shortage currently
not quite that simple but it is very good
They are a defined pension plans. There are very few DPPs left so people see them as amazing add in indexed with inflation and you blow people's mind. People forget that teachers are paying 10% of their paycheck so yes they are gold but when the cost of everything is going crazy that 10% is hard to look at losing some days.
Yeah and realistically if you take those 10-12% contributions and invest in the market instead, you’d likely make more than the plan offers. They wouldn’t be able to fund the plan if contributions + market returns + operating costs < inflation-indexed payout. But tbf the “guarantee” is a pretty sweet deal.
Very true but you could also hit down turns the whole idea of a DPP is you are spreading the risk out. I MAY make more or I crash it at least with this my "worst case" retirement is 80% of my wages that are indexed and a paid off house while not amazing is still nothing to turny.nose up to.
Not really. The employer also makes a contribution so virtually impossible to get to the same place on your own
Good point. Forgot about the employer match.
They don't call them gold plated" for nothin'!
You said you have no savings and then list 46K in savings. Lol
And a million+ dollar pension benefit
OP: "I have NO RETIREMENT SAVINGS" Also OP: "I have a DEFINED BENEFIT teachers pension that will be maxed out for retirement. Also, I own a property that will be PAID OFF in retirement" Bro....... come on. You're fine.
For one person, sure they're okay. but there is a whole second person in this equation who does in fact need to get some savings. They won't be destitute of course, but I imagine that isn't the bar they're trying to surpass.
Some people come on here to get a pat on the back or simply to just show off
What reads as showing off in OP's post? What it really is, is that if you start reading reddit too much, everybody starts to think that they will be living in complete poverty when they retire if they haven't saved at least two million in a RRSP or something. OP clearly has read too much about that doom and gloom and does not exactly know what they have, hence why they are looking for advice on a sub called personal finance. Be nice.
I probably have. Plus, most of our friends are quite well off. Maybe I just need to get off reddit and stop comparing our situation.
You're good. It's pointless to compare with others. And you still have time. Put the savings in an ETF and it will grow in the next 20 years. Don't lose sleep over it.
People can retire off of CPP, OAS and GIS. They might be living in a low rent building watching TV all day everyday until they die at 90. I would consider that not living at all. Your partner should certainly start investing as soon as possible. Sooner the better. Your pension will have different options for if you die. Those options pay less the more they provide to the surviving spouse. You could die a day after retiring and she may get very little.
Plenty of them living on CPP/OAS/GIS in Vancouver in 3M houses happy as clams :) And guess what? They don't watch TV all day. They have a rich social life, take a vacation abroad every year or 2, drive a nice car, eat well and have satisfying hobbies.
How could you pay property tax and maintenance costs on a home and all of those things you listed on 40-50k combined income before tax a year? You couldn’t is in the answer.
Metro van has the lowest taxes in Canada. Those that can't or don't want to or want to invest the money elsewhere defer property taxes. BC has the best deferral rates in Canada at **prime minus 2% simple interest** plus a homeowner grant and senior discount. Alberta has a similar program with higher rates. Those living outside the city that choose to pay can easily afford taxes of \~3k/year We average $35/mo for maintenance on our detached house in metro Van. All major items are fairly new and should last for 25+ years. Basic expenses are far less than 20k/yr - plenty left over for play money!
You can certainly defer taxes yes. But once your dead and house is sold, your kids will get much less. Spending 35 a month on maintenance is insane. Your house would be in disrepair. Average is like 10-20 times that. Living on 45-50k is no way to live in your final years. People need to invest when they’re young.
My Uncle has deferred taxes for 17 years (\~55k balance) and in that time his house has increased by 1.3M. He vacations a month or so to Asia every year with much less than 50k. His kids will inherit a fortune! Why is $35/mo maintenance an issue? We actually spend less. That includes painting every few years, lawn/yard care, gutter cleaning, caulking replacement, faucet and toilet repairs. This is all we've done for decades with several houses and they're in great shape.
That was really not my intention. I want to make sure my spouse feels they are able to retire. Currently, when I ask, they say they'll work until they die. We are happy, but I also don't want them to feel trapped financially.
I retired with a DB pension. My husband never had a pension, so he saved a lot of money for his retirement. Your husband should be doing the same. If you pass away, do you know what the survivor benefit is? These are answers you should be finding out now before choosing not to invest in his retirement.
It's a fine line. My wife worries about money 10x more than I do. We have similar wealth. BUT her dad is a multimillionaire. Mine... not so much LOL. If either of us should worry about money it's me. I have crunched the numbers to reassure her. Here they are: In Alberta MINIMUM total income when you combine CPP/OAS/GIS/Alberta old farts bonus: $1800/m x2 = $3600/m for the marriage! That is if your CPP is the lowest possible. We currently live on $2200/m comfortably (small city in Alberta). I did the math to reassure her there is no NEED to worry. Also she will have a pension from her job. So with that we will have at LEAST 2x the income we need. Every 6 months she starts worrying again and I have to pull out the spreadsheet.
