This is based on Stats Can 2019 data. I’m a little surprised to see how much is concentrated at the tophttps://preview.redd.it/2nce7b3h39s61.png?width=347&format=png&auto=webp&s=4b978346cff6c731a90a16ef47ce9ef27854817e via /r/canadahousing https://ift.tt/3s6oeJV

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I see lots of people on here just starting out with their retirement savings. I thought it might be interesting to see a real-life example of one person’s retirement savings journey. I don’t consider myself typical, because I do make quite a bit compared to the Canadian average, but I want to show what can happen with slow and steady investing over a long time period. I’m not retired yet, but my RRSP recently broke through $1 million dollars (yaay!) after 25 years of RRSP investing and I wanted to share this. I’m not a stockbroker and don’t pretend to have some magical insights into the market other than buy low-cost broad-market ETFs. I’ve been through 6 corrections/crashes from the dot-com bubble through COVID. I fully acknowledge that I’m in a very advantageous position due to a well-paying IT job and being able to get into the housing market long before the huge run-up in prices (my first home cost me $135,000) so my experience won’t likely translate to today’s reality.For a bit of context for those who asked, I’m nearly 50 years old (will turn on 420!) with a wife and child. I own a house just outside the GTA in Ontario. Lived in Ontario all my life.When I did my taxes (on paper!) in the spring of 1996, I was left with a staggering tax bill of something like $700. As a young 20-something dude taking home $1800 a month with car payments/rent/food/entertainment eating up most of that, I certainly didn’t have $700 lying around. Somehow, I learned about some too-good-to-be-true saving strategy that would reduce my tax bill to zero. All I had to do was take out a loan to myself for $1095 and deposit that amount into this fancy account called an RRSP. All I had to do was pay off the loan over the next year. Making 12 monthly payments of $87.53 (to myself!!!) at 7% interest was much more palatable than coming up with $700 to give to the tax man. SIGN. ME. UP. I opened up a self-directed RRSP account with my bank at CIBC. This inadvertently started my retirement savings journey that has recently seen it hit the magical $1 million mark after just a hair over 25 years.I’ve learned a lot over the years. After I paid off my initial RRSP loan, I realized that it would be better to make automatic regular contributions instead of taking out a loan every year, at which point some of my hard-earned money would go to the bank in the form of interest. I started with $125 a month put into what I now know are high-cost mutual funds. I thought taking that money out of my limited budget would hurt, but I really didn’t notice it after the first few months. I adjusted my spending patterns without any real difficulty.The bursting of the dot-com bubble in 1999 didn’t hit my portfolio hard, but my RRSP didn’t grow for an entire year, even with regular contributions which had grown to $600/month thanks to a new high-paying IT consulting gig that grossed me $100K+/year for a few really good years. After that gig ended, I took a salaried IT consulting job for $65K/year. That company had an RRSP-matching program, which I took full advantage of. My RRSP value grew slowly, but steadily. For a while, I would jump from one under-performing mutual fund to the latest “hot” high-fee mutual fund only to repeat the same pattern every year or so. My returns were never stellar as a result of the drag incurred by the high MERs, even as I transitioned from boutique mutual funds to index mutual funds.In 2008, I learned about low-cost ETFs and the Couch Potato investing strategy. I opened an account with QTrad and switched all my mutual funds from CIBC Investors Edge to Vanguard/iShares just in time for the 2008 crash. Luckily, I paid off the mortgage on my first home not long after the crash, and I plowed the majority of my old mortgage payment into my RRSP until we moved into a bigger home in 2012 just after our child was born. My RRSP contributions dropped dramatically due to my wife taking an extended maternity leave, but my RRSP grew steadily. After my wife went back to work in 2014, I increased my contributions again and kept increasing along with my salary, which topped out at $135K/year in early 2015.In 2015, I took a new job paying a fair bit more than my old job and started whittling away at my expanding RRSP contribution room. Along with regular contributions, I would throw as much as possible from my emergency fund into my RRSP every spring to maximize my tax return which I would use to replenish my emergency fund. This year, I finally used up all my available RRSP contribution room. Thanks to the increasingly nutty stock market, my RRSP recently broke through the $1M barrier.My current RRSP breakdown looks like this:CDN RRSPXGRO26.4%VCE10.8%Cash2.7%USD RRSPVEA20.4%VWO3.5%VTI35.8%Cash0.3%Thanks to a helpful Redditor that I can no longer find, I looked up my total RRSP contributions from 1996 to today, and it totals $384,530. The rest are capital gains and dividends.It feels like the current stock market run-up is unsustainable, so I’ve got some cash sitting in a money market fund waiting for a correction. This is outside my normal monthly contributions, which goes straight to XGRO via PAC. My investing strategy is buy broad market ETFs and HOLD. I don’t pretend to know what’s coming next, which I guess I contradict by holding some cash for a presumably eventual correction. I just hate missing out on buying opportunities. On the other hand, I’ve been proven wrong more often than right, so maybe I should just put it to work in XGRO.I’m still 10-15 years away from retirement, so I don’t feel I need to start adjusting my strategy yet. Moving forward, I plan on maxing out my RRSP every year and adding as much as I can to my TFSA (which has been pretty much ignored in favour of RRSP), while paying down the mortgage over the next 10 years. With a bit of luck, I should have a very comfortable retirement that allows my wife and I to travel and have lots of fun until we can’t do it anymore.Even though past performance isn’t an indicator of future performance, I hope that this peek into some rando’s retirement strategy over 25 years gives people some hope for a nice chunk of retirement money at some distant point. Believe me, even though 25 years seems like a long time, it really isn’t. Keep plugging away.Graphical view of my RRSP progress over 25 years: https://ift.tt/3mpFUPs via /r/PersonalFinanceCanada https://ift.tt/2Q4ZsMQ

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