Who here has achieved early retirement, or working towards it?

[desert monk]

What age did you retire ? Are you single? How much was your nest egg? What is your financial plan? Are you happy with your choice?

I was out having supper yesterday, and was talking to a retired guy I know who recently had a stroke. He is ~65, worked until 63 when he retired. He literally looks like the walking dead. If working until 63 means I turn out like this guy, there is no way it's worth it. This made me reconsider my whole life plan going forward.

What is the point of working non-stop to make a high salary when you are just going to die as soon as you retire? Is work the only thing that gives a man's life meaning? Would you rather retire early and live more simply, or keep working and drive a new BMW all the time have expensive vacations ?

 

[Goodoer]

I think I’m the type that needs to work. Working less would be better balance.

 

[desert monk]

I think I’m the type that needs to work. Working less would be better balance.

I think I'm the same. My problem is obtaining a suitable job where I can make a decent salary, and am not overly stressed physically or mentally. My current job only meets 2 of those criteria.

 

[angrymime666]

im 3 years till I retire which should be 51.

Ill probably still work doing something which I find interest in. I like the idea of being able to do as I want when I want and not having to work. I still need to keep busy though and a job seems a good way to stay active and bring in some extra play money. living 6 months in a warm climate and come home for 6 months.

Im single and have a nest egg of 1mil living off dividends

I live pretty minimal but do enjoy the finer things in life..

 

[realthing69]

The biggest unknown is you don't know how long you'll live. Or sometime in your 80's you are struck with a disease like Parkinsons or Alzheimer's and that cost a lot of money unless your kids are going to look after you. You can run out of money pretty quickly (million dollars isn't enough if you're struck with Alzheimers and require private care).

Anyways back on topic, having around million dollars for retirement is a good ballpark figure (if you are single) which hopefully last 30 years of retirement. Myself, hope to retire at 60...10 more years to go!

 

[jeff2]

The biggest unknown is you don't know how long you'll live. Or sometime in your 80's you are struck with a disease like Parkinsons or Alzheimer's and that cost a lot of money unless your kids are going to look after you. You can run out of money pretty quickly (million dollars isn't enough if you're struck with Alzheimers and require private care).

Anyways back on topic, having around million dollars for retirement is a good ballpark figure (if you are single) which hopefully last 30 years of retirement. Myself, hope to retire at 60...10 more years to go!

It would be nice if we all worked for the government and got indexed defined benefit pensions and retirement health care paid for.

 

[realthing69]

I am sure there are guys on this forum who are in their 60s to 70s still hobbying....one MPA told me she has an mid-70 year old client. That could be me someday!

 

[realthing69]

It would be nice if we all worked for the government and got indexed defined benefit pensions and retirement health care paid for.

I believe government (federal) pensions are gone now for new hires (at least for the regular government employees). Someone can correct me if I am wrong.

 

[fall]

Im single and have a nest egg of 1mil living off dividends

So, you are basically living in poverty. 1mil can support 15 years of normal life (including all the income it will generate during these 15 years).

 

[simcity]

I retired at 43. Someone made an offer to buy my company. After the sale I chilled for a couple of years. Now I dabble in only projects that interest me. My nest nest egg provides me with 2400 a day in income. At first you just spend spend spend but now it’s more like just enjoy life and do things that make money but are enjoyable and bring other people along for the ride. Worst part of selling my company was having nothing to do since all my friends worked still so it got boring

 

[jeff2]

So, you are basically living in poverty. 1mil can support 15 years of normal life (including all the income it will generate during these 15 years).

I believe if they are all Canadian companies, there would be no income tax with the dividend tax credit and no other income to declare.

 

[realthing69]

I retired at 43. Someone made an offer to buy my company. After the sale I chilled for a couple of years. Now I dabble in only projects that interest me. My nest nest egg provides me with 2400 a day in income. At first you just spend spend spend but now it’s more like just enjoy life and do things that make money but are enjoyable and bring other people along for the ride. Worst part of selling my company was having nothing to do since all my friends worked still so it got boring

Probably why some people continue working into their 70s even 80s

 

[WetSeeker]

It would be nice if we all worked for the government and got indexed defined benefit pensions and retirement health care paid for.

That's quite true - Stats Canada has tables that show the total # of Public Sector workers with defined benefit (fixed amount, indexed, paid for life) is 250% of the TOTAL private sector defined benefit participants. There are actually less than 20% of Canadians that belong to any pension plan. 30 million Canadians have no employer pension plan. Most of those defined benefit plan participants are government. It truly is an unequal playing field. No wonder government keeps thinking "we are all in this together" they have no clue what living in the private sector means.
At one time, back in the 1970s, government workers earned less than private sector workers. So the pensions and benefits were intended to level the playing field. That ended 30 years ago. Since then, public sector salaries are 25% - 40% higher than the private sector, plus they can retire sooner and enjoy pensions and health benefits that no one in the private sector can enjoy. Tax dollars are not for services, they are literally allowing a two tier system.

