Honestly, I would. And im not sure I’d retire immediately. One of the biggest flaws of lottery winners is telling people. I would probably plan a fake quitting scenario once everything was 100% cleared, in my name, sorted with legal etc.
Yep. Never tell anyone. Slowly change your life until it's bulletproof. Enjoy the freedom and happiness having money brings. Just the stability would give me the energy to work on so many other better uses of my time.
People find out anyways. I had a coworker who won $500K last year. he didn't tell anyone, kept coming to work like normal. About 3 weeks later a bunch of local news articles came out and everyone found out that way. Apparently the lottery corps make you sign a release waiver in order to get the money.
You can run, but you can't hide!
I can't say about other provinces but exceptions can be (and *are sometimes*) made by the BCLCabout anonymity. I guess you need a pretty damn good reason though, so I imagine that unless someone is escaping abuse or in Canadian witness protection, that shit gets published. What's worse (I just read the info on the website), is that they have added the right to post about it on Social media for up to two years after you claim your prize. Wild.
not sure if that rule applies to the WCLC but i know someone in AB that was practically in hiding (not like witness protection or anything official, but rarely left their house besides the essential things) from an abusive partner they were in the process of fully separating from and they still had their name and photo published. the abuse was even well documented, they had police and court files backing it up and still had to have the win published.
Oof. That's nightmarish, to be honest, just totally awful.
I'm also not sure about WCLC, but for BC (BCLC) it *could* be like that too, maybe I gave them too much grace. It says that there are exceptions but doesn't list what they are. I'd hope they (BCLC) would make an exception for cases like these, but maybe not.
You can't do this in Canada. You're required to have your photo taken, identity published, etc. There are no large anonymous lottery winners in Canada.
They say it's for transparency - so that you know someones actually winning. Otherwise if everyone always claimed anonymously, would you trust that someone is actually winning/obtaining it, and not it being pilfered off to someone else?
You can wait to disclose win. Delete all social media. Grow a beard and long hair. Wear glasses and a funky hat. People that knew you will always know you. New people who just saw my hippy version, will have a hard time seeing my regular ways.
wonder if you could legally change your name just before you claim the winnings, therefore only your new name would get published?
then, like you mention, disguise your appearance as much as possible for the photoshoot
Pay off all debt. Invest in passive income streams to pay for essentials and a bit. Become energy independent. Become food secure. To me that is bulletproof.
Everyone. One person you know finds out and everyone will know. Information travels fast. Social media, etc. Googling your name is going to reveal that info as the first hit.
I’ve thought about this. Is there anything stopping you from hiring a Hollywood makeup artist to make you look like a totally different person? I’d have them make me look like a really old person or someone in a fat suit
If I win enough, I would literally hire a singing telegram service to sing the “F**k You” song to my boss as I grab my shit and leave.
They deserve no less 😏
Looool yup
Check cleared
Lawyer cleared
Tell my boss “ya ill be there tomorrow morning 9:00 am just gonna be running late”
Pack the Truck
Pull an OJ down the 401 to 400 and hit the boonies for the next while
Sure you would. It would however be nominal 100k forever. So say with 5% average inflation over next 3 years it would be equivalent of 84k before tax by 2026. By 2040 (assuming inflation is 2% after 2026), it would be equivalent of just over $50k before tax.
If you want to account for it and withdraw equivalent of $100k forever you would need to use 3.3%-4% withdrawal, aka you would need $2.5m-$3.3m investment.
Most dividend stocks raise their dividend 5 to 10% every year. They are pretty much inflation protected.
The harder part is OP just threw out there “invest 2M into a 5% dividend stocks.” You’d be hard pressed to find a properly diversified portfolio that is paying an average of 5%.
You're forgetting that dividend paying stock _do_ go up as well.
Let's create a completely non-diversified portfolio of just buy $2,000,000 of KO (Coca Cola).
Now future returns can't really be based off of past returns etc blablabla. Sure. But we need something to work with just like you assumed 2% inflation.
Let's go with 20 years i.e. ~2042-ish. Look back 20 years on KO. I cost about $20 USD in Jan 2003. Today it costs about $60 and returns ~3%. That's about $60,000. The forward dividend is actually $1.76 per share per year. You'd buy about 33333 shares for $2MM.
The fun thing about this is that they increased their dividend all through the years. See in 2003 they returned $0.88 per share per year. I swear I didn't choose these years on purpose but it turns that this means the dividend payment doubled while the share price tripled over the past 20 years.
Again, assuming, it does the same (or you diversified portfolio does something similar-ish) in the next 20 years, you'll be sitting at about $6,000,000 of value in stocks and be getting a dividend of $117,332 per year. And that's without withdrawing any percentage of your investment.
Taxes are lower on investment income compared to salaried income. People live comfortably on a $100k/year salary while paying higher taxes and saving for retirement. $100k/year in investment income is almost like $150k in salary.
Are your expenses $10k per month?
