[supafamous]

Originally Posted by JDMDreams

$50000 pension a year is only 5% on a $1m portfolio.

To get there, $90000 start, $1000 mth contribution, 25y at 6% = $1,062,557.33 total contributions $300,000.

So is it worth it to work another 25y? Or find other hustles to grind higher income to invest. I'm not sure how I feel about pensions. I feel like it's a bad thing, do you really want to work till 65? How's your health? How many good years would you have left? As I see pension + cpp + oas as a bad thing as you're forced to have really high income even during retirement = taxes and claw backs. Vs if you can invest you can control your payouts for your income?

Defined benefit pensions like this are indexed to inflation, they also last a lifetime, and when you die your spouse gets survivor benefits so a $50k pension is worth far more than $1m portfolio (assuming you live long enough). You can also income split these pensions to minimise your taxes so that $50k can be $25k per spouse. A $50k pension, IMO, should be treated more like a $1.5-2m portfolio as a result.