Life Situation:
32 year old female, husband is 35. Living in Southern Ontario, Canada. Two kids (2 and 4). One 5-year-old lab who thinks she is a human.
Gross Income:
Me - $38,000 CAD (working part-time as a program coordinator at a university) + profit from an Etsy business started in Aug 2015 (very new, doing pretty well, so far this year have cleared around $7,000 profit and hoping to make $10,000 profit by the end of the year) + $6800 from new Canadian Child Benefit (based on my income last year, when I was mostly on maternity leave and hadn’t made much from my Etsy business, so I expect this amount to drop in 2017)
DH - $80,000 CAD (working full-time as an engineer)
Current Monthly/Yearly Investments:
Me:
$150/$1800 into CIBC RRSP
$200/$2400 into CIBC TFSA
$253/$3036 into workplace pension (8% of my salary, work puts in 7% of my salary, so $221/$2652)
Husband
$385/$4620 into CIBC RRSP
$200/$2400 into CIBC TFSA
$192/$2304 into workplace Manulife RRSP program (3% of salary, work matches contributions up to 3% of salary, so actual amount invested is $4608/year)
Kids:
$250/$3000 into CIBC joint RESP
Current Investment Balances
Me:
CIBC RRSP - $14,177
CIBC TFSA - $12,477
Teacher’s Pension Plan - $12,541 (plan calculator quotes that it will pay $980/year at age 60) *Note: not working as a teacher any more, don’t plan to return to the profession. Keeping this money in there for now as it is generally a well-managed fund. May need to look into options at some point of moving it.
University job pension - $34,700 current lump sum value (can’t tap into it until age 55 at the earliest for a 35% reduced payout, hoping to get the hell outta dodge well before then, extremely good plan that gives you the HIGHER of a defined benefit or defined contribution each year – but, don’t see it staying like that until I can reap the benefits)
Husband
CIBC RRSP - $49,417
CIBC TFSA - $12,626
Manulife (workplace) RRSP - $22,990
Mortgage
Current balance: $209,000 @ 2.95% fixed; term is finished in April and I'm hoping rates stay low so we can get around 2.45% or so for another five years. Aiming to have it paid off in 10-12 years.
FIRE Plan:
Based on calculations I’ve made, I’m hoping we can FIRE in 15-18 years. I work at a smaller university with a smaller number of programs, but my kids would attend free/cheap depending on if I work full or part-time. I’d be fine if they went somewhere else, but it sure is a nice perk, one that is only available while I am working here.
It is hard to know right now how much CPP, OAS, and pension money we will get. But I’m working with numbers like once we pay off the Jeep in three years (0% financing, but I know, I know), putting that monthly money to investments. Once the house is paid off, putting that money towards investments.
Based on today’s dollars, I am thinking that $40,000 a year in retirement will be a good amount to live on when we don’t have to worry about a mortgage. Which means getting a stash of around $1M at a 4% SWR. Plus CPP, OAS, and pension money. Our paid-off house would have a value of around $400,000 (in today's dollars).
Investment Questions:
1. Where is the best place to move our CIBC RRSPs and TFSAs, given their current balances? TD e-series? ETFs via Questrade? We are with a mutual fund advisor and want to move them so we’re no longer paying MERs upwards of 3.5%. We have been investing monthly through automatic withdrawals (set it and forget it). I am finding I am getting paralysis by analysis.
2. Should DH and I be putting different amounts towards our TFSAs vs RRSPs, given our different income levels? We will have a surplus of $600 starting next month (one kiddo moving on to kindergarten, saving some daycare costs, plus the recently increased Canadian Child Benefit). I’ve already increased their monthly RESP contribution from $200 to $250. I’ve increased both of our TFSA contributions from $100 to $200. Where should the extra $250 a month go? I am tempted to put it into TFSAs, since we will have some bridge years between FIRE and pension/government support becomes available. For some reason, I am worried about our RRSPs growing so big that when we take them out in retirement, they will be taxed higher than we expect, especially since I should get a pension. That is why the TFSAs seem like a great choice.
3. Any glaring mistakes you are seeing? Anything we should be doing differently? I know, I know, the Jeep…. but it is not going anywhere. If we have any extra money, we put the odd $1-2000 towards the mortgage. I know the investing vs paying off the mortgage faster is quite the debate, but I do quite like the idea of a paid-off house.