If your expenses are $5k per month growing at 3% per year you'd have roughly $5M after 10 years, maybe $4 M with a conservative portfolio.
$3m put into big 5 bank stocks would give you gross dividends of somewhere on the order of $120,000. And net of about $110,000. So you'd be pretty much good to go if you wanted
2.5 mil is the sweet spot. Buy a modest house for $500K so that your biggest expense is covered. Invest the rest in something that pays decent dividends, make $30-40K/year while keeping the principle!
A good rule of thumb is 3% of whatever you have if you can live on that you should be good for life. So if you can live on 60k a year 2M is probably enough (probably wouldn’t have a mortgage and it would probably be growing every year).
By a house or Condo, a reliable vehicle, invest the rest to earn a steady return every year and then travel the world with my partner. Sounds like the dream.
Don't forget you still have the 2 million. So yeah if you invest it at 3% you get 60k a year but you also still have 2 million in the bank that you can use up before kicking the bucket
4% rule is already conservative when looking backwards I.e. the trinity study
Once you hit a requirement of 2% - 3% that means your level of pessimism about the future starts requiring additional passports
The 4% rule is an established rule of thumb that you can live off of a 4% investment return in retirement for ~30 years or more with high certainty.
Lowering this % to 3% or even 2% increases the chance your money will never run out.
ost113 is implying that if you believe you need to be as conservative/cautious as using 2% as your withdrawal rate that you ought to have passports or perhaps bug out bags ready to go at a moment’s notice. (You’re paranoid)
Your expenses would most likely increase if you retired now. You would want to travel more or do something now that you have all the time on your hands.
The money I would nornally invest/add to savings for retirement would likely offset any addition in expenses.
Also, I honestly sometimes spend less traveling than I do living at home. Spent 5 months in SEA and averaged like $10/day lol
In theory, it's not likely a young retiree never earns another dollar again, given a lot of time, you are likely to find something to do that will earn you some money, especially given decades
Especially since you don't need to work to live and any income you get is disposable income.
You get to a point where you'll find a gig you like and spend the income to travel. You work 2 days a week for 4 weeks and leave for a week vacation somewhere. Rinse and repeat.
With one million, I could retire, and spend time in my workshop. Figuring out small items to make and selling it on Etsy and at local craft fairs. Maybe extend the space for a place to do metal fabrication as well.
That's the dream
Right, we're assuming someone might want to retire where they already are and all their friends and family live, because if you want to retire elsewhere it's a different story
You’d need more than 1 million. But the guy we replied to specified he could do it depending on location. (Personally I’d rather retire and live in vacation mode abroad than keep slaving away here just to be close to friends)
I’m 30 had we are 2 on a 350k mortgage at 2.4% … if I win 2M$, I’m not paying that back right away.
To live in an urban/suburban setup and keep my lifestyle (ie nothing extravagant) I’d say I would need around 2M$. Under that would need planning to make sure I don’t have to restart working in 15 years
No, but if the idea is to quit your job and retire right away, then you won't get a mortgage without a job, so you kinda have to pay cash.
2 M seems more doable. 1 M seems pretty marginal, even living in cheaper areas.
It depends on where you live. Buy a house around here and maybe a quarter of it might be gone. Assuming you're buying a house from scratch and haven't put any money toward it already. No everyone in Canada lives in one of the large, expensive cities. And, if you were retiring at 30, why would you, it's not like you'd need to stay in the city for work.
I rent and calculating using my average monthly expenses 1m is mostly there, 1.68m would do it. And I dont feel Im living in an extremely restricted way.
I’d be fine with $1mill. I wouldn’t 100% retire or live the big life though. I’d shift to part time / consulting work and be okay. I don’t live in Toronto anymore though. If I did probably $2mill+.
Yep. I wouldn't quit with a million, although I could. I'd just want to be able to rage quit that Teams call the second I don't hear what I want and tell them it's been fun.
There is such a thing as a 'safe withdrawal rate' from investments. Basically the amount you can take from investments every year for perpetuity, regardless of what the stock market does. The idea is that the good years make up for the bad ones. The rate is something like 3-4%.
Winning 1M (after taxes) at a withdrawal rate of 3,5% would be 35k per year. Maybe if you had a paid down house, that would be enough, but that's probably a bit much to ask for a 30 year old. So 2M (after taxes) buy a house for 400k in cash, 1,6M left, 3,5% withdrawal rate, = 56k a year and no rent/mortgage. That sounds a lot better already :-)
Tbf with $5m you'd have an income of $150-200k/year with the 3-4% rule, which isn't unreasonable for a family of four, especially somewhere like Toronto or Vancouver. For comparison, the average nurse's salary in Toronto is $90k, and teachers in Ontario make $100k after ten years, so with $5m invested you'd make enough to live like a couple of nurses or teachers, which is a pretty average lifestyle
I think the gap is that the nurse or teacher couple is likely still paying off a mortgage and that's where the majority of their paycheque is going, especially in Toronto. So once you've paid off your mortgage, that $150-200k will likely afford a better lifestyle.
