strathglass
Dryer sheet wannabe
- Joined
- Jan 1, 2008
- Messages
- 19
Hello!
Long time reader who is working on a RE plan: DW and I are both 52 hoping we can retire at 56, based on our savings (no DB pensions) and the modest Canadian CPP pension most workers here will get (I believe CPP is akin to SS in the USA).
The plan relies heavily on downsizing our Toronto area home and moving elsewhere in the province where prices are considerably lower (current house is paid for and now worth about 1MM more than the price we bought it for 14 years ago!). Good thing there is no tax in Canada on profits from the sale of a principle residence!
The plan:
So a couple issues we wonder about:
Any comments welcome!
Long time reader who is working on a RE plan: DW and I are both 52 hoping we can retire at 56, based on our savings (no DB pensions) and the modest Canadian CPP pension most workers here will get (I believe CPP is akin to SS in the USA).
The plan relies heavily on downsizing our Toronto area home and moving elsewhere in the province where prices are considerably lower (current house is paid for and now worth about 1MM more than the price we bought it for 14 years ago!). Good thing there is no tax in Canada on profits from the sale of a principle residence!
The plan:
- Retire in 4 more years at age 56, with modest further savings until then added to our tax-deferred RRSP accounts.
- Don't touch those RRSP savings (currently 1.55MM) for 8 years until age 60
- Downsize at retirement, and pull out 600k in the process.
- Half of that 600k is for us to live on for 4 years until age 60 ($6k a month).
- The remainder goes to portfolio and grows for a further 4 years.
- At age 60, hopefully portfolio has reached 2.25MM: this lets us maintain $6k/month spending (after taxes) assuming early government CPP benefits of $13k/year total (6k5 each), and assuming a withdrawal rate of 3.2% from our portfolio (potfolio is 55% low cost broad market equity ETFS, 45% 5 year bond ladder [GICs]).
So a couple issues we wonder about:
- Does 3.2% sound like a good SWR? (Firecalc shows 100% success if you start at 2.25MM and 3.2%).
- How would we deal with any market hiccups in this next 8 year period? They could throw a monkey wrench into the plans...if it happens in the first four years we could delay retirement, but if it happens in the last four years - after we retire but before we start withdrawals - that would be tougher.
- What if we want to retire at 56 and stay put for two years before relocating? We'd have to withdraw from our portfolio early. It is harder to factor in the impact of this kind of change.
Any comments welcome!
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