Freedom 55: A Guide to Achieving Your Dream Retirement

The idea of retiring comfortably by age 55 is a tantalizing prospect, but it requires careful planning and discipline. According to the article, the concept of "Freedom 55" was first introduced in the 1970s by a Canadian insurance company, and it's based on the idea that you can retire early if you start saving aggressively from a young age.

To achieve this goal, it's essential to start saving early and consistently. The article highlights that saving just 10% of your income from age 25 can result in a significant nest egg by age 55. By taking advantage of compound interest, you can grow your savings over time.

Aiming to save at least 20% of your income is a more realistic target, especially if you're starting from scratch. This will give you a better chance of achieving your retirement goals and enjoying the freedom to pursue your passions.

Freedom 55 is a milestone birthday that's often associated with a sense of liberation and freedom. According to a survey by Sun Life Financial, the average Canadian now expects to retire at 68, a full year more than expectations from the previous year's survey.

The concept of Freedom 55 was popularized by a London Life insurance company, which used it as a marketing slogan to promote the idea of retiring at 55. However, for many Canadians, Freedom 55 has become a cruel joke due to rising life expectancy and increasing costs of retirement.

Living 20 years longer in retirement means that costs can more than double, making it even more challenging for Canadians to achieve their Freedom 55 goals.

The "Freedom 55" campaign, launched by the Canadian insurance company CLU, was a game-changer in the world of marketing.

It was a campaign that resonated with Canadians, who were eager to retire early and enjoy their golden years.

The campaign was simple yet effective, with the iconic slogan "Freedom 55" becoming a household name.

The idea was to encourage Canadians to plan for their retirement and make the most of their savings, with the goal of achieving financial freedom by the age of 55.

The campaign was a huge success, with many Canadians taking action to plan for their retirement and achieve their financial goals.

The "Freedom 55" campaign remains one of the most memorable marketing campaigns in Canadian history.

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Freedom 55 is a concept that has been around for a while, but it's becoming increasingly elusive for many Canadians. The idea of retiring at 55 and enjoying a life of freedom and leisure is no longer a reality for most people.

According to a recent survey by Sun Life Financial, the average Canadian now expects to retire at 68, a full year more than expectations from the previous year's survey. This is partly due to the fact that life expectancy has increased significantly, with Canadians now living an average of 20 years after retirement, compared to 15 years in 1995.

The cost of retirement has more than doubled in the past few decades, making it even more challenging for people to achieve financial independence. This is especially true for baby-boomers who are facing the gut-wrenching decision to either postpone retirement or carry debt into retirement.

Household debt has risen to 164% of annual household income, making it difficult for people to save for retirement. In fact, the savings rate for the average Canadian has fallen to 3.5% of disposable income from 13% in 1990.

Here's an interesting read: Freedom Debt Relief Consolidation Loan

However, it's not all doom and gloom. Some people have managed to achieve financial freedom, like Michael and his partner who decided to reinvent themselves and pursue their passions. They're now enjoying their freedom at 55, doing what they love and exploring new ventures.

Change can be scary, but it's often necessary for growth. Michael and his partner's story is a great example of how embracing change can lead to a more fulfilling life.

Graeme Egan, a financial planner, suggests that the couple's diligence in paying off debt and saving money has positioned them well for an early retirement.

Their Registered Education Savings Plans (RESPs) should be sufficient to fund four-year undergraduate studies for both children, with a total value of $92,500 per child.

A year at university is anticipated to cost between $20,000 and $25,000, including tuition, books, residence, and food.

Egan recommends avoiding equity risk with investments when post-secondary education is about six months to one year away, and instead opting for guaranteed-type investments like money market or T-bills.

By doing so, the couple can ensure the money will be available given the short time horizon.

According to Egan's projections, if Paul retires at 55, his pension, Evelyn's dividend income, and their combined investment income will give them approximately $132,000 per year, or $11,000 per month.

This exceeds their current expenses and travel budget, and doesn't include CPP or OAS entitlements or the $70,000 in ETFs in the corporate investment account.

Egan suggests the couple should look at the asset mix of their consolidated portfolio to ensure it reflects their potential retirement date and that they are not taking more risk than they need to in order to meet projected cash flow needs.

Here are some key takeaways from Egan's recommendations:

Egan also recommends that Paul and Evelyn consult a fee-only financial planner to generate retirement projections that incorporate their current financial information and objectives under various scenarios.

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