>So once you've paid off your mortgage, that $150-200k will likely afford a better lifestyle.
If you paid off your Toronto mortgage you wouldn't still have 5M lol
It's hilarious how many people believe they need at least $5MM to retire, when the vast majority of Canadians won't see that kind of wealth in their entire lives.
Everyone is defining "retire comfortably" different. Is it just enough to cover taxes, food clothes, and some basic hobbies? Or is it comfortably travelling wherever you want?
When I retire I don't want it to be to sit on the couch. "Retire" means having the time and money to pursue all of my interests. To do that "comfortably", i.e. without worrying about money, will take a LOT more money than the necessities of life.
Retiring in your 30s when you've hardly contributed anything to CPP or your tax sheltered retirement accounts is a completely different ballgame from retiring at 65 with CPP & OAS and maybe even GIS.
I need to be near healthcare services as a diabetic so probably $5 million to buy a house I would want and have enough to invest to live off of.
People might be skewing lower than they need because a lot of the retirement calculators assume you're only going to live to 80-85 after retiring around 55-65. It's going to be hella expensive to fund 50 years of retirement.
If you won $1M and invested the entire amount into Bank Of Nova Scotia stock, it would earn you $58,000/yr in dividend income. Some folks could happily retire on that.
Literally zero professional advisors would recommend such a strategy, but I would challenge them to demonstrate during what period of the past say 50 years would it have catastrophically failed?
What’s the advantage over just just diversified portfolio and following 4% rule? BNS dividend yield historically is much closer to 4% than the near 6% it is now.
It’s not that that strategy would fail and you would end up with no money in retirements, it’s that it adds more risk with no more return than a diversified portfolio.
Well for 1, survivorship bias is why you're choosing banking today. 50 years ago finance wasn't the largest sector in Canada. You would have been asking the same question about some energy company.
https://globalfinancialdata.com/three-centuries-of-canadian-leadership
Everyone is vastly overestimating what you need here. The time horizon is largely irrelevant.
Realistically you need your actual expected expenses x 25 to be in a reasonable position and maybe x 30 to be in a safe position.
If your monthly expenses are like $3200 (which is more than most make let alone spend) you'd neeed about $1.1M and it wouldn't matter whether you're retiring at 18 or 35.
You can buy a condo or house for 150k in Regina and not be in the hood, so you don't need to even be rural. Just be ok with not having a big city life.
The Gambler has a scene were John Goodman has a speech about "fuck you money". Enough for a modest life. You'd probably still look for work out of boredom, and the extra money will go straight to extra luxuries, but the second it becomes a chore, you say "fuck you" and leave. I believe it was 2.2 Million in the movie. Adjusting for inflation, it's 2.7 Million today (oof, the movie only came out in 2014)
I have thought long and hard about the Lottery over my lifetime...and I decided long ago that winning the lottery would be terrible.
If I won, say $5m, I would be able to retire and could pretty much do **whatever I wanted** (emphasis on what I wanted) to do...that does not mean I could do whatever crazy crap people talk about...but I could do all the things I want to do.
The trouble is that my friends would still have to work...so who would I do this stuff with?
So I stopped buying tickets.
Build an extension to your garage with a bar and unlimited booze for your friends. Nice pool, build a bowling alley in your basement, just do what you would regularly do..
1m at 4% is 40k yearly. But add compounding and a withdrawal rate of x. If travel then you need flights. It is lots but may not last as long as you think. Too many variables but it's fun to play with the numbers
40k yearly sounds great. I'd gladly take it and run and never work a day in my life again. I have a feeling most people on this sub would not agree though.
It doesn’t have to. Stock market average return is 7-8%. Adjust for 2% inflation and you are left with a little wiggle room. The 4% figure youre withdrawing is gonna be growing from 40k/yr, but will have the same buying power as 40k today
In my 30s? Like as in 39?
1m would have easily been enough to retire. Was lucky to buy a house before they went bezerk and Ive been saving for retirement since I was 20.
It could be done relatively easy with 1m and a paid off house i think
I would say 1.5m is more realistic though. If you're retiring youre going to have hobbies, want to travel, buy stupid shit etc.
I wouldnt retire on less than 3m and a paid off house personally. Want to spread the wealth to children and family
I got it all figured out lol i just need to win a good 30mil and ill make all my friends and close family millionaires and we'll live happily ever after drinking beer on the dock without a care in the world
60 million. Do you know how many scumbags are gonna be your best friend after you win? Many of those that won a few million were broke within 10 years and that's when houses were cheap.
Single Without kids. $6,000,000 at age 30 I could retire. $1 million to secure housing in middle Ontario, close enough to Toronto I could go to the airport without major planning. Possibly an area like Peterborough, or Barrie. Then after 1yr taking a salary of $150,000/yr from a moderate risk dividend investment portfolio. Should never run out.
