[2Cdo]

ASLplease ASLplease:

DerbyX DerbyX:

Well I routinely put 25% of my pay into my RRSP. The first 2 and a half years I did it I got a yearly return of 17%. No fooling. Then the stocks hit the big decline. That hit hard. Its averaged out still pretty good at a 6% return but with RRSPs there is the added bonus of bringing down my total income thus lowering not only my fed & prov taxes but my health care premium.

It amazes me the number of people at work who do not take advantage of the companies policy of matching contributions. They are literally throwing away free money.

has the 18% cap for the RRSP contributions limit been shifted to 25%?

In a nutshell, no. you can contribute 100% of your pay to RRSP's if you desire but can only claim 18%. I contribute my 18% every year, and am currently doubling my mortgage payments to wipe that out. My RRSP account did take a bit of a hit over the last year or two but since I'm not using any of that for income yet I don't worry too much about it. Myself and my wife did this raising two boys, one who went to university and one who went to college and we matched their savings so that neither had any student debt. It can be done if one desires.

[Yogi]

Some people go to sleep, and dream.

Others stay up and make it happen!

[BartSimpson]

Yogi Yogi:

Some people go to sleep, and dream.

Others stay up and make it happen!

Amen, brother.

[ASLplease]

and others sleep while someone else makes it happen for them.

[Strutz]

BartSimpson BartSimpson:

Strutz Strutz:

I've NEVER heard that percentage before. I have heard you try for 10% (and how many of us can even do this?), but 33? You've got to be kidding.

Lisa and I are saving about 40% these days. After the house was paid off we continued making 'mortgage payments' to savings and that accounts for most of that 40%.

Early on we made the goal of being debt-free #1 even as we did set aside savings because the best way to save money is to not be giving it to the bank in the form of interest. Now we owe nothing to no one and it is a great feeling not to be in debt bondage.

You're very fortunate to not have mortgage payments to make, no wonder you are able to save at that rate, good for you! For me, it is the only debt I have though and, like EyeBrock, I have a low interest variable as it is not worth it to lock in yet. It at least makes my payments reasonable enough that I have no reason to incur any other debt.

Besides aiming to save 10% of your income (or the 33% Dragom suggests) I've always heard that you should have 3 months expenses available in case of unexpected unemployment. If 59% of people live pay-to-pay as this article suggests then I don't imagine this group has that safety net in place.

[BartSimpson]

Strutz Strutz:

You're very fortunate to not have mortgage payments to make, no wonder you are able to save at that rate, good for you! For me, it is the only debt I have though and, like EyeBrock, I have a low interest variable as it is not worth it to lock in yet. It at least makes my payments reasonable enough that I have no reason to incur any other debt.

Besides aiming to save 10% of your income (or the 33% Dragom suggests) I've always heard that you should have 3 months expenses available in case of unexpected unemployment. If 59% of people live pay-to-pay as this article suggests then I don't imagine this group has that safety net in place.

I'm 46, too. It's time to be debt free and to start saving for retirement. If possible, I'm wanting to stop working at 55.

[Yogi]

BartSimpson BartSimpson:

Strutz Strutz:

You're very fortunate to not have mortgage payments to make, no wonder you are able to save at that rate, good for you! For me, it is the only debt I have though and, like EyeBrock, I have a low interest variable as it is not worth it to lock in yet. It at least makes my payments reasonable enough that I have no reason to incur any other debt.

Besides aiming to save 10% of your income (or the 33% Dragom suggests) I've always heard that you should have 3 months expenses available in case of unexpected unemployment. If 59% of people live pay-to-pay as this article suggests then I don't imagine this group has that safety net in place.

I'm 46, too. It's time to be debt free and to start saving for retirement. If possible, I'm wanting to stop working at 55.

