Are they on track to retire at 50?

By Julie Cazzin on June 21, 2014
Estimated reading time: 3 minutes

Adam Danyleko, 28, and Justine Oshust, 25, have a big mortgage but want to retire early with $100,000 in net income annually

The current situation

Adam Danyleko, 28, and Justine Oshust, 25, recently purchased a new home in Calgary for $822,000. The couple, who make $200,000, are looking forward to building a life together, but would like to retire when Adam turns 50, with about $100,000 in net income annually. Another ripple of that plan would involve Adam, who is employed as a regional sales leader, semi-retiring at 45. “I work on commissions and it’s a very stressful job,” he says. Besides their house, which carries a $650,000 mortgage, the couple’s assets are mainly held by Adam, the household’s main breadwinner: $50,000 in RRSPs, $11,000 in TFSAs, $10,000 in a defined contribution pension and $30,000 in an employee stock matching plan. Justine, a dental assistant, has $30,000 in a TFSA. So far, Adam is pleased with his work’s stock plan. “I started buying the company stock at $14 a share and it’s now worth $54.” But the same can’t be said for his RRSP. “I haven’t been happy with my returns and given my age, am leaning towards an 80% equity and 20% fixed income split.” Adam hopes that by maxing out both of their RRSPs and TFSAs, plus his stock plan, he and Justine will meet their goal.

The verdict

Thanks to their large income, Adam and Justine will be able to retire at age 50, says Money Coaches Canada’s Tom Feigs. The power of compounding over the next two decades will work in their favour while they’re building up their portfolio. Feigs estimates the couple should accumulate $2.1 million in investible assets if they max out their registered accounts and an additional $400,000 through Adam’s employee plans. That translates to $77,000 average annual net income in today’s dollars, more than enough for an upper middle-class lifestyle. This income is sustainable to age 95, and includes CPP and OAS. Adam, however, will encounter some investment volatility given his high risk tolerance and should make it a point to avoid unwise reactions to market movements. He should also watch out for fees, paying no more than 1.25%. Tempering his enthusiasm about the growth potential of his company’s stock, and cashing in and diversifying at least 50% of his gains into other industry sectors, will also improve his portfolio’s exposure. retire-at-50

Do you want MoneySense to see if you’re on track to meet your own financial goal? If so, drop us a line at [email protected]

Comments Cancel reply

Columns

Why I’m optimistic about the markets in 2025–tariffs or no

This advisor isn’t losing any sleep over the markets. In fact, looking back at 2024 and forward into 2025,...

Why I’m optimistic about the markets in 2025–tariffs or no

A car steering wheel and a bowl of pasta, as symbols of how to get the best auto loan interest rate.

loans

Car loan interest rates: What’s the best Canadians can get?

Car loan interest rates can be as confusing as a complicated recipe, and just as daunting to navigate. This...

Car loan interest rates: What’s the best Canadians can get?

Newcomer to Canada buying their first car at the dealership asking questions of the sales person about getting a car loan.

Newcomers to Canada

Auto loans for newcomers—questions to ask when buying your first car in Canada

Buying your first car in Canada is like any other major purchase. Ask a lot of questions, not just...

Auto loans for newcomers—questions to ask when buying your first car in Canada

A woman using the MoneySense Finder tool at her work-from-home desk

ETFs

Buying ETFs in Canada Tool: The MoneySense ETF Screener

Which ETFs should you invest in? Which ones best suit your risk tolerance? What about personal ethics? Check out...

Buying ETFs in Canada Tool: The MoneySense ETF Screener

Budgeting

What is the Canada Carbon Rebate? Plus, dates and amounts for 2025 rebates

The Canadian government is sending out the last carbon rebate of 2024. See who’s eligible and how much you...

What is the Canada Carbon Rebate? Plus, dates and amounts for 2025 rebates

Canadian woman buying a car, as she learns to manage her money.

loans

Personal Finance For Canadians For Dummies excerpt: How to manage money and stop overspending

Learn how to manage your money, understand your earnings, invest wisely and more, from this excerpt of Personal Finance...

Personal Finance For Canadians For Dummies excerpt: How to manage money and stop overspending

Save

How much money should I have saved by age 40?

Sponsored By

CIBC

How much money should I have saved by age 40?

Save

How much money should I have saved by age 25?

Sponsored By

CIBC

How much money should I have saved by age 25?

Real Estate

How changes to the Home Buyers’ Plan could affect your down payment

Sponsored By

EQ Bank

How changes to the Home Buyers’ Plan could affect your down payment

FHSA

Unsure about buying a home? Why you should open an FHSA now anyway

Sponsored By

EQ Bank

Unsure about buying a home? Why you should open an FHSA now anyway

Are they on track to retire at 50?

The current situation

The verdict

Comments Cancel reply

Related Articles

Why I’m optimistic about the markets in 2025–tariffs or no

Car loan interest rates: What’s the best Canadians can get?

Auto loans for newcomers—questions to ask when buying your first car in Canada​

Buying ETFs in Canada Tool: The MoneySense ETF Screener

What is the Canada Carbon Rebate? Plus, dates and amounts for 2025 rebates

Personal Finance For Canadians For Dummies excerpt: How to manage money and stop overspending

How much money should I have saved by age 40?

How much money should I have saved by age 25?

How changes to the Home Buyers’ Plan could affect your down payment

Unsure about buying a home? Why you should open an FHSA now anyway

Auto loans for newcomers—questions to ask when buying your first car in Canada