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A 55-year-old TTC driver’s savings journey: Member Money Matters


Member Money Matters

Welcome to Member Money Matters - where we talk money with our community, our Members, and advisors. Conversations like these are essential to learning about your financial wellness, prioritizing your goals, and planning for the future.

Meridian Member: A 55-year-old TTC driver saving for retirement who would also like to treat his family to a trip through Italy.

Contact: Scott Schram, Investment Specialist

Life story and goals

Age: 55
Occupation: TTC Bus Driver
Location: Toronto, Ontario
Dependents: None
Financial goals: Save for retirement and take the family on a trip through Italy


Monthly after tax income: $4,000
Housing expenses: $0
Utilities: $400
Transportation: $400
Staying connected (phone, internet, etc.): $90
Memberships and subscriptions: $32
Savings and investments contributions: $2,600
Life Insurance: $100
Debt payments: $0

Let’s talk money

What are your financial goals right now?

I’m saving for retirement, but I’d also really like to take my family on a 2 to 3 week trip through Italy before my daughters start their own families and move on with their careers and post-graduate schooling.

What’s your plan for meeting your goals?

We have strong pensions as union workers, so currently I’m just using a savings account.

What’s your best saving strategy?

Adhering to my budget every week. I'm very rigid with my budget - I put all my spending money into my chequing account and the rest stays in my savings account. The only time I go over my budget is when I gather my family together to do something every couple months, but I’ve usually budgeted for that as well.

What was your latest splurge?

A birthday dinner at my favourite restaurant, Scaramouche.

Latest unexpected necessary expense?

Snow tires.

Advice from an expert

Scott Schram, Investment Specialist, offers advice.

Let’s talk about retirement planning

The fact that you and your wife have a pension is amazing! Just remember that it’s never a bad idea to review the terms. Is it a defined benefit pension? Is it a defined contribution plan? If it's a defined benefit plan, how much longer do you have to work to ensure you receive the maximum amount of the pension?

Answering these questions will ensure that you'll have enough money to maintain your lifestyle when you're no longer in your working years. Pensions are wonderful, but you should build up separate savings because while pensions are usually stable, they’re not 100% guaranteed.

Next, determine how much you need to put aside to meet your financial goals and decide on the best financial vehicle to get you there. Mutual funds are a great option for investments with a timeline greater than five years. I would also suggest either an RRSP or TFSA, depending on how you feel about your tax situation. An RRSP will help reduce your annual tax burden while building money for retirement. A TFSA allows your money to grow tax-free while it's actively invested and when you withdraw it, plus there's no tax liability since you contribute after-tax dollars.

In either case, make sure you stay within your contribution limits. The contributions you make and the time until your planned retirement will likely determine how much you need to contribute and your risk tolerance for the money. I also recommend setting up weekly or bi-weekly pre-authorized contributions. This allows you to take advantage of dollar cost averaging (buying mutual funds when they are at a low price, as opposed to trying to time the markets).

Let’s talk about everyday spending and saving

It sounds like you have good control over your budget and your spending! Also, I think it’s awesome that you can do something special for your family every couple months and that you typically budget for those special occasions.

Unexpected expenses are not as fun to save for. Car repairs, a new furnace, vet bills - we never know what’s around the corner when it comes to sudden expenses. That’s why an emergency fund is so important. Typically, 3 to 6 months of net income is sufficient. If you already have that set aside in your savings account, great! If not, I suggest setting up automatic transfers to slowly build up savings. Automatic transfers are great because you can pay yourself first without thinking about it.

Let’s talk about saving for Italy

The food, the culture, the architecture, the history - Italy is a must-see for so many people! It is on the expensive side though, so a clear savings plan will be helpful.

Start out by planning out your dream vacation in order to budget it all out - the destinations, sights, restaurants, hotels, etc. Don’t forget your spending money for souvenirs and spontaneous outings! Also, keep in mind that the prices will often be in Euros, increasing the overall price of your trip in Canadian Dollars.

Once you have an estimated budget, add a little extra for unexpected expenses. Once you have that number it’s time to figure out how much you need to save on a monthly basis. I suggest opening a separate High Interest Savings Account to keep this money separate from your day-to-day spending and emergency fund. This allows you to contribute regularly and earn interest while you save. If you can’t save the required amount of money on a monthly basis, reduce the amount you contribute, and save a little bit longer.

I hope that helps! At Meridian, we’re always happy to dive into more conversations and options to make sure our Members get what they want.

All about Scott Schram

Scott is a Investment Specialist at Meridian. His favourite thing about working as an Investment Specialist is making a positive impact on people’s lives. Scott’s first priority is to understand the wants and needs of his Members so he can put together a strong, individualized financial plan for them. When he isn’t working, Scott enjoys coaching youth ball hockey and travelling anywhere he hasn’t been before.

The advice expressed in the article are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific product. It is only intended to provide education about the financial industry. The views reflected in the article are subject to change at any time without notice. Nothing in the article constitutes professional and/or financial advice, nor does any information on the article constitute a comprehensive or complete statement of the matters discussed thereto. To encourage safety, we recommend you to always consult with an advisor before making any decisions related to information on this website.

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