What's Your Number? (For Retirement)

[CaptainYooh]

Originally Posted by MoneyGuy

I’m there. Sold my business and am consulting.
I’m living the dream, working because and as much as I want to.

From what you ahve shared here before, you have grandchildren and a few expensive toys. Would you mind sharing your annual (or monthly) spending budget doing what you're doing these days?

[The Yen Man]

I'm gonna work as the surly Walmart greeter to supplement my income.

[Torture]

Originally Posted by gasman

Yes but if you are sitting at a combined working income of $250K+/year for a couple, the $125k/year in retirement is not an unreasonable expectation unless you want to really reduce your lifestyle in retirement. Mortgage in my case only accounts for 15% of our take home pay, having a house paid off doesn't significantly change my cash flow. The bigger impact may be not having to save as much (TFSA, RSP, RESP etc)

I plan to be more active, spend on more "leisure things" (Boats, vacations, experiences) in my retirement than I do now.

Keep in mind you don't need to save for retirement in retirement as well. So you can cut another 10-20% off your retirement spending compared to "normal"

[MoneyGuy]

Originally Posted by CaptainYooh

From what you ahve shared here before, you have grandchildren and a few expensive toys. Would you mind sharing your annual (or monthly) spending budget doing what you're doing these days?

You may have confused me with someone else regarding the toys. We have one grandchild whose parents know we’re funding his education, as well as others we hope will come along. We have no expensive toys but travel extensively, but not in the last year, of course. We’ve booked a big, expensive trip October, November, December 2022 (cancelable without penalty if necessary). Monthly household income is approximately $13,000-$14,000 per month. Our children don’t need help but we’re helping anyway.

[Reaper]

I'm not sure what the number is. I'm on Freedom 95.

[gasman]

Originally Posted by Torture

Keep in mind you don't need to save for retirement in retirement as well. So you can cut another 10-20% off your retirement spending compared to "normal"

That's what I said...

[Cappy]

I have a number in mind based off some actuarial numbers i have found online (i know...) and have a good chance of getting there - if i want to do the classic NA retirement life

I save pretty well, but I have a tendency to say "#### this game" and peace out of the work world for a few months here and there (have done that about 3 times since i graduated for roughly 4-6 months a time to travel and "figure it out") This stems from my profession and that fact that i do not particularly care for it.

So if i didnt do that, i would be a bit more ahead, but i should be fine. I am likely to receive a sizeable wealth transfer (hopefully not until I am quite old as well as i would rather have my parents alive and well)

I would love to "retire" early. Buy a business or something like that in a great location before i am fifty and not have to worry about the the income from that to fund my relatively modest life.

[RichieRich]

Originally Posted by troutman

We will see a big wealth transfer now from seniors to their adult children in the coming years.

A family friend husband's parents passed within the last couple of years. They had a large scale farm in central Alberta and it passed to several kids. Some wanted to keep the farm, but not all. In the end it was sold and proceeds distributed. This dude took his cash and dropped about $125k on a "nice truck", a bunch of home toys, upgraded their home (ie moved), and now doesn't have much to show for it in terms of moving their retirement date. They did not consider the "opportunity cost" of blowing the money on material/consumerism versus a potential not-so-distant-future reduction of work and life stress. Their decisions for sure, and not one I would have made.

[RichieRich]

Originally Posted by troutman

Problem I often see - you can save and plan and do all the right things, but if you are not healthy in your golden years, you may not be able to enjoy that wealth. Have some of your big adventures now, within reason.

The "within reason" part is very subjective. Too many are closer to spending ~80%+ of their disposable, than saving ~60-80% of it and still doing a few things "good enough".

[GGG]

About 60k per year plus CPP/OAS so 1.2 million with paid off house retire at 50 or so.

An interesting question is that you could double your net worth in exchange for 7-10 years of time. At what point does that become too large of a trade in terms of life left vs work.

