this post was submitted on 31 Jul 2023
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I come from a family of renters: both my mother and father (separated) rented all their working life, and bought a home when their retirement came, because they decided to move to a place where real estate was cheaper. It didn't prevent them to have a great life.
Are you an employee? If you are, you're already contributing to your retirement through CPP, so at least part of your needs are already taken care of. Is that sufficient? Probably not, but it'll still be there later when you need it.
I went through kind of the same situation a few years ago: my wife had a baby and wasn't eligible for EI after the birth, and then she decided to change career, so was back to studying for a while. It was hard, and quite tight, and we had to cut quite a bit on spending for a few years and didn't save much, but it was well worth it: she's now in a better situation she could have been before, and we organised our lives to live frugally enough to catch-up on our savings, so we now are in a good enough situation.
Do you have to live tighter now to save more? Maybe: you can run the math and decide if there are some things you can cut, reduce or replace without affecting your life too much.
But in the end, that's ok not to save if you're too tight. Just do your best to save what you can and to catch-up when you can!
Appreciate the insight. I am an employee so you’re right, at least we’ve got that going for us (presuming the CPP is still a thing in 30 years).
It’s good to hear someone say it’s on not to save if there’s nothing to save. Seems like common sense but a lot of media makes it seem like we’re failures if we can’t save well. As if we can’t save because we’re spending badly when really we have old cars and high rent. I guess we could stop everything we do for fun (which isn’t excessive) but then what kind of a life is that?
I wouldn't worry that much about that : The most recent triennial report by the Chief Actuary of Canada indicates that the CPP is sustainable over a 75-year projection period.
Based on our current knowledge, CPP running out of money is a myth.
Like everything, you don't have to stop completely: for example, for multiple reasons, we recently decided with my family to reduce our meat consumption, going with 2 vegetarian and 2 vegan days per week ; to go local for our vacations which is usually cheaper ; to change our habits to spend more time outside of our house, for example in local parks or at the library ; to priorise picnics to restaurants when going on outings for the summer... it has had some good impact on our finance while not negatively impacting our quality of life.
Good news about the pension!
We’ve made a bunch of those kinds of changes too. It feels good but I’d rather not cut the cheap and cheerful stuff too. I don’t actually think it’ll come to that though.
Great, everything is going to be fine then!
Good luck!