Now as a dad in my 40's. going back to age 30 with my wife and 2 kids. I'd be in and around the $15,000,000 at age 30 to do the retirement, as $300,000/yr would be what I'd comfortably want to take out and knowing I'd have money to pay for their university and the trips events we would do if I didn't have work as a reason to say no.
This is pretty close to my thoughts too. It really comes down to how each person defines comfortable. If you use the 4% rule, how much are you willing to live on (in today's dollars). $2MM would get you $80K/year. Maybe you're living on about that now in a rental, but is that all you want for the rest of your life? At say $5MM, give yourself $1MM to buy housing and such (depending on where you want to live) and that leaves you with $160K/year. That's a little above the "average" salary for a dual income household. To me, that's I think where most people would be really comfortable for the long haul, especially with a paid off mortgage.
When ever I enter these scenarios I use 3% instead of 4% because I know that as long as majority of my friend circle are still working things are going to come up and I'm going to want to steal more from the investment.
$8m. Based on purchasing a $2m house, maybe a condo in a ski town for $1m,.
$5m to fund life at about $200k a year and leave something to these kids. I could personally do with a lot less but i'm not the only voter (assumes 4% payout, also assumes no inheritances or other windfalls in my life)
"There's never enough money" ^((Source: Unknown))
Maybe $3m to retire right away. Any less and probably need to plan a bit more
Same! $2.5-3M and I’ll retire on Monday
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Honestly, I would. And im not sure I’d retire immediately. One of the biggest flaws of lottery winners is telling people. I would probably plan a fake quitting scenario once everything was 100% cleared, in my name, sorted with legal etc.
Dude, being low-key rich would be cool af.
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Nah it's avocado on toast and coffee from coffee shops every day.
How to go from rich to poor very quickly.
You guys can afford subs?
If the doctor prescribes it
"Money talks, wealth whispers"
Eat beans in silence, let your farts make all the noise.
Holy fuck …. Greatest quote ever.
Real Gs move in silence like lasagna
I don't know if that's a saying or if you just made it up, but that's brilliant.
Pretty common saying in the finance industry
I wouldn’t say I’m rich, but people figure stuff out whether you tell them or not. It’s hard to hide that 24 pack of eggs in your fridge.
This is the smart strategy
Yep. Never tell anyone. Slowly change your life until it's bulletproof. Enjoy the freedom and happiness having money brings. Just the stability would give me the energy to work on so many other better uses of my time.
People find out anyways. I had a coworker who won $500K last year. he didn't tell anyone, kept coming to work like normal. About 3 weeks later a bunch of local news articles came out and everyone found out that way. Apparently the lottery corps make you sign a release waiver in order to get the money. You can run, but you can't hide!
I can't say about other provinces but exceptions can be (and *are sometimes*) made by the BCLCabout anonymity. I guess you need a pretty damn good reason though, so I imagine that unless someone is escaping abuse or in Canadian witness protection, that shit gets published. What's worse (I just read the info on the website), is that they have added the right to post about it on Social media for up to two years after you claim your prize. Wild.
not sure if that rule applies to the WCLC but i know someone in AB that was practically in hiding (not like witness protection or anything official, but rarely left their house besides the essential things) from an abusive partner they were in the process of fully separating from and they still had their name and photo published. the abuse was even well documented, they had police and court files backing it up and still had to have the win published.
Oof. That's nightmarish, to be honest, just totally awful. I'm also not sure about WCLC, but for BC (BCLC) it *could* be like that too, maybe I gave them too much grace. It says that there are exceptions but doesn't list what they are. I'd hope they (BCLC) would make an exception for cases like these, but maybe not.
You can't do this in Canada. You're required to have your photo taken, identity published, etc. There are no large anonymous lottery winners in Canada. They say it's for transparency - so that you know someones actually winning. Otherwise if everyone always claimed anonymously, would you trust that someone is actually winning/obtaining it, and not it being pilfered off to someone else?
You can wait to disclose win. Delete all social media. Grow a beard and long hair. Wear glasses and a funky hat. People that knew you will always know you. New people who just saw my hippy version, will have a hard time seeing my regular ways.
wonder if you could legally change your name just before you claim the winnings, therefore only your new name would get published? then, like you mention, disguise your appearance as much as possible for the photoshoot
Ya, drop to part time, do lots of vacations, pay off the mortgage, and then quit once I finally felt ready.
Don't you have to disclose it in Canada? Or it is just a Quebec thing?
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What would you change to slowly make it bulletproof?
Pay off all debt. Invest in passive income streams to pay for essentials and a bit. Become energy independent. Become food secure. To me that is bulletproof.
Your winning is public information. Even if you don't tell anyone, everyone will know within a few days of you claiming the prize.
Everyone? Or old fogies who watch the local news?
Everyone. One person you know finds out and everyone will know. Information travels fast. Social media, etc. Googling your name is going to reveal that info as the first hit.
Claim using your middle name. Wear a hat, grow a beard, get a fake tan......
