5 comments

  1. I like the take away about just getting started, no matter how much or how little. You really do need to just get started.

    Also, retirement is painted as this time in your life where you live in a big luxurious house, taking expensive vacations, dress in expensive clothes, and go eat out often at nice restaurants. If that is what your vision of retirement truly is, well better get started on saving for that!

    But retirement is to be defined by each individual. We need to be able to visualize what kind of life we want to live and what kind of life we want to be living in the future. Then plan accordingly for it.

    Also, I think I’d rather pay the taxes now and have no taxes on withdrawal than the other way around. In Canada, we get tax deductions for contributing into a retirement account now, but get taxed later. I’m sure in both cases it’s really a wash what is more beneficial. I guess I don’t want to pay taxes later!

    1. Awesome comment. I’m kinda sick of the stock photo used in retirement promotional materials of senior citizens sitting poolside with an oversized umbrella and margaritas.

      In Canada, do you have a retirement program like the Roth IRA in the U.S? taxed now but not later at withdrawal?

      Also, I am working on a series on health insurance and I am even more jealous of your health care system.

      1. The RRSP is the main retirement savings vehicle. It’s tax deferred. If you’re not careful, you might get taxed at a higher rate at withdrawal than at contribution.

        We also have a Tax Free Savings account which has a contribution room of $25k currently and increases $5000 every year. You put your after tax money into it but there are no taxes on interest/dividends/capital gains that you reap inside of it and no taxes when you withdraw. So I guess it’s similarish to a Roth IRA?

        Haha and in terms of our health care system, yes it’s nice, but it’s paid through high taxation! Everyone hates high taxation 😛 especially down there in ’emurica right?? 🙂

  2. Many good points! People (especially young people) need to simply start while time is still on their side. Amazing how much wealth can be created in 20 or 30 years with only a few dollars stashed away every week/month.

  3. In Australia we have superannuation to cater for our retirement. We pay (reduced) tax on our earnings through the vehicle and the government gives financial incentives for people on lower incomes to contribute to theirs. Employers are mandated to contribute to our funds at a rate of 9% of our annual salary p.a. Recent legislation has it pegged to go up to 12% by 2019.

    Most people hold their superannuation accounts in managed funds in which they pay fees and pay little or no attention to them. A “balanced” fund option is usually the default that you get signed up to when you open the account unless you select otherwise.
    On top of this, people usually take out life insurance, total and permanent disability insurance and possibly income protection insurance through these accounts, paying the premiums through their accounts.

    From what I have experienced, most people have little faith in the system at all. Especially after they all lost money in the GFC.

    I haven’t made up my mind yet. I’m contributing enough to get the maximum government co-contribution but I’m making other plans for my money as well. I think the set up of retirement funds, the way they operate in most countries, dis-empowers people and encourages financial neglect. It also makes many fund management companies wealthy because people HAVE to put money in.

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