By Dave Dineen
What a funny feeling! It’s “RRSP season,” and for the first time in 22 years, I won’t be contributing to my plan.
For 22 years, our single-earner household raised funds in RRSPs. We deprived ourselves; we scraped the funds out of the drawer and did everything to make retirement savings a priority. We have even, on occasion, complained that we could not indulge ourselves instantly by buying ourselves things.
However, we have remained faithful to our values and our plan, and we have succeeded each year in contributing to our RRSPs. For some years, I received a bonus from my employer that I deposited directly into the RRSP. In other years, an income tax refund formed the basis of our RRSP contribution for the following year. There were also times when we were disciplined and made periodic contributions – and at other times only contributed small amounts when we had managed to save a few dollars. Nevertheless, almost every year, we have succeeded in disbursing the maximum amount.
No RRSP contribution room
As a retiree, I no longer have what the Canada Revenue Agency calls “earned income,” which they use to calculate RRSP contribution room. So noo earned income, no RRSP contribution room — it’s as simple as that.
Less money to put in a TFSA
Since tax-free savings accounts have been around since 2009, my wife and I have also deposited funds into them. In addition, every year since 2009, we meet with our advisor in early January to make our maximum annual contribution of $5,000 to each of our TFSAs.
But that is not the case this year. In 2012, we focused on our present life, not on saving for our future life. Like most retirees, my current income is not enough to continue saving. (That being said, I may contribute to our TFSAs over the next few years.)
Moving from retirement savings to spending
I took early retirement without being a multi-millionaire. Therefore, it is not surprising that I want to live well today rather than saving even more to live even better at 65, 70, or more.
Today is the first day of the rest of my life when I am young enough, healthy enough, and fit enough to enjoy life to the fullest. I am lucky because my wife is also young, fair, and healthy enough to accompany me. So I don’t wait until tomorrow to start living.
But that doesn’t mean I live day today. I am 55 years old and in good health. So I will need the retirement savings that I have accumulated to last 30 years, 40 years, or maybe even longer!
