Hey Tina what's one of the biggest terrors of retirement - I think that has to be
are we going to run out of money - Oh I thought it was living closely to your Wife
- What! Norm - So what did we do to try and ensure that we wouldn't run out of money in retirement
- Well one of the things we did was because we both wanted to travel when we retired
we decided we needed to set a budget to take care of this so at the time Norm was 60 and I was
58 so we thought if we have a 10-year allowance of traveling we needed to allow ourselves
we worked out that we would take $25,000 a year times the 10-year that it could
potentially be out of our budget cost us $250,000 for our traveling for 10 years wasn't it Norm
- Yeah we don't know what health issues might crop up to us so we were giving ourselves a 10-year
window that would put me to 70 years old (yeah) and we both agreed to around the $25,000 mark but that
wasn't set in stone if we only spent $15,000 that would be fine if it met our ambitions for travel
so back then we were using cruise ships we used to enjoy doing cruises it would get us to
multiple countries it was good for our business because I could take photographs and videos
and then license those clips and photographs so it helped pay for the trips but we realized that
in wintertime we want to spend 2 or 3 months from the Canadian cold so we came up with
$25,000 so how are we doing against that - Well the funny thing is when we keep doing
a budget every now and then to sort of add up everything and we're actually growing our money
what we thought the pot was going to be going down the pots going up Norm - And we
do these reconciliations of our net worth a couple of times a year just for peace of mind because
there's that nagging fear in the back of your mind that you're spending money and you're running
out of money so we took I think we've said this in other videos we divided our capital in half
invested half of it in dividend paying stocks some U.S. and Canadian primarily through the TFSA so
it grows tax-free and we max that out, the rest is in cash just for a really good rainy day fund
- So for example to let people know if they had a chunk of money of like $250,000 if you were
getting what we said about 4 to 5 percent that would generate maybe about $10,000 a year
that would be topping up your money one thing that we would say we probably underestimated
was we weren't looking at how the government money would come in to top it all up so
- Because this was pre us being old enough to get the Canadian CPP or what the U.S. would
call social security - And the OAS we hadn't really factored that in - We did underestimated
what impact that would have on our income coming in and so we're able to get around
$2000 to $2300 in schemes like that from the government which helps enormously so we don't
have to touch that capital - It's great isn't it so instead of it going down it's actually going up
- The other thing to realize is with dividend paying stocks is that nearly everybody thinks
about the dividend and that's partly why we're doing it we want that 5 percent
or 4 percent quarterly deposit into our account but don't underestimate how dividend stocks
have been growing over this last 15 to 20 years many of ours have trebled or quadrupled in value
as well as the dividend - Yes for the actual stocks growth this money as well as the dividend
- It really is so what we're saying is if your unsure as to whether you have enough money for
retirement explore the government pension programs the old age pensions in your country
see if you can find out what you're going to be getting at a certain age 65 or 67
and then use that in your budget but don't be afraid to spend money and enjoy it while you
have your health and mobility that's the thing the message that we really want to say - I think so
isn't it it's really important to enjoy it because we didn't know at the time did we happily made
our budget knowing that we would allow for that and now it's a really pleasant surprise isn't
it - And of course with the circumstances for the last 18 months we haven't been able to travel
internationally so we've used part of that money to acquire the trailer and the car yes
so it really hasn't blown the budget at all in fact it's under the budget that we've
set - Yeah and now they're becoming assets aren't they so now we've got assets in our
life too - Obviously the car is depreciating in value but the trailer because it's on a
exclusive site it's actually worth double what we paid for it - It's just great isn't it
it really is - So we are saying don't be afraid to enjoy your life and you know the money kind of
will almost take care of itself won't it - It will just we run our life slightly frugally
so we don't line up with the Apple store to get the latest iPhone or the biggest screen TV that
comes out we're content with what we have and I think if you can do that that's the recipe
for your money to last longer in retirement - Isn't it - So to answer that question no our money isn't
running out in retirement and we should still have enough left if we wish to leave a legacy
to our family then it'll be there but the power of compounding interest and dividends stocks
it's surprising - Yeah should be able to keep us going till we're both in our 90s hey Norm
- Certainly you Tina I probably won't get there you've worn me out - Oh dear
we hope not well we're just enjoying getting older together aren't we and it's great - So thanks
for watching we really appreciate the support that we're receiving from all of our viewers
- And we hope everybody is keeping well - Staying safe - Till the next time bye bye, bye bye