Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Canadian looking to retire soon at 44 yrs.
Old 09-09-2016, 11:39 AM   #1
Dryer sheet wannabe
 
Join Date: Sep 2016
Location: Canada
Posts: 10
Canadian looking to retire soon at 44 yrs.

Hi there,

This is my first post. I have been lurking for many years and would like to thank the community for inspiration to become financially independent.

I am 44, married with 2 pre-teen kids living in Canada. My wife and I have been fortunate enough to be able to buy a house in 1997 when prices were reasonable. We also are fortunate to both have 6 figure salaries in IT ($170K for me and $130 for her). In the last few years I have become increasingly unmotivated at work (megacorp) and am planning on leaving within the next 3-9 months.

All $ are in Canadian.

Net worth is around $3.8 Million, which consists of our primary residence with about $800K and the rest invested in Stocks, ETF's and preferred shared. Our asset allocation is about 80% equities, 15% fixed income and 5% cash. We have no debt. Our $3M investments currently yield about $80K in dividends. Most are Canadian Dividends which are tax favourable.

Our annual spending is about $100K. This includes $15K that goes to our financial advisor that manages about $2M of our portfolio. I am considering leaving our financial advisor as the $1M I manage myself with ETF's consistently out performs him. This can take our annual expenses down to $85K.

Healthcare is not a huge concern as Health care in Canada covers much of our needs. My wife still enjoys her job and plans to continue working for at least a couple of years. We will continue to get dental and vision coverage through her benefits plan from work. Once she retires, we will look into additional health care coverage, but I don't anticipate it to be much.

I believe we are at the point of financial independence assuming a 2% inflation and 5% return, but would appreciate other's opinions.

I don't expect our spending to go down once I retire, in fact it may go up with the kids approaching their teen years. We plan on assisting our children with their post-secondary education and have set up an RESP plan currently valued at $150K (included in our $3M portfolio).

I also believe this is a good time to spend more time with the kids. The extra attention with school and studies that I will be able to afford once I retire will be invaluable. I want to spend as much time as I can with them before the teen years when they will want to have less to do with their parents.

I know that many will be asking what I will be doing with my time, but in addition to family, I do have many projects and hobbies lined up.

I plan on regularly updating this thread to keep you in the loop. Any feedback on our plan would be appreciated.
__________________

__________________
cakskg is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 09-09-2016, 02:15 PM   #2
Moderator
MBAustin's Avatar
 
Join Date: Jul 2010
Posts: 3,435
Welcome cakskg!! If you haven't seen them yet, check out these two helpful items:

Some Important Questions to Answer Before Asking - Can I Retire?

and

Early Retirement FAQs - Early Retirement & Financial Independence Community

As I'm sure you realize from your lurking, there are a number of Canadians who post regularly, and also a number of folks who have ER'd with school age children. And the vast majority would tell you to fire your FA immediately, especially since you are already comfortable managing some of your investments.

If you aren't tracking expenses closely, that would probably be a good idea, in case you need to reduce discretionary items at some point.

It sounds like while your DW is still working, you can live on her salary without drawing on your investments, which would certainly be a good thing. I assume you are reinvesting your dividends, so you also have that source of income if needed which would not touch your investments. So as long as you keep your expenses in check, you look to be in pretty good shape to pull the plug, IMHO.

We'll look forward to you posting more in the future as one of your new hobbies
__________________

__________________
"One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute." William Feather
----------------------------------
ER'd Oct. 2010 at 53. Life is good.
MBAustin is online now   Reply With Quote
Old 09-09-2016, 02:16 PM   #3
Full time employment: Posting here.
DrRoy's Avatar
 
Join Date: Dec 2015
Location: Michigan
Posts: 878
Definitely fire the FA. Why pay good money to get a lower return? I did the same thing a couple years ago. Your situation looks pretty strong. You can get more analytical about it by running the numbers through Firecalc.
__________________
"The mountains are calling, and I must go." John Muir
DrRoy is offline   Reply With Quote
Very strong position
Old 09-09-2016, 02:18 PM   #4
Recycles dryer sheets
 
Join Date: Jul 2014
Posts: 54
Very strong position

Cak, great to see a fellow Canadian story.

For context, I have considerably more than you do in assets and liquid worth but I also need considerably more and am a little older.