'Freedom 55' is overrated! ( I guess I'll find out in a few more days)! The problem with being retired is that you never get a day off!
I've been semi-retired for the last few years, and that works really well for me. I can pick and choose my jobs, or just say "I'M already booked for that time", if I want to do my own thing. Working periodically, I don't have to dip into my savings. I live on, and play with the money I earn, same as most people. I've never had a mortgage though. Always took out a personal loan. Longest I had to pay for was 4 years. After that I flipped some real estate. When I started looking around for my 'retirement home', I bought a 'project house that was just bearly livable, and was able to pay cash. Then I bought the majority of building supplies to do the renos that I want. All is paid for as I go along. Anyone CAN do it the way I did, they just need 'dedication to self' and 'determination to acheive'.

[BartSimpson]

Part of why I want to be retired early is that I am coming due for another knee replacement and it'd be nice to just fuck around instead of working my ass off like I'm doing right now. I'm logged into the network at the shop doing changes on the Exchange cluster and I'd much rather be playing a game or sipping a beer with Mrs. Bart.

[Yogi]

BartSimpson BartSimpson:

Part of why I want to be retired early is that I am coming due for another knee replacement and it'd be nice to just fuck around instead of working my ass off like I'm doing right now. I'm logged into the network at the shop doing changes on the Exchange cluster and I'd much rather be playing a game or sipping a beer with Mrs. Bart.

I hear ya Buddy, I'd rather be sippin a beer with Mrs. Bart too!

[DerbyX]

ASLplease ASLplease:

DerbyX DerbyX:

Well I routinely put 25% of my pay into my RRSP. The first 2 and a half years I did it I got a yearly return of 17%. No fooling. Then the stocks hit the big decline. That hit hard. Its averaged out still pretty good at a 6% return but with RRSPs there is the added bonus of bringing down my total income thus lowering not only my fed & prov taxes but my health care premium.

It amazes me the number of people at work who do not take advantage of the companies policy of matching contributions. They are literally throwing away free money.

has the 18% cap for the RRSP contributions limit been shifted to 25%?

As far as I know the limit isn't based on %income. According to the CRA, the 2010 limit is $22000. The 2009 limit was $22000 and the 2008 was $21000. In addition you can rollover unused contributions and they add up. Personally I think Canada's RRSP system is wonderful. Its a good incentive to put money away.

[ShepherdsDog]

I was told that for the first 20 yrs. work for your money and then make it work for you. Both of our homes were bought and paid for, kid's educations paid for, grave plots bought and retirement plans settled all before I turned 40. Good management with some good luck(investments) paid off. I lost a little during the 'recession' but nothing that had us reevaluate anything.

[Regina]

I haven't read all the pages here but simplest advice I can give any young person or couple starting out is never buy something you can't afford just because you can get credit. Pay off your mortgage as fast as you can and don't buy a brand new car every 2 or 3 years, use that time to save for it. Save your money then buy unless it's an emergency.......holiday trips to Mexico or wherever is NOT an emergency. Credit cards?... goes without saying. If you can't pay it off at the end of every month.......you can't afford it.
The only long term debt I've ever had was a mortgage for 8 years.......and that was finished 13 years ago. We live in a new house and don't owe anybody anything.

[herbie]

DerbyX DerbyX:

Technically I'm well out of debt, meaning that I could use all my assets and pay off everything I owe and still have money left over but I'm still paying off some loans. Simply put I make more money contributing to my RRSP then it costs me in interest.

Here's how you'll be rewarded for your efforts:
Went thru divorce, business failure in the late 90s. Paid off every single bill over 12 years, lived like a peasant. Bought a $300 lawnmower and $700 TV out of savings, that's all. Didn't charge a damn thing, paid cash. Didn't buy a damn thing I hadn't saved up for.
Went to buy a house and got declined. Credit history too old to consider, bank says I have zero history at all. Two banks and a broker want me to fill out a 90 day history of where my down payment came from.
Only a fucking criminal has no credit history, the down payment was obviously stolen or derived from illegal activity. I think I will fill out the form and state it was "gifted by Pablo Escobar"....
fuck this

[Robair]

Sorry! What happened isn't funny, but your post is!

Buy everything from groceries to gasoline on a credit card and pay it off before the end of every month. You'll get your credit rating AND you wind up ahead assuming you choose a card with rewards that suit you.

[GreenTiger]

I think the number is high than that.