Am I ready to Retire? Part Three - the role of my Tax Free Savings Account
As I tinker out the kinks of my Retirement income structure I may as well show some of the produce from my garden since financial talk can get boring.
My first sure sign of Autumn is when I see these happy orange gourds...
“Black birds tend to like shiny things.” ~ The Bloody Raven.
I have been far from idle over the summer. With what little time and energy I have is prioritized for my two sons, wrestling with relative's issues, and finalizing all my post retirement income streams. Crossing the Tees, dotting the Is, the dizzying myriad of forms to be filled out.
Canada Pension Plan ✔️ Done.
Old Age Security ✔️ Deferred but Done.
Municipal Pension Plan ✔️ Finally done and approved Pension income guaranteed over 15 years. If my condition doesn’t improve I may not last beyond ten years tops. The remainder of my Municipal Pension plan is assigned to my eldest son.
Registered Retirement savings Plan I just need to sign ONE form before checking off!
The Registered Retirement Plan (RRSP) similar to the USA’s Independent Retirement Account (IRA), will have to be switched over to a Registered Retirement Income Fund (RRIF) before I can begin withdrawing a minimum of 4%. I plan to withdraw 8% to try to melt it down faster and earlier over the next three years. The primary reason is to minimize the Tax Trap, the trap where my Mother’s Retirement funds fell under the rules of Deemed disposition, netting my crony government a windfall at the expense of my Mom’s estate. It was not small potatoes.
I approximate withdrawing $12,000 to $14,000CAD which seems high but I have planned a supplementary Charitable Donation program credits to offset my Payable Taxes over the next three years. This puts my gross income to a comfortable $48,000 income leaving me room before crossing into the next $56,000 higher tax bracket. Already, I have an income managing Estate funds already eating up most of that room.
TFSA
What this boils down to is for me to pad any unspent after-tax funds into my Tax Free Savings Account (TFSA). This should be more accurately be called Tax Free Investment Account. I think this is a little misdirection lulling most Canadians into putting their long termed savings into Savings accounts earning almost 1% interest at best.
Simple plan with but vague rules, that is withdraw sufficient funds from my RRIF, pay the minimum tax, and invest it into the TFSA where funds and capital growth can be withdrawn Tax Free! The only hitch is that I all allowed to contribute a limited amount set by the government each year.
I can almost afford an average plane trip each year. Alternatively, tuck away the funds into the TFSA every other year and travel every second year. Well, if I am healthy enough I will start with my Bucket list destinations.
So far, my TFSA has $70,000CAD with room for another $40,000. One must be careful not to over contribute into this TFSA, the penalties are quite stiff for over zealous contributors. Also, funds in a TFSA are meant for passive Investment Growth and not meant for active trading and would therefore be deemed as Earned Income. It’s one of those ‘unwritten rules’ not mentioned in the TFSA brochure.
Upon my death, my TFSA would be de-registered, split 50%-50% and transferred to my sons ‘In kind’ that is, the assets remain un-liquidated as to maintain the same asset profile intact and continue it’s growth under their names. I will have to contact their respective Financial planners to get advice on how much of the capital can be contributed into their own TFSAs.
My TFSA currently comprise of; A high Interest cash account, A high Dividend yield ETF, Shares of a local Telephone and Internet service corporation that pays a 7.5% Dividend plus a local provincial extra tax benefit, a Money market fund and of course a Physical Gold and silver ETF. Can you guess the Precious metals ETF?
Pirate Retirement Fund aka Central Bank of Ravenhill fund
I haven’t slacked one bit from Stacking over the summer. The RCM and Sunshine mint 10 Troy oz. Bars were my July Dollar Cost Average (DCA) buy, a coincidence @fat-elvis ? And the tube of 25 random second hand silver maple leafs was my August DCA buy.
The 25 coin tube were what I expected, milk spots, finger prints, bumped and nicked yet perfectly good Maple leafs from a previous Stacker. I was also looking for a 1996 and 1997 Maple leaf for a friend 😉 to complete his set. No Luck in that department though I got a nice 2017 Reverse Cameo Privy.
I am looking forward to this Fall season. Life will be very much different with new goals, responsibilities and on my terms. Chinese Mid-Autumn Festival begins October 1st to the 8th and Mooncake day is October 6th. How I would love to visit Hong Kong to see this festival.
I can’t eat too many of these Mooncakes as I used to. 🌒
How much am I allowed? 🤔
It’s trial and error to find out for sure.
I'm glad to have you here, thank you for dropping in ⛵️
Stacking Precious metals and Crypto for those dark stormy days!
The #piratesunday tag is the scurvy scheme of Captain @stokjockey for #silvergoldstackers pirates to proudly showcase their shiny booty and plunder for all to see. Landlubbers arrrh… welcomed to participate and be a Pirate at heart so open yer treasure chests an’ show us what booty yea got!