In your case, I think you are in outstanding position given your age and stage. Your $3M in productive assets (assuming a mix of RRSP, TFSAs and taxable, but mostly taxable) should produce closer to $$120K in dividend income if properly invested by you, without paying a financial adviser. $120K would deliver over $100k net in most if not all provinces. As you point out, the treatment on taxable dividends is exceptionally favorable at your level particularly if the assets are owned jointly by you and your spouse. You could be in position to pay nearly zero tax.

Health care is not a concern and kids RESPs are fully funded. Well done.

Your portfolio will move with inflation and you should never have to touch principle unless your spending needs rise considerably.

The only slight concern I would have for you is longevity and the uncertainly it creates. If you plan to be open to supplement income along the way if you have to, or do an encore career, consult, dabble, or whatever for money later on, you are completely financially independent now and can do what you want. PM me with questions if you would like. Happy to share additional insights that might be specific to Canadians.
__________________
timemoveson is offline   Reply With Quote
Old 09-09-2016, 03:16 PM   #5
Recycles dryer sheets
 
Join Date: Feb 2011
Location: Northern Cal
Posts: 172
Quote:
Originally Posted by cakskg View Post

Our annual spending is about $100K. This includes $15K that goes to our financial advisor that manages about $2M of our portfolio.

Call me cheap, but I cringe at paying $15K annually for management advice on a $2M portfolio.
__________________
swakyaby is offline   Reply With Quote
Old 09-09-2016, 03:21 PM   #6
Thinks s/he gets paid by the post
Sunset's Avatar
 
Join Date: Jul 2014
Location: Chicago
Posts: 2,759
Welcome, You seem in fine shape.
Yes dump the FA and save the money instead of paying for poor expensive advice.
Sounds like with the RESP your kids have University covered assuming they go within Canada (which is fine and respectable and affordable). I know some Yanks that have gone to Canada to attend University (and they had to pay double the Canadian rate as foreign students).

Have you considered how many years you currently have in CPP to make sure you are eligible ?
__________________
Sunset is offline   Reply With Quote
Old 09-09-2016, 03:26 PM   #7
Recycles dryer sheets
 
Join Date: May 2013
Location: Toronto
Posts: 157
Quote:
Originally Posted by Sunset View Post
Have you considered how many years you currently have in CPP to make sure you are eligible ?
Pretty sure there's no minimum for CPP. It's just that the amount they pay you will be less if you have less years of contributions.
__________________
Spudd is offline   Reply With Quote
Old 09-14-2016, 01:31 PM   #8
Dryer sheet wannabe
 
Join Date: Sep 2016
Location: Canada
Posts: 10
Thanks all for the replies.

@MBAustin - Great points. I have been diligent in tracking my expenses to the penny since 1999 using Microsoft Money. Our spending in the last few years has been: $100,089; $110,587; $96,862; $111,402; and $107,344. M Wife is happy with her work and she expressed that she would still like to continue working for a few more years. Also by leaving our Financial Advisor, it will drop out annual spend by $15,000.

@timemoveson - I would be very interested to find out how to get a 4% yield without having too much risk in the market. I will PM you for details. I am open to other work in the future, though probably not in my current field as I find it too stressful and once I leave I have no plans on returning.

@Sunset - I'm not really factoring in CPP or OAS in my calculations. Thought I have been working 20 years in Canada and have lived here all my life, retiring early will have an effect on what CPP will pay out, though I'm not sure how much. Additionally, I don't have confidence that our government programs will even be around (at least in this form) by the time I hit 65 or 70. If I do get something, I will treat it as a bonus.

Finally, my original estimate of packing it in between 3-9 months might be accelerated closer to 1-4 months as work conditions are not improving, and I see no point in drawing it out. I will keep you updated.
__________________
cakskg is offline   Reply With Quote
Old 09-14-2016, 03:44 PM   #9
Recycles dryer sheets
 
Join Date: Nov 2013
Posts: 123
Sounds good as long as you lose the financial adviser and closely watch your spending increases. My only question is wife totally on board with your retiring while she works? If so she is a keeper.
__________________
highlow65 is offline   Reply With Quote
Old 09-14-2016, 04:38 PM   #10
Dryer sheet wannabe
 
Join Date: Sep 2016
Location: Canada
Posts: 10
Quote:
Originally Posted by highlow65 View Post
Sounds good as long as you lose the financial adviser and closely watch your spending increases. My only question is wife totally on board with your retiring while she works? If so she is a keeper.
Yes - definitely a keeper!
__________________
cakskg is offline   Reply With Quote
Old 09-26-2016, 11:55 AM   #11
Dryer sheet wannabe
 
Join Date: Sep 2016
Location: Canada
Posts: 10
My original thoughts of retiring next July moved up to March 2017, then to Dec 2016, then end of Oct 2016.

