Just stick a fork in me when I’m 50! Ish.

BF and I have been (and still are) discussing our future retirement plans.

How did this all come about? Innocently one day, as we were petting unicorns and singing Kum-ba-yah…

Okay. Seriously, he was hyperventilating slightly about making sure we have enough for when we retire, and not only that — to retire early to boot!

This freak out came about one night when he started reading an article on how less than 19% of Canadians have saved over $250,000 for their retirement, which in his world, is his MINIMUM level for retirement savings.

About 30% haven’t saved more than $25,000.

*BF starts hyperventilating with visions of cat food dancing through his head*

And the discussion began.

Factors to consider:

  • Not going to retire in North America so cost of living in retirement will be lower
  • May actually have family home(s) available in Europe to buy in full or rent at low cost
  • If not, will probably stay renters for life — we’re not really interesting in owning homes
  • Each of us will fairly contribute 50% to the retirement egg*

*Some people don’t find this fair, and want to base it on income %.

I agree if that works for you, like if one is earning $20k to someone’s $100k.

But we don’t have a high differential in our incomes, it’s all over $100k for each of us if we both manage to score contracts for a good part of the year.

Questions to ask when planning for retirement:

After you calm down your hyperventilating partner…..

1. At what age do you want to retire?
2. How much do you need to retire? (What are your plans?)
3. How long are we planning for as a lifespan?

Canadian Retirement Notes:

TFSA = Tax Free Savings Account (like a ROTH IRA? Someone correct me please.)
No tax break given now, more like a savings account, but you can save up to $5000/year under this plan and not pay any taxes on the profits.

RRSP = Registered Retirement Savings Plan (like a 401k I think)
Given a tax break on your income now, but you will pay the taxes later when you withdraw the dough.

Canadians, read here about the difference between the two.


That’s always the #1 question in retirement planning: when do you want to call it a day?

He’d like to retire at around 50, perhaps 55.

Me, I always thought I’d work until 65, and have 40 years to save.

I am not really convinced I will (or want to) retire early, but I think to be on the safe side, I want to be uber conservative and plan for the big picture.

Put on top of that the fact that he’s also 10+ years older than me, and if he retires at 50, I’m going to have to retire at 40 to keep pace!

That is, if I want to, which I am not convinced of at the moment because I feel it’s too young.

Nevertheless, this is a good exercise for both of us to consider.

Still, I never say never.

Early retirement also poses another problem: I cannot withdraw anything from my RRSP until I am 65.

Therefore, if I retire at 50, I need to bank 15 years worth of cash and TFSAs to live, before I can release and draw upon my retirement funds.


I am not taking Canada’s government pension plan into account here, because I am not expecting more than $300 a month from it, and that can just be a bonus to supplement my own personal plan.

So…. I always thought it was 75% of your salary, and in the good ol’ days, I could count on $60,000 a year.

That meant that I was aiming to be able to withdraw and spend at least $45,000 gross.

But then BF made a good point: right now, we kind of already live like pensioners (which we’re enjoying by the way, not doing as punishment or out of an OCD need to save).

We spend about $20,000 – $30,000 a year on net expenses which includes traveling, fun stuff like entertainment, renting a place, and splitting everything in half.

In total, $40,000 – $60,000 together as a couple.

So let’s just assume what we’re spending now is generally what we’d spend when we’re retired, around $20,000 each if we’re traveling a bit and sharing in the expenses 50/50.

BF: But I wanted to upgrade our lifestyle!

Me: Upgrade? By buying a fighter jet? Eating foie gras daily? What are we upgrading on?

BF: Well.. I mean what are we going to do when we’re retired? I wanted to travel more.

Me: I wasn’t planning on sitting around at home staring at each other 24/7! Of course we’re going to travel. How much more did you want to travel?

BF: Like take a month off. It’s going to cost around $4000 just for a trip for a month.

Me: But we’re not spending $4000 every month on a trip in your upgrade scenario right? We already do that on our current budget.

