About this video

• Video Title: What Does It Take To Retire With 10k/Month?
• Channel: Well Built Wealth
• Speakers: Rees (implied as the narrator and presenter)
• Duration: 00:19:50

Overview

This video explores the financial requirements and various scenarios for a couple to retire in Canada with $10,000 per month after taxes. The presenter, Rees, uses financial planning software to illustrate three distinct scenarios: investments-only, pensions-only, and a blend of investments and pensions, with an additional consideration for downsizing a home. The video emphasizes the impact of inflation, investment returns, and strategic income phasing on retirement success.

Key takeaways

• Retirement Income Goal: The video focuses on achieving a post-tax retirement income of $10,000 per month for a couple in Canada.
• Three Retirement Scenarios: The core of the video examines three distinct paths to retirement:
  • Investments Only: Relies heavily on personal investment portfolios, requiring a significant nest egg.
  • Pensions Only: Centers on defined benefit pension income, with minimal reliance on investments.
  • Blend: Combines pension income with investment portfolios, offering a balanced approach.
• Downsizing Consideration: The third scenario also incorporates the impact of downsizing a home on retirement finances.
• Phased Retirement Income: The video demonstrates the effectiveness of a "go-go, slow-go, no-go" spending strategy, where income needs decrease in later retirement years.
• Impact of Inflation: A consistent 3% inflation rate is factored in, highlighting its significant effect on long-term retirement spending needs.
• Key Variables: Factors like investment return rates, CPP/OAS benefits, pension indexing, and withdrawal strategies are shown to have a substantial impact on retirement readiness.

Based on the video, here's how investment requirements are presented:

• Scenario 1 (Investments Only):

  • The initial portfolio size for Greg and Peg was $1,760,000.
  • With this portfolio, they were 97% on track to meet their retirement goal.
  • After implementing optimizations like delaying CPP and optimizing withdrawals, they reached 102% on track.
  • To achieve 101% on track with these optimizations, a portfolio of $1,450,000 was required. This is approximately $300,000 less than the initial amount, demonstrating the impact of these strategies.
  • If a higher rate of return (7.2%) was assumed, a portfolio of $1,250,000 would be needed to be 99% on track.

• Scenario 3 (Blend - Investments and Pensions):

  • Bert and Ger Schur started with a combined portfolio of $750,000.
  • With this, they were 98% on track.
  • After implementing the phased income strategy, they moved to 112% on track.
  • Even with a reduced portfolio of $650,000 (after a $100,000 reduction), they were still 109% on track with the phased income strategy.
  • If they were to downsize their home, their portfolio could be further reduced to $550,000 and they would still be 116% on track.

The video emphasizes that the required investment amount is highly dependent on the specific scenario, the inclusion of pensions, the rate of return, and strategic planning like phased income and delaying CPP.