However, I saw no point in extending it any further. There were a number of projects that I was being asked to commit to, which I really had no interest in working on. So, I formally tendered my resignation last Friday and my last day will be Oct 7.

I'm wrapping up all my existing engagements, but it feels great knowing that in 2 weeks, I can leave all of this behind. I did provide constructive criticism to my management team in hopes that it may prevent others from leaving in the future but overall I am leaving on a high note.

It seems to strange to use the term retirement when announcing it people since I'm only 44, so I am saying "I'm taking a break from the workforce to spend more time with the family." However I have no plans on returning. Perhaps once my kids leave home I may be interested in finding part time work, but not in the IT industry.
__________________
cakskg is offline   Reply With Quote
Old 09-26-2016, 12:00 PM   #12
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2006
Posts: 9,774
Well, that escalated quickly! Congratulations.
__________________
Meadbh is offline   Reply With Quote
Congrats!
Old 09-26-2016, 12:18 PM   #13
Recycles dryer sheets
 
Join Date: Jul 2014
Posts: 54
Congrats!

Yes, that did move fast. I'm certain you will come up with the balance formula you need to either take a significant or permanent break from work.
__________________
timemoveson is offline   Reply With Quote
Old 09-26-2016, 10:15 PM   #14
Thinks s/he gets paid by the post
kcowan's Avatar
 
Join Date: Jul 2006
Location: Pacific latitude 20/49
Posts: 4,539
Send a message via Skype™ to kcowan
Congratulations! You will find many challenges so please come back here for more guidance.
__________________
For the fun of it...Keith
kcowan is offline   Reply With Quote
Old 09-26-2016, 10:43 PM   #15
Recycles dryer sheets
Markola's Avatar
 
Join Date: Nov 2013
Posts: 446
Quote:
Originally Posted by cakskg View Post
"I'm taking a break from the workforce to spend more time with the family." However I have no plans on returning.

I plan to say I'm taking a "sabbatical", one that anyone who pays attention will eventually notice never ends. Bravo for saving so well and congrats!
__________________
Markola is offline   Reply With Quote
Old 10-01-2016, 01:36 PM   #16
Dryer sheet wannabe
 
Join Date: Sep 2016
Location: Canada
Posts: 10
Another step forward. We have left our financial advisor and started the process of transferring out our portfolio to self directed accounts.



Sent from my iPhone using Early Retirement Forum
__________________
cakskg is offline   Reply With Quote
Old 10-11-2016, 07:29 PM   #17
Dryer sheet wannabe
 
Join Date: Sep 2016
Location: Canada
Posts: 10
Today was my first official day of retirement. Friday was my last day at work. Since I work mostly from my home office, there wasn't a big fanfare - It was actually anti-climatic and didn't even see anyone from work as I had already wrapped everything up. The guys on my team did take me out to lunch earlier in the week.

I sent my goodbye email to people I have worked with over the past 20 years and got many warm wishes - probably close to 100. I also got 5 job offers in different departments and external. It's nice to know that I do have options if I ever decide to go back, however, chances of that are extremely slim.

Yesterday was Canadian Thanksgiving, but today was the first day of freedom. It was actually pretty busy. I have a very long to do list, but it was nice to know that I have a lot more time to complete it and there really is no pressure, like the kind you have with work deadlines. I could really get used to this.

I did get 1 phone call from a former colleague regarding work - I guess some people don't want to let go, but it was alright. Overall, I was feeling nervous but now that it's here I feel a great weight lifted off my shoulders.
__________________
cakskg is offline   Reply With Quote
Old 10-11-2016, 08:40 PM   #18
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2006
Posts: 9,774
Congratulations. I hope you had a wonderful Thanksgiving! Lots to be thankful for.
__________________

__________________
Meadbh is offline   Reply With Quote
Reply

Tags
canada, family, retire


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Family of 6 looking to retire soon but need help! PackingBags Hi, I am... 10 12-19-2011 04:51 PM
Soon ... Very Soon Traxless Hi, I am... 10 03-26-2011 05:24 PM
40 yrs of age from Hawaii and hoping to retire in 15 yrs. DailyGrind Hi, I am... 10 03-07-2011 05:17 PM
Hi, from soon to be FIRE, looking to retire to Italy. DFA Hi, I am... 8 01-17-2011 03:50 PM

 

 
All times are GMT -6. The time now is 11:41 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2016, vBulletin Solutions, Inc.