BF: True. Maybe we just stick to our monthly budget and travel more by traveling on the cheap to cities around where we’re retired.

Note: What about having those rug rats?

We are not taking kids or a family into account here, because I am assuming that my future offspring will NOT need to support me and vice versa.

This is just retirement planning for the two of us, not the whole family, and we are going to make more than $30,000 a year each on average, to be able to pay all the extra expenses that will eventually come with having a family.


Well, taking statistics into hand, women live longer than men and I am 10+ years younger than BF.

Chances are, I am going to need a lot more money saved than he does.

On the bright side, I also have 10+ extra years to save and plan for this eventuality.

If we retire early, let’s say BF at 60 and me at 50. I should expect to live until 90 based on my current lifestyle and family history.

That means I have to have enough banked for 40 years.

BF is probably going to live unusually long for a man, until at least 80 with his family history and current lifestyle.

He needs to bank 20 years of savings, and I think he’s already got that more than covered from what I gather.

He’s just being a worrywart.

With all that in mind….


With my handy dandy retirement calculator in my budgeting sheet, have come up with these numbers:


  • Rate of Return: 5% — very, VERY conservative
  • Years to live: 40 because I am retiring at 50, living until 90 as my best case scenario)
  • Years I have to save: 23

I need to save at least $1600/month at least which is $19,200 a year.

Still, if I can save more, I’m going to do it.

But.. DAMN!!


Originally, I wanted to save about $1000 a month, or $12,000/year, but I was also assuming I had 40 years to save! Not the hypothetical 23 years.

I did not foresee NOT working for all of 2009, so I had no fresh income coming in.

That being said, I still managed to sock aside these amounts from my savings:

$5000 = TFSA 2009
$3553 = RRSP
Total: $8553

For me, it was a pretty good showing, albeit pitiful in comparison to my original goal.

Since I need to start ramping up on the savings just to get to my comfort zone, I need to make a new plan:

$5000 = TFSA 2010
$5200 = Cash & Equivalents*
$9000 = RRSP**

$19,200 to be saved

* Cash: I need this to be my hefty emergency fund as well in case I run into a repeat of 2009 with $0 in income.

** RRSP: I don’t actually know the exact amount as my taxes aren’t filed yet, but ballparking it, I think that’s what I will be allowed next year. Hopefully more.


I need to make sure I keep enough cash flow in the business to operate as well as enough cash in my emergency fund.

I can’t put everything into retirement accounts that I cannot touch until I’m 65.

I need large amounts of money saved because I’m a freelancer without a steady cheque.

$5000 = TFSA 2010 in full
$12,000 = Cash & Equivalents saved in full*
$3000 = RRSP

$20,000 to allocate

*I need to replenish a large chunk of what I drained for 2009 in living expenses.


Any money I make above and beyond will go towards:

  • Topping off my RRSP (now that I think about it, I think it’s $11,000)
  • Putting the rest into cash equivalents for my emergency fund
  • Bank the rest and wait for the next fiscal year to top off my plans again

Wash, rinse, repeat x 23 years.


BF’s strategy is just to save as much as possible and live off the interest.

To get $25,000 in interest, giving at least 5% a year, you need to have half a million banked.

Assuming interest rates are at rock bottom – 3% – you need at least $700,000 banked to get $21,000 in interest a year.

Maybe if I can really bank away lots of cash now into a savings account I could foresee being able to live off part of the interest.

The only thing nagging at me is all that money for no real enjoyable reason. I mean, if I saved half a million, I am selfish enough to want to spend some of it on myself during my retirement years and life, rather than just split it among my kids upon my death.

So, that’s the new FB Retirement Plan that I’ve hashed out so far: to save around $20,000 a year.

About the Author

Just a girl trying to find a balance between being a Shopaholic and a Saver. I cleared $60,000 in 18 months earning $65,000 gross/year. Now I am self-employed, and you can read more about my story here, or visit my other blog: The Everyday Minimalist.