[RichieRich]

Originally Posted by GGG

About 60k per year plus CPP/OAS so 1.2 million with paid off house retire at 50 or so.

An interesting question is that you could double your net worth in exchange for 7-10 years of time. At what point does that become too large of a trade in terms of life left vs work.

I'd say your number is definitely "reasonable" for most, and probably a bit higher than what most will actually hit. I sure envy those with a government pension that can check out at age 55 with a decent monthly stipend. The question though also needs to be... do you take the monthly, or lump sum?



W.r.t. doubling money time... I use ~8yrs for doubling existing. I also assume I'll be saving more during that time period... or just blowing it on new toys.
I think we need a questionnaire about 1) what age do you WANT to retire; 2) what age do you EXPECT to retire?

[Johnny199r]

My current projections are:

Annual employment pension: $65,000
liquid assets (TFSA, RRSP, non registered) = $3,880,886

Plus CPP/OAS.

Retirement age = 57.

This does not include my spouse's income.

I plan on living half the year somewhere warm every year, trying a new place every winter, and then living somewhere different in Canada for the remaining 6 months every year (ie B.C, Montreal etc)

Hope I'll still be alive then.

[CaptainYooh]

Originally Posted by GGG

About 60k per year plus CPP/OAS so 1.2 million with paid off house retire at 50 or so.

An interesting question is that you could double your net worth in exchange for 7-10 years of time. At what point does that become too large of a trade in terms of life left vs work.

I have spoken to many colleagues and friends who retired early (before 65). Without exception, not a single one of them was happy about making that decision. Boredom being cited as the most common reason. Underestimating the costs was the close second. As one of them said, "after the initial "yeah, I can do anything I want now" excitement, there comes "why bother getting out of bed?". In order to retire early and happy, one needs to be healthy (first) and busy (second) with things they want to do which fully occupy their days, weeks and years. Financial capacity to do the above is a variable calculation based on the cost of doing those things until you hit the age of physical incapacity to do/enjoy them. Most people tend to grossly over-estimate their capacity and ability to enjoy things later in life based on what they enjoy when being younger. Traveling to Nepal could be fun at 22, but physically exhausting, dangerous and financially ruinous undertaking at 70. I enjoy photography, golf, collecting, music, fine dining. I might think now that I can enjoy all of that when I am older. But that's just a wild guess. Wanna make G-d laugh, make some life plans.

[Torture]

Originally Posted by gasman

That's what I said...

Up early for an EST conference call...didn't have enough coffee apparently.

I have spoken to many colleagues and friends who retired early (before 65). Without exception, not a single one of them was happy about making that decision. Boredom being cited as the most common reason. Underestimating the costs was the close second. As one of them said, "after the initial "yeah, I can do anything I want now" excitement, there comes "why bother getting out of bed?". In order to retire early and happy, one needs to be healthy (first) and busy (second) with things they want to do which fully occupy their days, weeks and years. Financial capacity to do the above is a variable calculation based on the cost of doing those things until you hit the age of physical incapacity to do/enjoy them. Most people tend to grossly over-estimate their capacity and ability to enjoy things later in life based on what they enjoy when being younger. Traveling to Nepal could be fun at 22, but physically exhausting, dangerous and financially ruinous undertaking at 70. I enjoy photography, golf, collecting, music, fine dining. I might think now that I can enjoy all of that when I am older. But that's just a wild guess. Wanna make G-d laugh, make some life plans.

Personally, I don't understand how somebody would get bored in retirement. Go do stuff. Have hobbies. Just because you're retired doesn't mean you have to sit around at home all day every day. *shrug*

[GomerPile]

My spouse and I have the full freedom number of $2 million net worth in mind. However, we are both self starters and will never be the sit in PHX and have 3pm happy hour everyday folks. We hope to always make enough consulting, working part time, helping friends and family out to pay for our lifestyle. That $2 million for us is that number we need to feel comfortable if one of us gets sick, and the other can take care of that person without the financial stress.

