Retirement Planning and Forecasting

Retirement Planning and Forecast Spreadsheet (for Canada)

Note that this version of the spreadsheet is now out of date. Go to my post on the new version here.

Updated to version 1.12 on May 7th, 2015 for update to TFSA limit and RRIF minimum withdrawal percentages. Download new version here.  See bottom of post for a list of enhancements and fixes. 

This spreadsheet allows you to make an accurate financial plan for your retirement, starting at any time in your life.  Unlike many retirement tools, this spreadsheet shows a cash flow forecasts vs time and identifies which account money is saved into (during employment) and which account or source the retirement income is withdrawn from.  It handles the different account types (RRSP, LIRA, TFSA and non-tax free account), the limits imposed on them and does income tax calculations for any of the provinces.  

The picture below shows the main page of the spreadsheet which contains all the inputs you need (in yellow) and provides a cash flow forecast and how the savings accounts increase and decline.  

I hope you find the tool useful and I am always willing to hear of suggestions to improve it. 

Financial Basics 11 - Optimum Frequency to Reinvest Cash Dividends and Interest

This post is about the frequency at which you should re-invest the cash dividend (or interest) payment you receive from your ETF funds.

Normally you will received dividends or interest from mutual funds or ETFs either monthly or quarterly. Many stocks return dividends quarterly.

Financial Basics 6 - Saving and Investing Strategy

This post is about our saving and investing strategy. We all share a common goal of retiring comfortably.  What I want to do here is summarize a set of guidelines that will help us maximize the success of our savings. 

In my Financial Basics post #5 I referred to Jim Collins Stock Series set of blog posts and asked you to read the first three of those. You should also read this one that's not part of the stock series - How I failed my daughter and a simple path to wealth. If you haven't read them yet, go and read them and then come back here. 

Financial Basics 5 - Types of Investments

This post contains brief information on the different types of investments available.  In a later post I will discuss which one of these types I recommend (Index tracking ETFs).

Toronto Stock Exchange 

From the "Types of Investment Accounts" post you will recall the 3 level hierarchy (for saving and investing accounts)

• Bank or Investment company
• Type of account (TFSA, RRSP, RESP, Taxable)
• Type of investment

Financial Basics 4 - Self-directed Accounts

This post is about what type of account you should have to contain all your different types of savings accounts. From the title you should expect that I am going to suggest a self-directed account and you are right. For clarity, I will refer to this as your Trading Account, so that I don't confuse it with the savings accounts (TFSA etc.). This trading account will be with one of the big banks or an online brokerage.  

The Bank

(A famous night club, now restaurant, in Calgary.  My wife used to go there in the 80s)

Recommendation

I use BMO Investorline. I have made a list of functionality below that you should look for in a trading account, and mine has all of these. Trades are $9.95 and you can find trading accounts with cheaper trades, but I only need to make about 20 trades per year.  

Financial Basics 3 - How Different Savings Accounts Work

This post is about the different types of savings accounts you can use in Canada.  

Article was edited March 2017, to update TFSA and RRSP limit amounts.

There are 3 levels of hierarchy to savings accounts and investments.  The three levels are:

• Bank or Investment company
• Type of account (TFSA, RRSP, RESP, Taxable)
• Type of investment

Financial Basics 2 - Income Tax

This post is about understanding income taxes enough to know how they impact saving, investment and retirement income.  Income tax is a very complex subject and this post will NOT be a complete summary of all the income tax laws and rules (in Canada).  This post will attempt to summarize just what you need to know for saving and investing, provide links to additional references (if you wish to read more) and also links to tools to help understand the quantitative impact of income taxes. 

If you are not familiar with the origins and purpose of income tax you should read the Wikipedia entry on the subject Wikipedia: Income Tax. Pay attention to the sections "Defining Income" and "Deductions Allowed" as these are important concepts when considering saving and investing as not all types of income are taxed in the same manner, some contributions to savings (ie RRSP) are deductions and some investment income (ie dividends) are allowed tax credits against taxes.