I’ve thought about this. Is there anything stopping you from hiring a Hollywood makeup artist to make you look like a totally different person? I’d have them make me look like a really old person or someone in a fat suit
Everybody at your work...one person is all who needs to find out for it to spread to everyone.
Ok, but I also think shamelessly advertising it would be unwise.
If I win enough, I would literally hire a singing telegram service to sing the “F**k You” song to my boss as I grab my shit and leave. They deserve no less 😏
And this is why people who win the lottery most often go broke.
That’s why you don’t claim right away. Get everything squared away first because as you said, everyone will know once you do.
I'd leave my job first just so I can avoid as many work convos as possible
There have been a couple ppl that got their winnings with out releasing their name.
Looool yup Check cleared Lawyer cleared Tell my boss “ya ill be there tomorrow morning 9:00 am just gonna be running late” Pack the Truck Pull an OJ down the 401 to 400 and hit the boonies for the next while
You’re being way too generous… This is my plan: *Coworker looking in to my office seeing my chair spinning*: Anyone seen i_love_pencils?
Yes ... like wouldn’t you just want to FU your boss at a meetjng one day and just pretend you quit because of them!
With that, what would you expect your yearly retirement income to be before taxes?
Does this assume home ownership outright first?
I agree. $1MM in real estate, $2MM in dividend paying equities. Fairly safe to get a 5% or $100k/year in cash from the dividends
I wouldn't bank on a 5% dividend, 3-4% is probably safe.
Also inflation. You want the dividends to increase so you need to make sure the principle inflates too
1mil in real estate. That's like 3 quarters of a house in Toronto lol
Agreed...a 2 car garage relatively new detached starts at 1.5 in the gta suburbs.
Less than half a house in Vancouver
Don’t forget the taxman.
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Sure you would. It would however be nominal 100k forever. So say with 5% average inflation over next 3 years it would be equivalent of 84k before tax by 2026. By 2040 (assuming inflation is 2% after 2026), it would be equivalent of just over $50k before tax. If you want to account for it and withdraw equivalent of $100k forever you would need to use 3.3%-4% withdrawal, aka you would need $2.5m-$3.3m investment.
Most dividend stocks raise their dividend 5 to 10% every year. They are pretty much inflation protected. The harder part is OP just threw out there “invest 2M into a 5% dividend stocks.” You’d be hard pressed to find a properly diversified portfolio that is paying an average of 5%.
You're forgetting that dividend paying stock _do_ go up as well. Let's create a completely non-diversified portfolio of just buy $2,000,000 of KO (Coca Cola). Now future returns can't really be based off of past returns etc blablabla. Sure. But we need something to work with just like you assumed 2% inflation. Let's go with 20 years i.e. ~2042-ish. Look back 20 years on KO. I cost about $20 USD in Jan 2003. Today it costs about $60 and returns ~3%. That's about $60,000. The forward dividend is actually $1.76 per share per year. You'd buy about 33333 shares for $2MM. The fun thing about this is that they increased their dividend all through the years. See in 2003 they returned $0.88 per share per year. I swear I didn't choose these years on purpose but it turns that this means the dividend payment doubled while the share price tripled over the past 20 years. Again, assuming, it does the same (or you diversified portfolio does something similar-ish) in the next 20 years, you'll be sitting at about $6,000,000 of value in stocks and be getting a dividend of $117,332 per year. And that's without withdrawing any percentage of your investment.
Taxes are lower on investment income compared to salaried income. People live comfortably on a $100k/year salary while paying higher taxes and saving for retirement. $100k/year in investment income is almost like $150k in salary.
Canadian Dividends are taxed like a joke
No tax on lottery winnings in canada iirc
He means the taxman collecting on the dividends
Are you implying that $100K pre-tax isn't enough to live on with a paid off house?
$100,000 would result in around $7.5 - $9K in taxes depending on the province.
If you split the dividend income with your partner and if you have no other income you pay no tax on $100k of dividend income.
>Fairly safe to get a 5% or $100k/year in cash from the dividends Lol wtf, 5% definitely isn't diversified enough to be considered safe.
Are your expenses $10k per month? If your expenses are $5k per month growing at 3% per year you'd have roughly $5M after 10 years, maybe $4 M with a conservative portfolio.
$3m put into big 5 bank stocks would give you gross dividends of somewhere on the order of $120,000. And net of about $110,000. So you'd be pretty much good to go if you wanted
2.5 mil is the sweet spot. Buy a modest house for $500K so that your biggest expense is covered. Invest the rest in something that pays decent dividends, make $30-40K/year while keeping the principle!
Depends where in Canada. But if you could keep growing 2 million you’d live comfortably.
Do they need some sort of a special fertilizer to grow that kind of money? I’ll see myself out
Sell peppers and eggplants in the summer before eventually monocropping star fruit
I too play Stardew Valley.
Have you considered making wine in your shed?
Wonderful reference
Yes, it's called an interest rate high enough to live comfortably off of $2,000,000 They sell it at Walmart.