 

[WetSeeker]

I believe government (federal) pensions are gone now for new hires (at least for the regular government employees). Someone can correct me if I am wrong.

That is somewhat true - it is too little too late - all existing workers are grandfathered, most government hired today still are contracted with full pensions, and most public sector workers will enjoy full retirement at 55 (using an 85 factor of age and years worked). If you ever looked up a collective agreement you would need to start drinking.
The average private sector worker must work 7-10 years longer and will have zero pension and a lower standard of retirement living. If I had to go back in time I would have gone public sector. Hindsight is 20/20

 

[desert monk]

That is somewhat true - it is too little too late - all existing workers are grandfathered, most government hired today still are contracted with full pensions, and most public sector workers will enjoy full retirement at 55 (using an 85 factor of age and years worked). If you ever looked up a collective agreement you would need to start drinking.
The average private sector worker must work 7-10 years longer and will have zero pension and a lower standard of retirement living. If I had to go back in time I would have gone public sector. Hindsight is 20/20

If you want to work in the public sector you need to be a woman and/or non-white. Unless you're a francophone, they don't want you. I have known several non-white people who were new to Canada, and they all got hired by provincial and federal governments as soon as they had the applicable paperwork, some with multiple offers.

I retired at 43. Someone made an offer to buy my company. After the sale I chilled for a couple of years. Now I dabble in only projects that interest me. My nest nest egg provides me with 2400 a day in income. At first you just spend spend spend but now it’s more like just enjoy life and do things that make money but are enjoyable and bring other people along for the ride. Worst part of selling my company was having nothing to do since all my friends worked still so it got boring

This is roughly how much money a man needs to escape the effects of the central banking usury scam.

 

[desert monk]

So, you are basically living in poverty. 1mil can support 15 years of normal life (including all the income it will generate during these 15 years).

I would apply the 4% rule, where if you can live off 4% of your nest egg it will last in perpetuity. So by that metric if he could live off ~$40K a year until he can collect CPP he should be fine. Depends on what exactly you want to do in retirement, if you can supplement it, etc. We are all going to die, and most men I have seen die far earlier than 80 unless they have exceptional genes. I nearly died about 4 times driving home after work on Thursday.

 

[fall]

I believe if they are all Canadian companies, there would be no income tax with the dividend tax credit and no other income to declare.

There will be capital gain tax (half of the regular tax rate) and tax on dividend income (the fact that these are Canadian companies will reduce the tax by about half). So, with about 7% annual after-tax return (assuming no more than half of the market risk), $100K annual withdrawals adjusted for 2% annual inflation, and assuming there is no deferred capital gain (so that it is not some past investment of $500K that grew to $1M now so that there is about (1M-$500K)*0.4/2=$100K deferred taxes top be paid), based on my Excel calculations, $1M will last for exactly 14.5 years.

 

[fall]

I would apply the 4% rule, where if you can live off 4% of your nest egg it will last in perpetuity. So by that metric if he could live off ~$40K a year until he can collect CPP he should be fine. Depends on what exactly you want to do in retirement, if you can supplement it, etc. We are all going to die, and most men I have seen die far earlier than 80 unless they have exceptional genes. I nearly died about 4 times driving home after work on Thursday.

Yes, 4% is about right. But we need to adjust for inflation (assume 2%), so, the investment must provide about 6% return to be able to make 4% inflation-adjusted withdrawals without tapping in the principal amount. And noone in his right mind would be willing to retire early in order to live on $40K/year. $100K after tax - it is my threshold for early retirement, but it will still not be enough to fly business class to Thailand.

 

[jeff2]

There will be capital gain tax (half of the regular tax rate) and tax on dividend income (the fact that these are Canadian companies will reduce the tax by about half). So, with about 7% annual after-tax return (assuming no more than half of the market risk), $100K annual withdrawals adjusted for 2% annual inflation, and assuming there is no deferred capital gain (so that it is not some past investment of $500K that grew to $1M now so that there is about (1M-$500K)*0.4/2=$100K deferred taxes top be paid), based on my Excel calculations, $1M will last for exactly 14.5 years.

Yes, capital gains tax will have to be paid at some point and inflation can be a serious issue.

You can earn $50K in tax-free dividends, but there's a ...

 

[Wanderer09]

Yes, 4% is about right. But we need to adjust for inflation (assume 2%), so, the investment must provide about 6% return to be able to make 4% inflation-adjusted withdrawals without tapping in the principal amount. And noone in his right mind would be willing to retire early in order to live on $40K/year. $100K after tax - it is my threshold for early retirement, but it will still not be enough to fly business class to Thailand.

Not many make 100K even pre tax. Not many jobs pay that much. Do you have your own business ?