References & Sources
Photos are my own shot with a brand new Galaxy 24 FE or otherwise indicated.
P. Image under Pixabay
W. Wiki Commons
☠️🎃 Page Dividers by thekittygirl. ❄️🌞
Cameo Raven Brooch from The Black Wardrobe.
Physical precious metals bullion stacking is only a part of my personal overall financial strategy. Meanwhile, collecting numismatics are a different set of objectives and strategy. Unless you are a complete nutcase as I am please, do your research before deciding to buy into any bullion or numismatic products.
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With that many pension plan and also the amount that you have, if you were to live in my country, you will live very nicely. even with a helper in your home.
I am so happy that you sort your pension plan, super awesome,
and those harvest are so lovely as well.
I have never grow pumpkin, but they all looks spotless and healthy.
!PIZZA !LUV !PIMP
The cost of living is high compared to the standard of living here in western Canada. I have five sources of passive income consisting of 4 Pension incomes and rental income from two properties that make my minimum base income of $48,000/year CAD. Investment and any side gig income merely adds to it as a bonus.
I am aware that there are places I could live on the cheap, and they do sound attractive. It's something i can consider when my Sons no longer need to depend on me.
Thanks for the comment @ekavieka
🎃
!HUG
!PIZZA
Well with that income you can surely live very comfortably here. The most I can make yearly when I was still working was arounf 8K cad, which is already cosidered quite high here in my place, with the monthy minimum income is around 300 CAD.
here is the video of a young Canadian who build a villa here in my island, but I believe the land is leased, as there is a law that prevent foreigner to own a land here in my country.
But yeah, the living condition is not as great as it is in Canada or any western country, unfortunately.
!LOLZ !LUV !PIZZA
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But not as fast as his brother Sudden Lee.
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Come get MOONed!
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Thank you @stresskiller
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Happy #PirateSunday
Young Lady @kerrislravenhill
Stay Positive and You know things will be Golden, or in our case SILVER
!LUV
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!PIZZA
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I'm doing pretty well having lined up a decent retirement income even if I didn't include my Pirate Pension. We also know that we can't rest our laurels on the promise of social security either.
Remember that the Reserve can print up cash in any size and shape for our pensions but cannot guarantee their buying power.
Bilge rats, I lost count of my Pirate pension.
!LADY
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I had no luck with my Strawberries… Next year I’ll only let them get the Morning Sun…
I lose a few every winter, a few more during the summer as my arch-rival 'Steve the Squirrel' 🐿 regularly disturbs the plants by trying to bury his nuts in my strawberry pots. Mr. Teech 😼 almost had him a few times but Steve just manages to get away.
The struggle continues...
:) Nice! looks like u got quite the plan in place and things are in motion. As I now enter my 2nd life, I am starting pretty much at zero. I will try and stack a little, but my recent divorce has left me pretty broke. oh well.. I get to have a 2nd go of it and try to plan for my 'retirement' now.
Well over twenty five years ago I had to make a major life course change and smartened up to make a better life for my family and commit to it.
With two son's to raise I made some goals, chose a career, borrowed a little cash, got a job, learned to handle debt, save and invest.
As they say, "The best time to start was yesterday. The next best time is today!"
Thanks for visiting @chinito
!HUG
🎃
YES! Big props. 😉👊
Way to go, sis!!! I bet sorting out several pension plans must be a pleasant experience !LOL. Are you definitely retiring, or thinking about it?
Much !LUV sis.
!BBH
!LADY
!PIZZA
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It's a done deal, early retirement begins on mu DOB in November, pension income begins and Employment Disability benefits end.
Two public pensions.
A semi-private defined benefit Pension with a enhanced Health insurance deal.
My personal Registered Retirement plan/RRIF/IRA.
Plus...
Passive income from two Rental units.
TFSA and Non-TFSA (Emergency Reserve Cash) Income.
Fun Fact; My Pirate Pension is had performed better as is greater than my Registered Retirement Savings Plan. ☠️
Always, with !LUV 🤗🌺❤️
!LADY
A good amount of harvest! And I must say, you are all set for Halloween 🎃. You're presenting a great harvest: garlic 🧄, tomatoes of nice varieties 👏👌. That's great, friend! A nice coin collection.
I like plants, but mostly cacti 🌵 lol. I'll leave you with a photo now. Big greetings @kerrislravenhill and have a lovely Sunday! 🤗😊
What pretty golden blooms, do these have a strong fragrance too?
My mother kept a few succulents, I have a Christmas Cactus that last had white blooms around Easter, a rescued plant at 50% off the original price.
Before I could add more I must unclutter my home.