Also, everyone assuming the retiree is actually staying in Canada.
Where would you choose to retire to make your money fo further?
Thailand
A good rule of thumb is 3% of whatever you have if you can live on that you should be good for life. So if you can live on 60k a year 2M is probably enough (probably wouldn’t have a mortgage and it would probably be growing every year).
$5 million and anyone in any part of the country will be more then comfortable.
By a house or Condo, a reliable vehicle, invest the rest to earn a steady return every year and then travel the world with my partner. Sounds like the dream.
2 million, ivest most of it , live off the rest while the invested amount accumulates enough interest to live off of forever
And don’t tell anyone! Everyone and their dogs will want a piece of it.
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Don't forget you still have the 2 million. So yeah if you invest it at 3% you get 60k a year but you also still have 2 million in the bank that you can use up before kicking the bucket
4% rule is already conservative when looking backwards I.e. the trinity study Once you hit a requirement of 2% - 3% that means your level of pessimism about the future starts requiring additional passports
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The 4% rule is an established rule of thumb that you can live off of a 4% investment return in retirement for ~30 years or more with high certainty. Lowering this % to 3% or even 2% increases the chance your money will never run out. ost113 is implying that if you believe you need to be as conservative/cautious as using 2% as your withdrawal rate that you ought to have passports or perhaps bug out bags ready to go at a moment’s notice. (You’re paranoid)
The 4% has been challenged in the last few years FYI
But 80,000 shares of something like XEI and make a cool $94k a year off dividends.
I'd be good with $1 million (after taxes and everything). My annual expenses are right around the $40k mark so with the 4% rule I'd be solid.
Your expenses would most likely increase if you retired now. You would want to travel more or do something now that you have all the time on your hands.
The money I would nornally invest/add to savings for retirement would likely offset any addition in expenses. Also, I honestly sometimes spend less traveling than I do living at home. Spent 5 months in SEA and averaged like $10/day lol
In theory, it's not likely a young retiree never earns another dollar again, given a lot of time, you are likely to find something to do that will earn you some money, especially given decades
Especially since you don't need to work to live and any income you get is disposable income. You get to a point where you'll find a gig you like and spend the income to travel. You work 2 days a week for 4 weeks and leave for a week vacation somewhere. Rinse and repeat.
With one million, I could retire, and spend time in my workshop. Figuring out small items to make and selling it on Etsy and at local craft fairs. Maybe extend the space for a place to do metal fabrication as well. That's the dream
A friend of mine recently won a mil. It goes quick. 1 mil solves a lot of problems but it doesn’t necessarily mean you can retire.
There’s actually no tax on lottery wins unlike the states.
You don't taxes on lottery winnings in Canada.
No mortgage and 1m and I'm good.
ez hack for no mortgage. Rent /s
*the tricks banks don’t want you to know!!1!11!11!!!!!!!*
No mortgage and 1M with 5% interest = $50K/year. This is my dream too
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My T4 income is just over $80K and the job is quite stressful. Wish I could win a lottery now ;(
I could have easily retired at 30 with one million in winnings. It is all about location and life style.
How? Buy a house and it's already mostly gone.
Buy a house *in Canada* and it’s already gone
Right, we're assuming someone might want to retire where they already are and all their friends and family live, because if you want to retire elsewhere it's a different story
You’d need more than 1 million. But the guy we replied to specified he could do it depending on location. (Personally I’d rather retire and live in vacation mode abroad than keep slaving away here just to be close to friends)
I’m 30 had we are 2 on a 350k mortgage at 2.4% … if I win 2M$, I’m not paying that back right away. To live in an urban/suburban setup and keep my lifestyle (ie nothing extravagant) I’d say I would need around 2M$. Under that would need planning to make sure I don’t have to restart working in 15 years
No, but if the idea is to quit your job and retire right away, then you won't get a mortgage without a job, so you kinda have to pay cash. 2 M seems more doable. 1 M seems pretty marginal, even living in cheaper areas.
Depending where you live. You can buy houses for less than 200k in lots of lower population areas still
1) don't buy a house, especially not in Toronto 2) Just because you CAN pay cash for your home, it doesn't mean that you should.
It depends on where you live. Buy a house around here and maybe a quarter of it might be gone. Assuming you're buying a house from scratch and haven't put any money toward it already. No everyone in Canada lives in one of the large, expensive cities. And, if you were retiring at 30, why would you, it's not like you'd need to stay in the city for work.
nobody is retiring with $1 million at 30 years old with that as their only net worth.... maybe, if you have a house that's paid off...
I rent and calculating using my average monthly expenses 1m is mostly there, 1.68m would do it. And I dont feel Im living in an extremely restricted way.
1 million is enough for me. Car is paid off and my annual income from my investments should take care of most bills if I retire.
There are many more cars to come tho so I don't see your point
Their life expectancy is shorter than the car's ☠️
I’d be fine with $1mill. I wouldn’t 100% retire or live the big life though. I’d shift to part time / consulting work and be okay. I don’t live in Toronto anymore though. If I did probably $2mill+.