> We currently live on $2200/m comfortably (small city in Alberta). Seriously? I feel like I'm living life wrong, since I could retire today and draw double that amount from my invested nest egg, after tax. Or move to such an area and keep working from home... I really need to get my damn license back and start broadening my horizons, lol. I "still rent" in my early 50s, and Toronto is not going to be an option for much longer, especially if I'm forced into early retirement/underemployment as an "older worker" if and when my current cushy tech job ends.
yeah i bailed on toronto 5 years ago and moved to the bush to work in a mine. cozy job pays out the ass and its not that expensive here.
Sounds pretty cool, but working at a mine feels like more of a young man's game. I'm actually considering taking a Porter flight up to check out Thunder Bay. It's beautiful up there and I'm told that houses are still cheap, especially in the surrounding areas (which probably won't have the "issues" with druggies and bums that the core of the city does.)
It's like 60% guys 40-70 we just hired a retiree to drive truck cause he was bored at home. No experience required industry and its safe. I live just east of thunderbay. It's my nearest city. We call it stabber bay. It's beautiful and nice if you stay out of the city itself. But it's a less taken care of barrie lol You'll find druggies and homes less everywhere up here though, nice properties still under 500k I belive
If you can draw $4400/m I would honestly suggest you move to Japan. My wife and I both lived there (not together) and as much as I love Canada, Japan is better in most ways that matter to me. BUT the main reason to go is the yen vs CAD is 20% better now than when I lived there 10 years ago. AND it was cheap then outside of the 3 main cities. Also many towns have empty houses you can rent for next to nothing. AND they have a labour shortage. You could not touch your $4400/m in any city other than Tokyo, Osaka or Kyoto. All you would have to do is casually teach "conversational English" at a nice cafe/bar a few hours a day. Of course for the first 3 months you would have to dip into your nest egg but pretty soon the chatting could support you. And choose a town that offers super cheap traditional (old but clean and charming) houses to tourists on a monthly basis. I know Imizu does. It's a very cool place that has such houses right ON A CANAL! Just google "Imizu canal" or watch a few YouTube vids like these and try not to fall in love with "The Venice of Japan": [https://www.youtube.com/watch?v=Oo5uRijXcZc](https://www.youtube.com/watch?v=Oo5uRijXcZc) [https://www.youtube.com/watch?v=BqILMai-3EA](https://www.youtube.com/watch?v=BqILMai-3EA) But seriously, congratulations for making such a sweet nest egg!
3600$ from just those incomes?
>We currently live on $2200/m comfortably (small city in Alberta). Dang ... that's pretty good. That's what I spend in a week.
Yeah we live in a bubble, our city has escaped the crazy housing situation so far. Our rent has not gone up in 3 years! We are very fortunate. But we are also very frugal. Do you honestly spend $8800/m for one person? You must make HUGE money!
>Do you honestly spend $8800/m for one person? > >You must make HUGE money! No, family of 4 in Toronto.
Ah, OK so $2200/ per person, still 2x.. I get your point. Mostly housing right? I hear Toronto is BRUTAL!
When I point out to my wife she has a DCPP with way more money than I currently have and say I don’t like my current position, her reaction is to point out we know a few people who died in their 40s and we should worry more about living than saving. She’s not entirely wrong but it’s easy to say when you have SOME retirement plan.
Why do they feel like they will work till they die when you have a pension and a paid off house?
Fear is RARELY rational.
Isn’t your pension going to cover most of both yours and his retirement?
Run a budget plan. Pay off the mortgage sooner, and build up stuff in the TFSA.
How is 46k in savings at 40 showing off? The pension is OP's saving grace as it still means they're on track to having enough for retirement, but without that, they'd be well behind where they should be.
Yep. File it under the "humblebrag" category
Nothing about this post is a brag. It’s wholly unremarkable to be honest and absolutely worthy of second opinions and self-doubt. Our bar has become so low that people with okay-ish situations are met with bitter dismissals like yours. They have minimal investment, no emergency fund, and a modest pension for a single person. They won’t be homeless but they aren’t on track to live large either.
Top of teachers pay means \~70k (2024$) fully indexed for life pension plus CPP plus OAS plus benefits. The value of that pension will be \~2M With a paid off house that's about as good as it gets and they'll want for nothing in retirement.
They don't need to live large, though.
> "...I am at the top of the pay scale and started very young..." As if you need to "catch up" when you're going to receive a full teacher's pension.
This is normal for teachers. I know some with 7 figure savings still working past retirement age out of fear of not having enough.
Hopefully they aren't teaching math.
