I have been saving since I arrived in Canada 25 years ago. During my first year I saved as little as $10 month, but in general I saved about $25 during the first 10 years, then I increased the amount I was saving to about $500 per month and during the past 5 years I was saving as much as $1,000 per month.
Finally this year, I stopped contributing to my retirement accounts. Instead, I started taking out whatever I get as a dividend distribution from my non-registered account.
I have to tell you. It feels good!
I have accumulated over $500,000. According to the 4% rule, I can withdraw the equivalent of $20,000 per year, which is more or less my cost of living.
At this moment I am only withdrawing from 1% to 2% of my capital per year. I am withdrawing the dividend distributions from my non-registered accounts.
I see some cash siting on my broker’s account and I just transfer it to my checking account and I invite myself for dinner.
At the beginning of the year, I transfer the maximum allowed from my non-registered account to my TFSA. I have a feeling that the maximum allowed for 2024 will be $7,000. I will be ready.
Transferring capital from non-registered account to TFSA will allow to earn more and pay less taxes.
I am in the fortunate position where I don’t even need my retirement money right now. My part time job, which I love, provides me enough to live.
I think that I will use my retirement money to pay for some luxuries that I haven’t paid for myself before, like… instead of taking one vacation per year, I will take two vacations per year, one to my home country, and another to any other random country.
In the future, I may need a cash cushion in case, I become sick or incapacitated.
As for now, I feel happy inviting myself (and my friends) for dinner several times per month.
I am 56 right now and I already can live out of my savings. At age 60 I will start collecting my Quebec Pension Plan. At Age 65 I will be collecting my Old Age Supplement, since my income is low and most of my savings are in my TFSA and non-registered account, they don’t count as income and my declared income will be low.
In short, I will be earning more every year from now until I die. That’s cool.