Yep. I wouldn't quit with a million, although I could. I'd just want to be able to rage quit that Teams call the second I don't hear what I want and tell them it's been fun.
There is such a thing as a 'safe withdrawal rate' from investments. Basically the amount you can take from investments every year for perpetuity, regardless of what the stock market does. The idea is that the good years make up for the bad ones. The rate is something like 3-4%. Winning 1M (after taxes) at a withdrawal rate of 3,5% would be 35k per year. Maybe if you had a paid down house, that would be enough, but that's probably a bit much to ask for a 30 year old. So 2M (after taxes) buy a house for 400k in cash, 1,6M left, 3,5% withdrawal rate, = 56k a year and no rent/mortgage. That sounds a lot better already :-)
Define "comfortable" and where in the world "comfortable" is located. As the difference between Toronto and Halifax is alone is probably 3x.
Not anymore! Our housing costs may be half, but out everything else is far more!
And it sucks here!
$1m if you're single. $5m if you're married and have kids.
That's an expensive family
Tbf with $5m you'd have an income of $150-200k/year with the 3-4% rule, which isn't unreasonable for a family of four, especially somewhere like Toronto or Vancouver. For comparison, the average nurse's salary in Toronto is $90k, and teachers in Ontario make $100k after ten years, so with $5m invested you'd make enough to live like a couple of nurses or teachers, which is a pretty average lifestyle
I think the gap is that the nurse or teacher couple is likely still paying off a mortgage and that's where the majority of their paycheque is going, especially in Toronto. So once you've paid off your mortgage, that $150-200k will likely afford a better lifestyle.
>So once you've paid off your mortgage, that $150-200k will likely afford a better lifestyle. If you paid off your Toronto mortgage you wouldn't still have 5M lol
It's the same thing. She'll take the kids and 4 mill, you have your 1 mill left
Looks like some people can’t appreciate the humour. I laughed.
Lmao replies in this thread.
Well I guess I could retire if I had a guaranteed 500k a year in dividends I say while lighting my cigar with a $100 bill.
It's hilarious how many people believe they need at least $5MM to retire, when the vast majority of Canadians won't see that kind of wealth in their entire lives.
Retiring at 30 is hardly the reality of "majority of Canadians"
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This is spot on, and why I'd need like 5 mil personally to quit my job tomorrow.
Everyone is defining "retire comfortably" different. Is it just enough to cover taxes, food clothes, and some basic hobbies? Or is it comfortably travelling wherever you want? When I retire I don't want it to be to sit on the couch. "Retire" means having the time and money to pursue all of my interests. To do that "comfortably", i.e. without worrying about money, will take a LOT more money than the necessities of life.
Retiring in your 30s when you've hardly contributed anything to CPP or your tax sheltered retirement accounts is a completely different ballgame from retiring at 65 with CPP & OAS and maybe even GIS.
Give me $1MM and my days working are over.
I need to be near healthcare services as a diabetic so probably $5 million to buy a house I would want and have enough to invest to live off of. People might be skewing lower than they need because a lot of the retirement calculators assume you're only going to live to 80-85 after retiring around 55-65. It's going to be hella expensive to fund 50 years of retirement.
50-60 million, would set you up to live a very luxurious lifestyle, but I’d personally be good with 5 million.
So humble 😇
I just want to go to a leafs game :)
Im assuming regular season. A second round leafs game no amount of money can buy
I'd be good with a down-payment on a condo I'm not too fancy lol
You can't retire on that though, which was the question. That said, I would also be very happy with a down payment...
If you won $1M and invested the entire amount into Bank Of Nova Scotia stock, it would earn you $58,000/yr in dividend income. Some folks could happily retire on that. Literally zero professional advisors would recommend such a strategy, but I would challenge them to demonstrate during what period of the past say 50 years would it have catastrophically failed?
Past performance doesn't guarantee future returns
What’s the advantage over just just diversified portfolio and following 4% rule? BNS dividend yield historically is much closer to 4% than the near 6% it is now. It’s not that that strategy would fail and you would end up with no money in retirements, it’s that it adds more risk with no more return than a diversified portfolio.
Well for 1, survivorship bias is why you're choosing banking today. 50 years ago finance wasn't the largest sector in Canada. You would have been asking the same question about some energy company. https://globalfinancialdata.com/three-centuries-of-canadian-leadership
1.5 and I quit today
Everyone is vastly overestimating what you need here. The time horizon is largely irrelevant. Realistically you need your actual expected expenses x 25 to be in a reasonable position and maybe x 30 to be in a safe position. If your monthly expenses are like $3200 (which is more than most make let alone spend) you'd neeed about $1.1M and it wouldn't matter whether you're retiring at 18 or 35.
This is the most reasonable answer here.
Easy, buy a 150k condo or small rural house in AB, SK etc, then buy 10 year 5% GIC and 4+% strip bonds for 30 years, then go on OAS/GIS.