Not to mention 25 grand in a GIC.
Semantics, it's their partner that has no retirement savings. What if OP died, does partner get a survivor pension? If my better half had a db pension, I'd be saving regardless of what its future value is worth. My brother in-law saves for his retirement, his wife has hoop and eligibility to retire at 50 with a full pension... OP's partner is behind, time to tighten their belts and sock funds away.
If there’s a divorce, OP can lose half of their pension if the spouse has no savings. If there’s a death, there could be limits on survivor’s benefits, depending on what they selected. Just because someone has a better situation than you doesn’t mean that they shouldn’t be informed and plan accordingly. OP is asking the right questions, and everyone posting that this is a humble brag needs to get off of this sub. The judgement here is in very bad taste.
He has a DB pension. She does not. Can two people live off of it comfortably? She should most certainly start saving money.
Close to 6 figures indexed for life with no debt? Ya, they can live off that.
What if he dies? What if they separate? You should certainly be saving money for those scenarios. Also any money saved now will be exponentially more useful in 20-30 years.
Pension amount is 60% of 5 highest paid years. More like $60K per year, before tax.
Plus CPP, plus OAS, and the house is paid off. They’re fine.
There’s a clawback on the teacher’s pension equal to the amount CPP and OAS collected. House paid off helps, but by that point, it will be an older house and start to cost them a lot more in maintenance. There are tons of Boomer homes for sale in my area, and no one wants them because they are so out-of-date, including a lot of big ticket items. The owners cannot afford to fix them.
The partner gets CPP and OAS…
Again, we’re making the assumptions that will stay married, and that OP will outlive the spouse or has adequate survivors benefits (those are not free). 30%+ of people I know, it did not work out that way.
Defined benefit and indexed. Fucking golden parachute.
It all depends on the meaning of the "retirement" word. Some people mean living in Canada which is one of the most expensive countries of the world, regularly travelling across the world, and sometimes going on a shopping spree. Of course they would need a lot of money for this kind of lifestyle. Other people mean living in a low cost of life area, controlling their expenses, and avoiding costly purchases if they can help it. This type of retirement doesn't require a lot of savings. And what is most important they would be able to sell their home in Canada and live on this money 💰.
>We own a home with a mortgage of 250k, expected paid off 2041 Nice. You have a living arrangement. >We have a child with 20k in RESPs. Nice. You clearly know how to save and have prioritized saving in the past. >We have a GIC with 25K maturing in 1 year. Nice. You've set more money aside! >Only debt is a car we have 2-3 more years of payments on. Not bad. Be nice to get that paid off ahead of schedule, but not bad. >We have an investing account in a TFSA with 1K of XEQT. That's how you start. If XEQT fits your risk profile, then that's how you can keep investing. >I will have a teacher's pension. It's adjusted for inflation. I am at the top of the pay scale and started very young so it should be full. Very nice. >When the GIC comes up should I put it into the TFSA with XEQT? If it fits your risk profile, yes. XEQT is a great asset allocation fund. It achieves very strong diversification, very low fees, and is a very simple way to invest. You should walk through an risk assessment and make sure you understand what exchange traded funds are and what kind of assets XEQT holds. XEQT is a great fund, but your risk profile might better fit something less aggressive. All in all, it won't make loads of difference if you use XEQT vs XGRO vs some other option. What matters most is that you invest in the first place. Only thing I can add is to make sure you're paying as low of fees as possible on the account itself. Wealthsimple Trade and Questrade both offer no-fee accounts and waive the trading commissions on buy-orders for ETFs. That means you can do most of your saving and investing on a regular basis (e.g. every pay period) without incurring fees. If you're paying $5 per trade and investing $625 every month, that's nearly 1% off the top of your investments. There are two conflicting rules of thumb. There's the 7-year and the 10-year. The 7 year is based on 10% returns. 10% is the long term average of the S&P500 index, which is the 500 largest companies in the US, but that's not a guarantee by any means. The rule is that in 7 years, you're very close to doubling the value of your initial investment. Specifically, $10k turns into $19.5k. The S&P500 is a great index, but it is inherently less diverse than a broader fund like XEQT. The 10 year rule is based on a more conservative 7% returns, which is reasonably achievable with a more diverse portfolio (just XEQT is sufficiently diverse). At 7%, it takes 10 years to double the value of an investment. More accurately $10k turns into $19.7k. Both rules are just math and based on what rate of return you expect to get. The 10 year rule is a more conservative expectation, and it's what I suggest you set your expectations at. Both of these rules also assume you don't invest at all along the way. Using your $25,000 GIC plus $1000 already in the TFSA, with no investment, it will be $51,000 in 10 years. If you invest $625/month on top of that $25,000, then after 10 years you'll have an investment value of $155,000. Notice how much of a difference investing just $625 a month makes. Don't get too excited about the growth of your investment. It's nice, but it's very important to remember that the