Category Archives: Retirement

And in Reply…

My last post about knowing when you’re able to retire based on your dividend income elicited some good questions and counter-points from Robb at Boomer and Echo. The answers I have would have involved a rather long response in the comment section, so I decided to reply in a new post. For the record, here is what Robb said:

I used to think this way, how­ever I don’t think it’s real­is­tic to live off div­i­dends and never touch your cap­i­tal in retire­ment. First of all, any RRSP sav­ings will even­tu­ally be con­verted into an RRIF and face stiff with­drawal rates. Sec­ond, what if you want (or need) excess cap­i­tal in one year to pay for a car, new roof, large vaca­tion, etc.? You’d prob­a­bly look to sell off some stock to access the cap­i­tal. Finally, there’s the poten­tial to work longer than needed in order to reach a tar­get div­i­dend income stream. It’d take a mil­lion dol­lars in cap­i­tal to spin off $35,000 to $40,000 in div­i­dends. Why wouldn’t you want to tap into that mil­lion dollars?

In response, I say this: Continue reading And in Reply…

Dividend Investing Makes Retirement Threshold Obvious

Dividend investors know exactly when they can retire.
Dividend investors know exactly when they can retire.

I’m sure it’s just coincidence, but I’ve come across a lot of “When do you know you’re ready to retire?” articles the last little while. — EDIT: Just this morning, Robb at Boomer and Echo has written a post on this very topic. — After reading a few of these, it struck me that I had never really considered the question of when I would reach my (financial) retirement threshold. It’s not just because retirement is so far away, or because I haven’t taken the time to make a specific goal. The reason is because, as a dividend investor, the answer is so obvious that almost no thought is needed.

Continue reading Dividend Investing Makes Retirement Threshold Obvious

Target Benefit Penion Plans

target benefit pension plan
Target Pension Plan: Take Your Best Shot

A few days ago, I posted about the increasing income inequality in North America. That instantly became my most read post ever. (Thanks again for the link love at Boomer and Echo and Roadmap2Retire!)

Almost as though to prove my point about the fact that individuals need to stop counting on others, whether the government or their employer, to ensure their financial future, and to take charge themselves, the federal government announced that same day that they were introducing a new variation on the two standard pension options available, and introduced the Target Benefit pension plan. It is worth noting that this new type of pension plan will only be available for, “crown corporations and federally-regulated industries, such as transportation, banking and telecommunication”. For now. (Author’s snide comment.)

Continue reading Target Benefit Penion Plans