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Should frugal savers enjoy their money while they can?

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Mike, 48, and Jill, 40, Edmonton

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How much do you really need to save for retirement? This couple have built a nice nest egg, living below their means and diligently saving. She says it's time to start enjoying the fruits while they're still young, but he thinks they should keep socking money away for their old age. Is it too soon to raid the piggy bank?


Over the years we've managed to amass a net worth of about $3.5-million, mostly in stocks, GICs, bonds and real estate. We maximize our RRSP contributions every year. Though our annual income is over $200,000, we've never had a lavish lifestyle - we've always driven our cars into the ground. I'd like to maintain our savings until I turn 61. Then I'll consider semi-retirement, though I don't believe I'll ever stop working - it's important to stay active mentally. I'm also interested in philanthropy, and I hope to increase our charitable giving. But I'm concerned with planning for our future and making sure we have enough for 25 or more years of retirement. You never know what the markets can do, and I'd like to have that extra cushion. I grew up in a very poor family, and I remember what it's like to worry about not having food on the table. Even now, a $20 bill seems like a lot to me. I've spent most of my life working hard to make sure I'll never be in that position again.


I know Mike and I are lucky to be in this position, but I can't help but think that all this saving has come at a personal cost. We have such busy schedules and so many work demands that we haven't had much time for vacations, even if we wanted to spend the money. Two years ago, we took our first-ever winter holiday together, a trip to Mexico. Mike isn't much of a traveller and prefers short getaways. I'd really like to see more of the world, maybe Greece or Scotland. And I wouldn't mind a few golf trips and some new clothes. I don't want to wait until we're too old to really enjoy these things, and you never know when your number is going to get called. When Mike turns 61, I think any amount of savings over $2-million is excessive; we don't really need that much.

As told to Anna-Kaiser Walker

This interview has been condensed and edited.

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Vital stats

Occupations: He's a financial consultant, she's a technology executive.

Kids: None.

Annual household income: $200,000 in salaries plus $60,000 in investment dividends.

Assets: $205,000 in cash; $575,000 in RRSPs; $400,000 in company pensions; $1,900,000 in stocks (25 per cent pipelines, 25 per cent utilities, 10 per cent Canadian banks, 20 per cent energy, 20 per cent other); $600,000 in real estate (residence worth $500,000 plus $100,000 in farmland); a 2003 Honda Accord and a 2002 Toyota Echo

Debt: $0

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Charitable giving: $8,000 per year


Mike and Jill, you're certainly a Canadian anomaly; saving instead of spending, sitting debt-free and with a sizable net worth. I commend you both for your discipline and diligence in creating a very solid financial foundation.

I agree with Jill that you need to strike a balance moving forward. Mike, you're obviously extremely astute and, given that you are in the financial industry yourself, the first step is to determine when you'll start drawing on your retirement savings - even if you never fully retire. How much will you need each year and when? I suspect as you crunch those projections, and given the fact that you both have been living on a modest income during your working years, you won't need as much as you think to feel comfortable and secure.

You should enjoy your life along the way. I'm concerned about the day that you do start drawing on your savings, how difficult that will be if you can't treat yourself now. Obviously, I'm not suggesting even a lavish lifestyle, but taking a semi-annual vacation with Jill is not unreasonable. Marriage and life are about compromise.

I suggest that over the next quarter, you and Jill take a modest weekend vacation to plan for your future and discuss your goals and retirement dreams, as well as how much you'll need and when enough is enough. You might also consider a couple's account and agree to spend, say, 5-10 per cent annually on enjoying life along the way, allowing Jill to indulge once in a while, too. You've succeeded in saving, now focus on spending just a small amount each year leading up to retirement (while you're healthy and can enjoy it), so it also won't be such a colossal shock when you need to.

Kelley Keehn is the host of W Network's Burn My Mortgage (

Cash Clash is now on Facebook.

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