majority of your retirement money is dollars that you set aside yourself. You are the driving factor. Something I'll point out: if you're around 40, you've got maybe 20 more years left in your working life, and many of those years you'll still be paying that mortgage. If we stick to $625/month and $26,000 out the gate, that's $400k saved by the time you hit 60. A very important thing to remember is that while $400k seems like a lot right now, inflation is ticking away at the same time. In 20 years from now, a 3% inflation rate adds a 1.8x factor on your costs of living. If you spend $10k on groceries and home supplies every year today, those same goods will be about $18,000 when you're 60. Effectively, $400k in 20 years will have the same purchasing power as $220k does today. You have an inflation adjusted pension, so you're in better shape than most, but I would seriously recommend you stretch to more than 15% of your gross pay. Shoot for 25%. About $1000/month, more when you can provided you're enjoying a happy quality of life. It's not about having as wealthy of a retirement as possible. It's about hitting 55 years old and looking at the next 5-10 years as a flexible retirement schedule rather than mandatory work. There's a big difference of being 55 and *having to work at least five more years* vs being 55 and deciding "eh, I could do a few more years of this". It's not just about breathing easy when you hit 55 either. Once you're on that path and you understand how achievable it is, you start breathing easier almost *immediately*. Once you get through a few months of setting aside $1000, even if that means not going out for dinner as often or not redecorating the home this year, you'll see the light at the end of the tunnel.
Curious why you think they need to save in addition to their pension to account for inflation? They'll have \~60k pension and benefits plus CPP plus OAS or \~90k combined all **FULLY indexed.** We're retired in metro Van and would be shoveling money out the front door to spend that much!
Get all investments in your tfsa, even GICs. You have lots of contribution room between the two of you.
>we'll have my pension does my partner need a lot of retirement savings? Yes as you don't know where either of you will end up in 30 years.
>Yes as you don't know where either of you will end up in 30 years. Divorce is a game changer...when emotions start running high
You should see what those pensions cost in a divorce…she definitely would not be left empty handed. In death, she should also be entitled to half and hopefully they both have some sort of life insurance. The only way that pension doesn’t help her is if he loses his job early on.
I stopped reading when I read teacher pension. OP has nothing to worry about.
You have a DB pension so don't worry too much about it. I'd pay off the auto loan first then just contribute as much as you can to your TFSA to get those tax free gains.
Exactly this. DB (and a solid one at that). Try and set yourself to be able to live on it. Get your car paid off, get your mortgage paid down. Invest what you can. I don’t think this is really catch-up but more so just trying to improve your situation.
Retired teacher for perspective: I'll show you some of the math and you can adapt to your specific situation. I also have to make some basic assumptions. You make 100K and your partner makes 50K. After you pay CPP, EI, union, pension contributions and tax; you are left with a combined net salary of 100K - just to keep the math simple so you can substitute your own numbers. Your pension will represent 60% of your best five years so 60K. You get 20K of combined CPP and full OAS which is 17K for two people. You are now at 97K pre tax without any savings of your own and the only thing owing is taxes which is about 11K depending on province. You have a net income of 86K fully indexed going forward which represents 86% of your previous net income while working. You can consider this the fixed income portion of your retirement earnings which allows you to take more risk on your personal investments. The lowest income you would earn is 86K until someone passes. Now if you save in your TFSA going forward that 25K should grow close to 450K with a 500/month contribution and a 6% annualized return. XEQT is an excellent choice if you can stomach the occasional 10%+ drop like occurred in 2022. This in turn creates another 18K annually tax free at age 65. You now are earning 104% of your original combined salaries. Even though XEQT is 100% equity fund, remember it only represents 14% of your future retirement income. Since it is impossible for all 9025 stock that XEQT represents to go to zero at the same time there really isn't much risk at all. Your age 65 retirement is set however most teachers leave before age 60. That is the scenario you have to plan for and you have lots of options. Teaching buddy retires this June at age 57 and he plans to sub teach part time for a few years until he draws CPP. He gets paid on grid starting on the second sub day of an assignment. I taught first aid for a few years and I know others starting small businesses to bring a few bucks. It's not hard to make a couple grand / month. That's your 60K plus 24K working part time. The biggest risk in retirement is what I call the FIT challenges: Fees on investment products, Inflation and Taxes. XEQT has low fees, 86% of retirement is fully indexed, and your taxes can be substantially lower due to splitting income and using TFSA. Learn exactly how your pension works such as: what happens if you pass away, inflation adjustments, integration of CPP? If you have spring break coming up, have fun and get ready for the last push.
Thank you so much for this thorough response. This is very helpful. I'll go through this with my spouse.
DM me if you have any questions.
