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# What’s the Magic Number?

With finances there are countless numbers that you are bombarded with (note I didn’t say infinite, only countless (where countless means, countable but a HUGE amount of them)).

Magic Numbers are those that have special meaning to you, and some of those magic numbers in personal finance can be:

• Number of payments until a debt is retiredÂ
• How much do you owe until you are solvent (i.e. your total debt load is zero (not net value)) ?
• What is the MER for that “can’t miss” Mutual Fund that my buddy thinks I should buy?
• How much money you have in your pocket right now?
• etc., etc., etc.,

Right now, I am on a course learning about how my retirement might work, in terms of my pension and such, and I now have a new magic number: Â 60 or 65.

Unfortunately these are the age I must be to either retire with no penalties on my pension or retire with my full pension (again with no penalties), however, my guess is I may end up working past those dates, but this course suggests crunching through all the numbers to figure out whether you should keep working?

If you have RRSPs as your retirement vehicle, how do you figure out your Magic Number? Do you know your Magic Number? If not, why not? If you don’t know when you can stop working (or have a goal), when are you going to stop?

It is worthwhile figuring out your Magic Number(s), here are few to think about:

• How old will you be when you have paid off your Mortgage?
• How old will you be when  you are out of debt?
• What is your effective rate of pay down on that debt?
• How old will you be when you retire? (or how old do you want to be)?

Just a few of the Magic Numbers you should be calculating (or figuring out how to calculate).

## Feel Free to Comment

1. 28 – Current age
172.1 – Current networth (including value of condo – mortgage)
5.8 – Estimated years until I can move out of my condo, rent it, and buy another
35 – My personal goal to quit my job and work for myself

2. We don’t have any debt but it’s still going to be a while before we consider retirement seriously. With no defined benefit PP it’s risky to assume how well our retirement savings will stand the vagaries of time.

So for now our magic number is simpler: \$36,000/child. We’d like to try to max out their RESPs. We won’t necessarily be able to give our kids all of the contribution money we put into their RESPs, but we don’t have to. The earned income and government grant cheques are issued to them, but the contributions come back to us. We want to get the max govt grants if we can. That will take a lot more RESP contributions and there’s a yearly limit of 10,000/child to get matching grants. So that’s the magic number for us right now.

1. Good idea, if you have \$36,000 per child, you have almost enough to cover them now for their tuition costs (only), and you better hope the Universities slow down their fee rate increases (well larger than inflation).

3. Hi, thank you for this post.
I’m doing my calculations, but I’m walking extra steps to change things. That is taking action into new things that would free me sooner!
Then I will revew everything.

4. 42 – current age
35 – age when mortgage was retired
45 – age when I’d like to retire BUT that all depends on whether my savings and investment hit MY magic absolute Financial Independence number of \$750K. With young kids at home – I suspect I’ll fall short and will stay in the workforce a little longer 🙂

1. Retiring with anyone except your wife at home ? Not my cup of tea, but good luck !

5. 38 – age when mortgage paid off (wheee!)
43 – current age
57 – age when hubby thinks he can afford to retire, assuming job situation remains stable

1. Good news for you too!!

6. 49 – age now
51 – when debt (HELOC) is paid off
61 – age I would love to retire
70 -age I can afford to retire

1. See, some folks really have those numbers!! Good on you!

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