Carrick on Money

May 19, 2019

‘I’m hoping to retire early, at 58’
‘I’m hoping to retire early, at 58’ - Globe subscribers weigh in on a reader question in the new Globe and Mail Retirement Forum

Rob Carrick

Personal Finance Columnist
The Globe and Mail Retirement Forum is open for business. Globe subscribers are invited to send their questions about retirement and I’ll post them for comments. Our first question was posted this week and readers, most of them retired themselves, jumped right in. Here’s the question…

Don Maxwell, 51 Lives in Toronto: I’m hoping to retire early, at 58. We typically hear about planning to live on 70 to 80 per cent of your pre-retirement income. Without a mortgage and without the need to save for RESPs or work-related costs, this seems high. I’d like to hear from actual retirees about what amount makes sense. I understand it’s relative, so I will say that in my retirement I want to be able to travel. One big trip per year – comfortable, but we aren’t talking luxurious accommodation.

My thoughts: The percentage of your working income that you need in retirement is referred to as the replacement ratio. Of all the measures of retirement readiness, the replacement ratio is one of the weakest. A 50 per cent ratio might work well for a person who intends to live modestly, while 100 per cent or more might be required for someone with big plans and expenses. Financial planners sometimes used 70 per cent as a default replacement ratio.

Here’s a quick look at some of the answers from other Globe subscribers:

Globe Sub #1: I retired in 1994 with half of my working salary, a little over $50,000, gross. My wife had no income. I was 62, so took out my CPP. We had absolutely no problem maintaining a good standard of living. We had absolutely NO debt. When I turned 65, I took out my OAS, then of course came my wife’s CPP and the OAS. Between golfing for six months in Florida every winter and the six months golfing in Canada during the summer, we travel a lot. Without being stupidly lavish, we continue to have funds left at the end of the month. We’re frugal but get everything we need. So I figure, with the advent of spousal income-splitting, If you have $60,000 gross family income, you can do most everything you would want to.

Story continues below advertisement

Globe Sub #2: How much do you spend now? That is what you will need in the future unless you are going to drastically reduce or increase your spending. What are you going to do with the rest of your life? Play bridge? Pretty cheap. Travel the world? Expensive.

Globe Sub #3: We retired four years ago at 62, and in my experience, most middle- to higher-income people should be able to live well on about 50 per cent of their preretirement income. My wife and I are doing well on closer to 40 per cent of our preretirement income, living pretty much the kind of lifestyle you seem to be aiming for.

I’ll introduce the next post to the Retirement Forum in two weeks. Send me your questions at

Subscribe to Carrick on Money

Are you reading this newsletter on the web or did someone forward the e-mail version to you? If so, you can sign up for Carrick on Money here.

Rob’s personal finance reading list…

A security risk with e-transfers

How a woman had $1,734 stolen through an e-transfer to a friend to reimburse her for expenses on a vacation. A hacker ended up guessing the password that the sender used and was able to intercept the transfer and deposit the money. A lesson in the importance of using strong passwords for e-transfers and on the limits to the security guarantees offered by banks for electronic banking.

Let your kids go into debt

Hey, aren’t parents supposed to teach kids to avoid debt where possible? Here’s an article that makes a persuasive case that the best way to get an anti-debt message across is to let kids borrow money from you and then hold them accountable.

Why 10-year mortgages are unpopular, and what can be done about it

Bank of Canada Governor Stephen Poloz has suggested that more be done to promote longer-term mortgages, say 10 years and up. An experienced mortgage broker explains here what could easily be done to make 10-year mortgages more competitive.

Job-hopping is the norm for millennials

The negative stigma of changing jobs frequently is on its way out. “Millennials can earn a higher salary, grow their career, change locations more frequently and find a better cultural fit from job-hopping.”

Today’s financial tool

Lots of useful, unbiased information on home-buying, mortgages and renting in this package of resources put together by the Financial Consumer Agency of Canada.

In case you missed these Globe and Mail personal finance-related stories

  • Ten ideas for spending your tax refund
  • Are wardrobe-rental services worth the cost?
  • Interest-only mortgages have quietly resurfaced in Canada, and with careful use, they could boost your retirement savings (for Globe Unlimited subscribers)
More Carrick and money coverage For more money stories, follow me on Instagram and Twitter, and join the discussion on my Facebook page. Millennial readers, join our Gen Y Money Facebook group. Send us an e-mail to let us know what you think of my newsletter. Want to subscribe? Click here to sign up.


Did you know? - We also have a Globe Investor newsletter to help you with investing ideas and strategies. Sign up today.

For subscribers
Introducing The Globe Retirement Forum, a place for Globe subscribers to ask questions about retirement and receive answers from a community that includes retirees.
View More
About this newsletter
This is personal finance columnist Rob Carrick’s newsletter. It is sent two times per week. Visit The Globe's Personal Finance section.

To unsubscribe, use the link at the bottom of every email communication. Or log in to manage your Communication Settings.

Can't log in yet? Registration is free and allows you to read more for free. Tips to stay logged in.

For feedback email editor Roma Luciw or Rob Carrick.