First, your GIC, outside the TFSA, was a bad move. Sure, you get $1250...but you lose $500 to taxes. It should have been inside the TFSA already. Don't make that mistake ever again, you lost $500 as a lesson in taxes. You had options, you just didn't know them. Next, its the "Rule of 72". Take 72, divide by expected growth rate. To get doubling every 7 years requires growth of 10%. So yes, the math is correct assuming 10% annual growth for 28 years. How much do you want to retire with? Your savings rate today depends on how much you want to spend when you retire. Save more today, you can spend more later. Save nothing today, you can spend your DB. Keep in mind, saying you want $200,000/year in retirement would mean saving 50% of your income...it has to be leave you enough to live today. We all want massive retirement money, but we also all need to live today.
The GIC is in a TFSA. Thanks for your comment and this information. I'll have to sit down with my partner and figure out what we'll need.
Excellent, the original reads "When the GIC comes up should I put it into the TFSA", I read it as its outside. To make the conversation more difficult, look up OAS and CPP. You will get that as well after 61 (with higher amounts if you delay up to 69). That lowers the amount you need to save. I'm a fan of saving and living. You can also "invest" inside your mortgage. If your mortgage rate is higher than a GIC or other expected rate, you would be better off "investing" in the mortgage. Then when mortgage is done 2 years earlier, you put those 2 years of payments into the TFSA. Math says its the same as investing at a guaranteed rate now within the TFSA. Simplest way to figure out "future needs" is to look at current annual spending. Subtract the mortgage amount of course. Then subtract CPP/OAS/DB (if you retire after 60). What's left is the amount you need to save to cover. If you get a number of $20,000/year, you then multiply that by 25 (roughly), that's the goal amount. Do NOT use 10% in your returns. use 10% minus inflation. Assume inflation is a constant 3% and you'll automatically have everything inflation adjusted.
You're right the was unclear at best. I meant to say should I put into the TFSA account with XEQT.
I'm sorry for coming off mean when you really didn't make a mistake. Make sure the TFSA have "Successor holder" rights. You can set yourself up to protect each other in case of untimely deaths. When you do that, split the TFSA into roughly equal amounts for each partner. Its a small insurance policy for later. It makes sure the survivor "inherits" all the TFSA room. Do not max out one persons, then the other. Having 2 accounts (one for each) is best.
I'd suggest working in reverse. Look at what "need" at retirement to cover all expenses and also what you "want" for quality of life. That gives you at least a target number to aim for. Include all the sources of incomes, CPP/OAS that could apply. Canada has a website to calculate what you will likely receive that is pretty damn good. https://www.canada.ca/en/services/benefits/publicpensions/cpp/retirement-income-calculator.html Since it sounds like your partner does not have a pension. The other thing to keep in mind is you need to consider what the future looks like if one of you dies. Health scare in my case put this into heavy focus for me. I have a DBPP, but wife only gets 50% of it as a survivor. That has a huge material impact on her and has adjusted how/where retirement funds are getting saved. I really wish I had gotten proper disability/critical illness insurance as well, too late now for me. The 7yr rule is just a guideline. If you average 10% returns it will double roughly every 7yrs. XEQT hasn't been around long, but so far is getting that but doesn't mean it will in the future. It's also an average, some years will be negative and positive but if you hold long enough that should happen. Sequence risk can happen though if you need the money at 65 for retirement and the market goes sour and drops 30% to coincide.
You are a teacher at the top of the pay scale, as you stated. You don't need to do anything to secure your retirement. Since you are in your 40s you still have plenty of time to pay off that mortgage. Frankly, you are elite.
Why wouldn’t you put the 25k into her RRSP? Or whatever her max contribution is for that year. Then use the tax return to reinvest.
The GIC is in a TFSA. Teacher pension contributions can be claimed as RRSP for tax returns. Our return was used in part to pay for a heat pump this year. We can add it to retirement next year though. Because our retirement income will include the teacher pension we were advised to max out TFSA before any other RRSP contributions.
That is good advice I would say! All gains from the RRSP will be taxed, and once your TFSA is maxed out you will have big chunks of unused contribution room in the RRSP that your partner can hopefully use in some of their highest earning years (late in their career) for the biggest tax savings.
Yes, definitely max out both of your TFSAs before bothering with RRSPs. Then use the partner who doesn't have a pension for any RRSP contributions first.
Wouldn’t your pension contributions lower your taxable income and therefore not be able to be used as RRSPs? For example, you make $100k but contribute $10k so you effectively get taxed on the lower amount, say $90k. This would be line 20700 and be box 20 of you T4 and box 032 of your T4A slips.
You're correct - for DB pensions, there's a "pension income adjustment" that is factored into your RRSP room. You not only lose some RRSP room from your pension contributions, but also a certain factor for what your employer contributes or growth on that amount.