Thank you for visiting @ibarra95
!KUV
Ohhh!! Yes, yes, the Christmas cactus! Here in Cuba 🇨🇺, I've seen them in white, orange, and red. It's a species that's super hard to grow here in my city. They reproduce best when grafted onto another cactus—that way they produce better flowers in winter.
I really liked your post, friend!! Greetings to you, and have a lovely Monday evening from my country!! 😊👏🙏🏻🤗
What a great way to mix two amazing topics sis...financial smarts and gardening! 💖 Your retirement plan sounds very solid, and it's awesome to see how you're optimizing everything 🙌 Your garden looks fantastic ✨ Love your silver stacks too! 💕
Floral and vegetable Gardening has been a favorite past time but I had to put it aside for the last several years because I was so busy that I never had the free time until I went on medical and disability leave. I can no longer work as a Nurse by profession being diagnosed with Parkinson's disease. Since I lost my fine motor skills I have difficulty typing.
Gardening is an extension of my nurturing nature, it also represents independence and a sense self reliance. My long neglected garden needs a lot of work and is a long way from being my private paradise.
Each Pension income is funded differently, this redundancy minimizes tail risk should there be a catastrophic economic upheaval and my country goes broke. Because of the major flaws of the fragile fiat currency system I expect half my pensions will survive but when it happens is where my gold and silver stack comes into play as my backup. My silver stack has been fun to accumulate but actually is my financial insurance policy.
Thanks for visiting my blog @wanderelle
!LADY
❤️
Im trying to figure out when to retire. I have a defined benefits pension, one of the last I suspect. There is so many rules and penalties it's not even funny. I have about 27 years in the company and if I retire this year, I'll lose about 60% of the pension to penalties.
Nice 10 ouncers!
There should be professional advice available and it may be worth paying a fee to untangle all the pension rules and present you clear options.
Penalties can be brutal.
My municipal pension plan is a defined benefit plan, it does have a certain criteria for early retirement especially for police, fireman, emergency etc. that always face high stress conditions and career impairing injuries would allow full retirement as early as 55.
Otherwise it's 65.
My union had some good advice and help.
I'm still tinkering and fine tuning over a spreadsheet year over year.
I hope you can find your answers.
Thanks for coming aboard me blog @fat-elvis
!BEER
Take care of yourself my friend health is so important!😇😊
Retire as early as you can and enjoy!🤗
And most important is time with my adult sons, even as they are no longer babies. Going out to dinner together. Outings together. Shopping together. Cooking together. Doing home projects together.
Being an 'At home' parent feels a bit strange to me but for now I relish it and making it up for all those working years away from home.
Thanks @silvertop
!LUV
!PIZZA
Time spent with your sons is so very important!😍
We are headed to our youngest son’s home down by Seattle this weekend to spend time with him, his Wife, and our one Month old Granddaughter Olivia!🥰
Sound like you’ve got it all figured out and in place. Smart move, if you are smart that stack of yours will be tax free as well.
I can still stack some but not in the same pace as I have gotten use to.
80% of the homework is done.
My game over the next three years will be how much more taxes can I legally keep from paying. I know a few charities that are far more efficient with my cash than my government.
An Interesting fact, My Gold and silver Stack out performed and is worth more than my RRSP/IRA.
!PIMP
Sounds like you've got things under control sis! I hope you get to go to Hong Kong and witness the festival in the near future.
Thank you for sharing and have a wonderful evening! !LADY !LUV
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Applying for my Passport will take approximately 8-10 months and $175CAD, so maybe next year but more likely 2027 if I can get my health back sooner.
Thanks for the support Sis! ❤️🤗✈️
!LADY
You are most welcome! Much love sis!🤗😘😍❤️ !LUV
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I love all the garden photos, I love fresh veggies, especially tomatoes! Good for you on the retirement and financial security, you have played those cards well and set yourself up for a comfortable existence over the next many years. And your sons will appreciate the pirate treasure and tax free fund as well, but hopefully you don't go trying to kick the bucket on us any time soon. I'm trying not to myself. lol
I'm glad things looks good for your financial security, well done!
!BBH
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!PIZZA
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Financials is a boring but necessary topic. I'd put my readers to sleep if I used screenshots off my spreadsheet and tax return scenario outputs. Rather, I used my colorful garden veggie pictures. And in true #SGS fashion show my stackage for the summer as the cherry on top.
The nice find was this...
2017 Reverse Cameo with Privy. Now I have ONE of these!
If there is one song that sums up my feelings today is 'Staying Alive' by the Bee Gees, And I'm not too keen on Disco music.
Thanks for commenting @thebighigg
!BBH
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Autumn 🍂 is in the air!!!! 🖤
My vote is drained at moment
So here’s a HSBI!!!
@kerrislravenhill
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