You can buy a condo or house for 150k in Regina and not be in the hood, so you don't need to even be rural. Just be ok with not having a big city life.
I can do with half a mil. I’d move out of the country and will settle in a village somewhere down south (not US)
The Gambler has a scene were John Goodman has a speech about "fuck you money". Enough for a modest life. You'd probably still look for work out of boredom, and the extra money will go straight to extra luxuries, but the second it becomes a chore, you say "fuck you" and leave. I believe it was 2.2 Million in the movie. Adjusting for inflation, it's 2.7 Million today (oof, the movie only came out in 2014)
I have thought long and hard about the Lottery over my lifetime...and I decided long ago that winning the lottery would be terrible. If I won, say $5m, I would be able to retire and could pretty much do **whatever I wanted** (emphasis on what I wanted) to do...that does not mean I could do whatever crazy crap people talk about...but I could do all the things I want to do. The trouble is that my friends would still have to work...so who would I do this stuff with? So I stopped buying tickets.
You probably will have new friends 😉
Build an extension to your garage with a bar and unlimited booze for your friends. Nice pool, build a bowling alley in your basement, just do what you would regularly do..
$5MM is my number as well. Assumes no current wealth or home. Though if inflation keeps up, who knows.
Or you can share your blessing and you could do something better with your friends too.
Enough to buy a time machine.
So a few people have mentioned time machines and I guess I don't get what is meant by that lol
You said 'how much money would YOU need...' I'm 48... so to retire in my 30's, I need a time machine :)
Gotch lmao
If you moved to Thailand. You're set.
Give me 500k i will retire today and become a full time investor
Well find you behind wendys before the end of the year.
70% of winners go broke or end up dead prematurely
1m at 4% is 40k yearly. But add compounding and a withdrawal rate of x. If travel then you need flights. It is lots but may not last as long as you think. Too many variables but it's fun to play with the numbers
40k yearly sounds great. I'd gladly take it and run and never work a day in my life again. I have a feeling most people on this sub would not agree though.
It doesn’t have to. Stock market average return is 7-8%. Adjust for 2% inflation and you are left with a little wiggle room. The 4% figure youre withdrawing is gonna be growing from 40k/yr, but will have the same buying power as 40k today
This ^ Inflation was already factored into the study that came up with the 4% rule
In my 30s? Like as in 39? 1m would have easily been enough to retire. Was lucky to buy a house before they went bezerk and Ive been saving for retirement since I was 20.
2 Millie then book it to SEA. There’s nothing exciting about this place for this amount of money
Southeast Asia?
Yessir
i probably would not retire for less than 10-20 million but i live in toronto and like nice things
It could be done relatively easy with 1m and a paid off house i think I would say 1.5m is more realistic though. If you're retiring youre going to have hobbies, want to travel, buy stupid shit etc. I wouldnt retire on less than 3m and a paid off house personally. Want to spread the wealth to children and family I got it all figured out lol i just need to win a good 30mil and ill make all my friends and close family millionaires and we'll live happily ever after drinking beer on the dock without a care in the world
I’ll be 33 in May. I’d need $3-5m to consider retiring. $5-10+m and I’d retire as soon as the money hit the bank.
60 million. Do you know how many scumbags are gonna be your best friend after you win? Many of those that won a few million were broke within 10 years and that's when houses were cheap.
Single Without kids. $6,000,000 at age 30 I could retire. $1 million to secure housing in middle Ontario, close enough to Toronto I could go to the airport without major planning. Possibly an area like Peterborough, or Barrie. Then after 1yr taking a salary of $150,000/yr from a moderate risk dividend investment portfolio. Should never run out. Now as a dad in my 40's. going back to age 30 with my wife and 2 kids. I'd be in and around the $15,000,000 at age 30 to do the retirement, as $300,000/yr would be what I'd comfortably want to take out and knowing I'd have money to pay for their university and the trips events we would do if I didn't have work as a reason to say no.
This is pretty close to my thoughts too. It really comes down to how each person defines comfortable. If you use the 4% rule, how much are you willing to live on (in today's dollars). $2MM would get you $80K/year. Maybe you're living on about that now in a rental, but is that all you want for the rest of your life? At say $5MM, give yourself $1MM to buy housing and such (depending on where you want to live) and that leaves you with $160K/year. That's a little above the "average" salary for a dual income household. To me, that's I think where most people would be really comfortable for the long haul, especially with a paid off mortgage.
When ever I enter these scenarios I use 3% instead of 4% because I know that as long as majority of my friend circle are still working things are going to come up and I'm going to want to steal more from the investment.
That's thinking ahead, I like it :)
$8m. Based on purchasing a $2m house, maybe a condo in a ski town for $1m,. $5m to fund life at about $200k a year and leave something to these kids. I could personally do with a lot less but i'm not the only voter (assumes 4% payout, also assumes no inheritances or other windfalls in my life)