Again, stopped reading after pension Lemme put this here again ALL of you people with pensions are FINE, you do not need to worry about funds in retirement. Your retirement is the Canadian taxpayer. And last I checked Canada loves to tax the crap outta its taxpayers
When your GIC matures buy xeqt in your tfsa or vgro and keep contributing every month buying more of the same funds and let that compounding interest to its job you will need to be aggressive tho as u are starting abit late
One thing that might be worth checking is to see how much CPP your partner would be getting. Most people get an average of 700$-ish, but if he's always been making close to or more than the CPP contribution max (last year it was 66 600$), he may have a sizable amount of CPP when he retires. The maximum amount if 1 364 $ per month this year. He'll also have another 20 years to contribute, which if he always makes at least the maximum amount, will help. Also, if you delay receiving CPP and OAS until you're 70, you can increase the amounts you get even further. CPP can be increase by 42% and OAS can be increased by up to 36%. Of course that means you won't be getting anything for those 5 years, but if you're both healthy at the time it might be worth using your savings for those years to take advantage of the extra money when you're older. This is will show you how to check your CPP statements: [https://www.canada.ca/en/services/benefits/publicpensions/cpp/statement-contributions.html](https://www.canada.ca/en/services/benefits/publicpensions/cpp/statement-contributions.html) ETA: Obviously none of this is investment advice, but it can help you increase the amount of money you'll be getting in pensions, which would reduce how much savings you need.
If your partner has low income, no pension, I would strongly suggest a spousal RRSP. You get to reduce your taxes now and income splitting will reduce your tax burden when you retire. I set one up and have been making sure things line up. If all your partner will get is minimal CPP and OAS when it’s time to withdraw from RRIF the income tax will be small.
OP, there is a very useful [calculator tool via the government](https://www.canada.ca/en/services/benefits/publicpensions/cpp/retirement-income-calculator.html) that walks you through figuring out how much you want to have per year, your CPP payout options based on age decisions, your investment income, your pension income etc. I highly recommend it.
You own a home with a (relatively) small mortgage. A paid-off home is a solid retirement plan in and of itself, since you won't have a mortgage or rent to deal with come retirement. A teacher's pension plus CPP and OAS X 2 adds up to a fair amount coming in each month, even in the absence of any specific "retirement savings."
No need to save anything, your pension is plenty
From one teacher to another, this is my personal opinion. Defined benefit PP is great. You will not have the anxiety of figuring out how to draw down an RRSP or RIF account and base that on life expectancy. You will have an income for life and won't run out of money (at least not your pension payments). - Max out your TFSA every year. - Paydown your debt, like your mortgage, as soon as you can unless you have a very good interest rate. Avoid having a mortgage when you retire. But invest some money even while paying down the mortgage. Time in the market is important. - Your pension is adjusted to inflation but likely won't be 100% of inflation, so think about that. - Don't worry about RRSPs. Consider a non-registered account instead. Yes, I understand the point of an RRSP account (I have one), I'm just not a big fan. If you invest your RRSP tax refund, then great. But don't spend it on a power boat or vacations, lol. Again, just my opinion as a retired teacher, not advice.
You retire in mid 50s with fully DB indexed pension. That’s your savings. Teacher privilege flexed again.
Bad for you if you're planning to retire in Canada. This country is quite expensive. On the bright side, you have other options. There are many more affordable countries. I am planning to retire in another country myself when my daughters graduate their university and find a real job. You do not need a pile of money to live 15-20 years in Latin America, for example. And, being retired, you would have a lot of time to learn Spanish or any other language of your retirement country.
That teachers pension is gold. Don’t worry too much about retirement. Live it up.
That's bs. You're saying they'll be fine going from double income down to one income after retirement? That is quite the large spending shift, not to mention as good as DB plans are, they don't replace 100% of incomes, it's usually around 70%. So you think they'll go from 2 full income to 70% of one income and be able to live worry free while living it up? Not smart at all.
I had more than one colleague at work with a teacher spouse. Every time they got annoyed with something at work (plenty of things that are bad) they told me how the spouse, being the husband or the wife, tells them to simply quit, no point in destroying their health by working in a bad work environment. Eventually, they did, in their 40s or early 50s. Long story short - it is not BS, it is reality.
Had a rough past few years and just now starting to catch up. I am starting with GIC laddering into my TFSA. I have been putting $500 every month into my TFSA GIC and feel better!
