Author Topic: Early Retirement, registered vs non-registered savings - help!  (Read 1776 times)

elaine amj

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Dh and I want to ER in about 6 years, when our kids head off to college. I've run our numbers in the Ultimate Retirement Calculator and it looks doable - we do have to trim the fat as our monthly expenditures are getting way out of hand (i.e. careless spending). I took a close look at our money last night and realised we only have $150k or so in non-registered savings. That can't be a good thing for early retirement - help!

In 6 years, DH would be 50 and I will be 41, so we would have to wait:
10 years to get into his 403(b)
15 years to get into his RRSP (unless we start withdrawing with reduced payments at 60).
24 years to get into my RRSP
*DH works in the US and I work in Canada so we have finances in both countries.

We earn $86k in take-home pay. Our current annual savings are $44K a year, so 50%:
403(b) & RRSP savings - $8.5k/yr from paychecks
RRSP savings - $20k/yr for both (it's been helping a lot for taxes)
non-registered savings - $6k/yr
mortgage principle repayment - $12K (on top of regular mortgage payments of $1K - which I've categorised under expenses)
We also save $400 a month in RESPs but since that is for our 2 kids, I consider that expenses.

Current Assets: $450k
2 rental properties - $100k (paid off; renting for $1000/month for both)
registered savings - $200k ($140k is in my husband's accounts)
non-registered savings - $150k
We also have our own home worth $160k with a $50k mortgage left that I do not include in our savings when I calculate for retirement. In a few months, we will be putting another $24k towards the principle. So we should be done with the mortgage soon.

We want to plan for $40K/yr in spending (to be safe). After we reach the "correct ages", we should be fine. Between both our OAS, CPP, and my husband's pension, we will have enough for our needs. I plugged everything into the Ultimate Retirement Calculator and it says as long as we save $3000 a month for the next 6 years, we will have enough. I will admit I don't entirely trust all these numbers - just doesn't feel like it should be "enough". I need to run the math in another calculator or something to crosscheck. I'm OK at math but all this extra math has got my head spinning.

Just realised it will be about 10 years post-retirement before we can touch a significant chunk of our money. Plus, I honestly don't have a clue what we should do now. I had been planning on upping RRSP savings and focusing on the mortgage. Now I'm starting to realise this does not entirely make sense given that we have ER in mind.

What would be a better balance for our savings from now on? I *think* we're too heavily skewed into registered savings. We had actually planned to put even more into RRSPs in the next year for tax purposes. I'm feeling overwhelmed and lost! Ugh - do I even make sense?
« Last Edit: April 29, 2014, 04:40:16 PM by elaine amj »