It's not really a retirement, but a lifestyle shift. Both of us have had family members get ill, and seen the sacrifices siblings, cousins, grandparents have had to make.

[RoadGame]

Like the OP, 2.5M / 50-55 y.o. The wife and I both have a large number of projects we want to pursue but don't have the time for, and our jobs are more like on/off switches than a dimmer as far as managing the intensity level now. I'm a bit surprised to hear boredom is such an issue, but then I'm happy to keep my own company most of the time anyway, maybe it's harder for extraverts.

[Flamenspiel]

Early retirement is much more then having your finances in order, you need to have something to do. Otherwise you could be dealing with early dementia. A hobby does not replace a job, what’s your new purpose?

A lot of careers peak in 50s and 60s. You can generally be in complete control and enjoy long vacations. What’s wrong with that? Look at a guy like Bryan Burke, what’s wrong with that? The key is being able to walk from the job if you want to, but not necessarily walk.

Also, with regards to “liquid assets” in the context of our journey into high inflation, liquid assets will depreciate significantly. Now that might work itself out, a 10% savings account would be good for retirees.

[CroFlames]

Originally Posted by Johnny199r

My current projections are:

Annual employment pension: $65,000
liquid assets (TFSA, RRSP, non registered) = $3,880,886

Plus CPP/OAS.

Retirement age = 57.

This does not include my spouse's income.

I plan on living half the year somewhere warm every year, trying a new place every winter, and then living somewhere different in Canada for the remaining 6 months every year (ie B.C, Montreal etc)

Hope I'll still be alive then.

Smart investments (Amazon and Apple at $20), or you have a high salary right now to project that high?

[Cappy]

Originally Posted by Torture

Up early for an EST conference call...didn't have enough coffee apparently.


Personally, I don't understand how somebody would get bored in retirement. Go do stuff. Have hobbies. Just because you're retired doesn't mean you have to sit around at home all day every day. *shrug*

From my experience with these people, their hobbies were work...

My parents are really struggling with that concept. My dad was a workaholic who is still somewhat active in a few projects, but he literally has zero hobbies. They have a small hobby farm, but that's mostly my mother's project. My dad builds buildings on the property every summer for stuff to do. Other than that, he has gotten very interested in politics...

[you&me]

Originally Posted by CaptainYooh

I have spoken to many colleagues and friends who retired early (before 65). Without exception, not a single one of them was happy about making that decision. Boredom being cited as the most common reason. Underestimating the costs was the close second. As one of them said, "after the initial "yeah, I can do anything I want now" excitement, there comes "why bother getting out of bed?". In order to retire early and happy, one needs to be healthy (first) and busy (second) with things they want to do which fully occupy their days, weeks and years. Financial capacity to do the above is a variable calculation based on the cost of doing those things until you hit the age of physical incapacity to do/enjoy them. Most people tend to grossly over-estimate their capacity and ability to enjoy things later in life based on what they enjoy when being younger. Traveling to Nepal could be fun at 22, but physically exhausting, dangerous and financially ruinous undertaking at 70. I enjoy photography, golf, collecting, music, fine dining. I might think now that I can enjoy all of that when I am older. But that's just a wild guess. Wanna make G-d laugh, make some life plans.

You make a great point about being financial able and physically able to enjoy retirement, and that just gets more difficult due to the fact that you're trying to make long term plans for what's usually the most uncertain period of your life.

It's definitely a balance and I'm witnessing the fragility of well-laid plans fall apart - My uncle did well in his career, but he was basically a professional saver. Frugality was his skill set. Since retiring, he and my aunt haven't really travelled, haven't taken up any major hobbies and have basically coasted for the last 15 or so years. Recently my aunt was diagnosed with what is likely terminal cancer and they'll never have really enjoyed their retirement together. That's terrifying to me.