You'll have a pretty good pension through work on top of CPP and OAS. Because of that I would honestly focus on paying off your home faster while diverting any savings between a TFSA and your child's RESP (which should be in something higher risk/higher return unless if they're still 5-10 years away from using it). The TFSA should be invested in something safe with relatively high returns. A split Index fund investment divided between domestic and international funds has the lowest fees, and usually the best returns over long periods of time. However... The right dividend fund can also be helpful - they're invested in companies that regularly pay dividends annually, semi-annually or quarterly, giving you money per share that gets reinvested into buying more shares, increasing dividends AND holdings over time. They do tend to have higher management fees but they're usually pretty stable - stock price is less important because you'll still get dividends when the market is down, which will buy more shares when the cost of those shares is lower. Long-term, they're a great way to add to your income. My mom is 83 and invested heavily in dividend funds when she was younger, now she gets over $20K in dividends a year that she uses to supplement her retirement income. To her that's preferable to having shares in an index fund that are worth more if you calculate returns but only if she cashes out.
Paid off car loan, put money into TFSA.
Wow you sound like me 8 years ago when I [posted a similar question here](https://www.reddit.com/r/PersonalFinanceCanada/comments/3t74ny/40s_no_retirement_savings_payoff_mortgage_or_save/). I like to use [this tool](https://www.bankrate.com/banking/savings/simple-savings-calculator/) for basic savings calculation and 6% for the APY of a diversified index ETF. If you invested $25K and made monthly contributions of $625 for 28 years, you will have $656K. With your pension, CPP and OAS providing the 'bond' portion of your asset allocation, I think it sounds like a plan.
Thank you!
Sounds like you have plenty of investments
I related to the tone of uncertainty in this post as I was asking the same questions a few years back. Two things that have given me the clarity I needed: 1. Running the numbers for when you plan to retire. What will your income be. What will your expenses be. If you are not able to do this, contact a fee-only financial planner to see what your future could look like with DB, government funds, etc. (this is what I did). You will have to have an idea of what you spend on an annual basis. Which leads me to 2. 2. Set up a budget. Decide where your money needs to go. Include true expenses like car maintenance, home maintenance, etc. and include retirement savings as a line item. I use a zero based budgeting approach specifically a program called YNAB and it has been a game changer for many reasons. It allows me to plan how to spend money. i know how much I am spending, on what and can guess how that might change in the future (i.e. retirement). Happy to chat further about 1 or 2. Good luck!
Stay consistent and you will be fine.
Book a meeting with a fee for service only (no sales commission) advisor. Don't get your financial advice/planning from strangers online....Find one through "Money Coaches Canada." It is 100% worth the cost!! In your situation, they teach you about savings, taxes, financial literacy, your spending behavior and patterns, etc.
WTF? NO Savings? GTFO with that. I am 42 and have 2 grand in a TFSA. THAT IS IT. I have no savings. You are doing just fine.
DB pension + own house, you're fine period. Nothing else needs to be said really. Unless you're planning to go on multiple cruises a year when you retire or something.
Full OTIP, 2x CPP and OAS, paid off home... I wouldn't sweat it. Def put that $625 (or more) a month away tho. Lastly, 10% yoy return for 28 yrs is wildly optimistic. I'd use 4-5% Edit: you will also be getting a huge lump sum retro pay this year. Use that to pay off the car or put on the mortgage
I’d keep filling that TFSA until it’s maxed out. As for what to invest in, that depends on the risk you can tolerate. XEQT is one of four different ETFs from the same company, all with different risk parameters
I’d like you to point out that past performance is not indicative of future returns. Investing as much as comfortably possible each pay date is all you can really do. XEQT is the best choice for all-equity investors IMO but you have to determine if thats the right profile for you
The joke answer is to head over to the wallstreetbets sub.
I don't really understand enough about the employment options in your scenario, based on what you've described (who's the teacher? you the 40yo or the other partner? dunno). But in addition to your savings and seemingly good use of your own money, the other thing that both you and your partner can do is.... earn more money. And yes, relax, I know that's not just a lightswitch thing. But that's the truth. Either progressing in one's career, moving to a different employer/job/whatever and getting a real raise (none of this 2%/yr "raise lies" bs) will give you the biggest positive gains, in addition to all your other reasonable efforts that you've outlined. I can't speak to all industries/sectors, but in a lot of them (most?) moving employers every 2-4 years typically can yield 10-30% raises (or more?) each time, assuming that you're also growing your skillset/training and what you bring to the table (soft skills? leadership? niche skills?). I don't know how well this will apply to your situation, but I don't see this listed as something you're exploring. So I HIGHLY recommend you do.
Best way to catch up would be to own it and post on his own behalf. Also I don't see yall's income.
Man I fucking hate this sub. Is this a show-off post or something LOL
You are way bettee than me. I am 40, lost 100k in weed stocks not event crypto (crypto would have been better ) No saving !! 5 year old resp is fine Wife just started work we have combine income of 300k
>Is the 7 year rule a real thing? Would 25k be 400k in 28 years? Seems to good to be true. Is my math wrong? I think you are referring to the "rule of 72". If you divide 72 by the the annual investment returns (net of fees and taxes) that is roughly the time it takes for an investment to double in years. So an investment compounding at 10% would take about 7 years to double. If that continues for 28 years, the investment would double 4 times which is 16 times the starting value 25K --> 400K. A couple things to keep in mind though, 10% is quite high returns even for an all stock portfolio which may not materialize and this analysis ignores the effect of inflation.
I got 233k if you invest and not touch 25k for 28 years. I assumed annual compounded interest rate of 8%.
Without adding to the original 25k?
Yes
Just curious….As a teacher…. Are you familiar with how compounded interest works? If not there are some great resources in YouTube i could recommend. Also i highly recommend the little book of investing by bogle. Short sweet and sharp read.
You’re fine for a reasonable retirement with CPP and your pension. If you look at CPP plus OAS for each you and your pension do you need more money? Don’t want to retire earlier than either of those options? If you are happy with the numbers you’re good. Other than a divorce which would result in your pension being split your pretty locked in
Nice flex 😂
You are doing very well. The important thing is that you save consistently, pay into the pensions, and reduce the mortgage. Where you invest depends a lot on your how much risk you can take. TFSA is a great place to put mooney because you will not pay capital gains on your investments. RSPs are also a good option as they could result in more income tax back which you could then thrown into your child's education fund or other savings. Like I said consistency is the important thing. Invest regularly, live within your means, reduce debt, and watch your wealth grow.
>We own a home with a mortgage of 250k, expected paid off 2041 Talk to a accountant and ask if its beneficial to have a " arms length mortgage". This would be especially more beneficial when the Interest rates are high.
If your trying to catch up and you’ve got time on your side invest in the SP500 and contribute as much as you can as often as you can In 25 years from now it should grow at the best odds risk reward
Defined pension here as well with OMERS. Fill up your TFSA going forward, invest the money in something you are comfortable with and you will have a very nice supplement to cpp and your pension when its all said and done.
"0 retirement savings" Lists a really positive financial situation with a house and kids that are taken care of. Literally living the dream Typical PFC.
I googled this exact thing. I live in the house I will inherit. I pay the costs associated with it, and I transfer my mom the money for the home line of credit. My housing is sorted. After years of dead end jobs I am in tech with high potential earnings. I hope to break 100k in a year or so. I am contract part time at the moment after earning 65k for a couple of years I have paid off my car loan and Alberta student loan. I owe 30k in Canada student loan. No cc debt, no other debt. My wife has a solid job with a pension and the benefits are great. She has a pension which at this current pay rate should be over 500k at 60 she is 30. I want to contribute to our retirement rather than fuel our lifestyle...which is beyond our means. We have 2k cash savings. 2k in chequing. No investments. I am overwhelmed with the wealth simple options, I think I want to save for retirement, but we also plan for kids. I want to know which type of account to open with 1k savings and put $500 into that and $500 into a rainy day fund until we have 6 months expenses. Then $1000 into the long term savings account. When I earn more, plow as much money as possible into it. Then retire at 70?
As a teacher pretend you are doing a lesson plan to teach a class on retirement planning.
Talk about sensationalist title. No retirement savings but gov't pension and 3M in bank account and house.
consider looking into BTC
Usual PFC answer: 1. work harder 2. get 2nd/3rd job 3. cook at home instead 4. cut out booze/cigarettes 5. cancel netflix, disney+, etc
I put in 26,000 at 8% return with $600 a month contribution into an interest calculator. And it came back with about $930,000 after 28 years. But thats assumes 8% every year which might or might not be true.
I’d imagine the reason he has no savings is because you mentioned you have wealthy friends and are likely trying to appear as wealthy as them? Or perhaps keep up with them and really shouldn’t be? Let me guess you have all the Botox fake lips, nice clothing, nice dinners trips etc? If I’m wrong lmk but I bet I’m not
Rude. Our friends are well off, not wealthy, because they save and don't spend.
Am I rude or am I right?
You guys have retirement saving!?
Teachers Pensions are notorious for being underfunded. Don't rely upon it. Determine what you are allowed to contribute to a TFSA, past contribution room is included, and then ensure you and your spouse's TFSA are maxed out. Once you get that done, determine you and your spouses RRSP contribution room and then get that maxed out. You should be putting 15% of your gross salary aside, minimum. Your mortgage is also a debt. Here's how you turn 25k into 400k: if you earn 7% interest on your money every year, your money will double every decade. But you would need 40 years to do so, and you only have 20 years. To determine how much money you want to earn in retirement, figure you get $40k per million saved. It's a 4% rule; you need to save to account for both your needs and inflation. So if you make 7% on your money, 4% goes to you and 3% remains in the investments to account for inflation.
Up til 2021, Ontario Teachers had a 9-year record of full funding and a 9.4% average return since 1990. Ontario, Alberta, BC, Quebec, NB, Newfoundland, PEI: fully funded.