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Semi-retirement at 33?
Old 02-23-2006, 11:05 AM   #1
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Semi-retirement at 33?

My wife and I are perhaps about to embark on a life-changing journey this year.* We’ve been eyeing properties out in the Canadian Maritimes for the last year or so as a place to retire since property out there is ridiculously cheap compared to Ontario. However, up till Christmas it’s been mostly wishful “someday-when-we-retire” thinking.* There is one house in particular that we both fell in love with on Nova Scotia.* 36 wooded acres, extremely private, with a river reputed to be one of the best fishing rivers in N.S. running through the property, and close to the ocean and associated beaches. To boot, due to the depressed job market, properties are dirt-cheap.

Well, after much soul-searching over the last few months we’ve decided to drive out to N.S., see the house, and barring any surprises, put in an offer.* Aside from the obvious benefits, this would completely eliminate all our debts in one shot.* We’ve been fortunate with the housing market in Ottawa, not to mention the surrounding cottage country.* Selling our house and cottage would allow us to pay off our mortgage to the bank, pay cash for the house in N.S., and leave us with approximately $50,000 cash after expenses.*

On the one hand, it just seems crazy that we are even contemplating this.* My wife would have to quit her job as a teacher, which currently pays $65,000/year, and basically have to start over in N.S. with no guarantee of finding work in a somewhat depressed job-market.* My job is more flexible; I co-founded a design firm and I can basically do work from anywhere that has a high-speed Internet connection. I often work from the cottage and clients have no idea I’m not in the office.* I’ve worked out a deal with my business partner and instead of commuting into work everyday I would be working from my home-office in N.S.* He’ll keep the office running here in return for a bigger cut of the cash.

The biggest concern is if my work dries up.* Since my wife may not be able to find work, I could potentially be the sole income earner.* Being a very small company, my work is not as stable as a regular full-time job at a large firm.
However, our company has been operating more or less successfully for the last 8 years, so if I were to hazard a guess I would say things will keep running for at least another few years. With the investment income, we only really need about $20,000/year of income to make up the short fall for now, and at the very worse we have the $30,000 to keep us alive for a year and a half.* *I find it hard to believe to my company would be absolutely without any work for a year and half.*

Another way we’ve been looking at it is if my work dries up it’s going to happen regardless of where we live.* If we stay here my wife’s salary will keep us afloat for a short while but before long we’d be selling the cottage, 2 of the cars, and most likely the house.* If we are in N.S., we have the $30,000 as buffer. Half dozen of one, six of another.* My wife can also apply for a 1-year Leave of Absence from her job, renewable for up to 5 years.* It basically means that she is guaranteed a job at the same salary if she comes back.* Therefore, if things really didn’t work out in NS we simply move back to Ottawa, she gets her job back, and I start looking for work.


On the plus side, we would be completely mortgage and debt free, with a paid-for house, at age 33.* With absolutely no debt, the amount we’ll need to live comfortably should be less than $40,000/year according to my calculations.* Our investments are already generating approximately $20,000/year in income and we’ll be putting aside $30,000 of the $50,000 surplus into an emergency fund in a high-yield ING account.* *In a few more years our investment income should catch up to our expenses and we can fully retire.* We would also have a beautiful, treed property near the ocean, with a fishing/canoeing river in the back, near an extensive bicycle trail network, with lots of various activities possible.*


My in-laws are, unfortunately, dead-set against it.* They simply cannot understand why we’d be giving up “all that we worked for” and move so far away.* Never mind that it was perfectly fine for them to move an hour out of town when it suited them.* My father-in-law just can’t understand why I would want to retire in my mid-30’s; I can’t understand somebody who worked till he was 60 and went into to work, unpaid, 2 weekends each month.
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Re: Semi-retirement at 33?
Old 02-23-2006, 11:24 AM   #2
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Re: Semi-retirement at 33?

It sounds like you've weighed the issues and thought it through.* As you mentioned, your work is just as likely to "dry up" if you stay or go and, worst case, your wife can take a leave of absence and return.* I say go for it.
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Re: Semi-retirement at 33?
Old 02-23-2006, 12:35 PM   #3
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Re: Semi-retirement at 33?

Sounds reasonable to me......

Go for it!
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Re: Semi-retirement at 33?
Old 02-23-2006, 12:40 PM   #4
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Re: Semi-retirement at 33?

The important thing is that you obviously have thought this through and done the soul-searching.

If you calculated you can live on 40k/year "comfortably" and your investments are already throwing off 20k/year, then I'm going to hazard a guess that you could survive on 20k/year if necessary. I sure as heck know that I could, having no debt and living a simple life in the country ... and that's our plan once we become debt free and have a reasonable income from assets (I'm thinking about 24k in curent value).

I say go for it. You can always go back and you have a significant emergency fund if you need to pull up stakes and do so.

Keep us posted on how things are going once you get your high-speed internet connection up and running
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Re: Semi-retirement at 33?
Old 02-23-2006, 04:54 PM   #5
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Re: Semi-retirement at 33?

Quote:
Originally Posted by eric
My wife and I are perhaps about to embark on a life-changing journey this year.
You seem to have studied the issues and worked it all out.

Two things to consider:
- You can take risks in your 30s that you'd never contemplate in your 40s & 50s.
- If you don't take this risk in your 30s, you'll spend the rest of your life on woulda/coulda/shoulda.

Tell your inlaws they're welcome to visit anytime. 36 acres should be enough space to get along with almost any relatives...
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Re: Semi-retirement at 33?
Old 02-23-2006, 06:30 PM   #6
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Re: Semi-retirement at 33?

Count me in with your father-in-law.

What are you thinking man?

Does your wife agree with all of this?

Are there any children in the picture?

Your wife has a gold-plated pension (OTTP), probably the best run plan in the world.

Stay hands on with the business. Run it the way you want and maximize your income.

Your wife would have put in bigtime sweat getting her job. That's probably one of the reasons why her Dad thinks you're nuts.

Revisit the semi-retirement thing at 40.



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Re: Semi-retirement at 33?
Old 02-23-2006, 06:46 PM   #7
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Re: Semi-retirement at 33?

Nova Scotia, pretty in the Summer but the people can be pretty unfriendly to outsiders.

My Wife is from Amherst, insular thinking, everyone is related to everyone else, why not stick with Ontario, you can find good values there??

You guys are too young, what if kids come, that is not fair to the Grand Parents .

I'm a Dad, I would hate to not see Grand Kids more than once a year, or my Children.
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Re: Semi-retirement at 33?
Old 02-23-2006, 07:47 PM   #8
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Re: Semi-retirement at 33?

Quote:
Originally Posted by Maximillion
You guys are too young, what if kids come, that is not fair to the Grand Parents .

I'm a Dad, I would hate to not see Grand Kids more than once a year, or my Children.
Is ER some sort of minimum-age club? Because when I get to be your age, Max, I hope I'm not as old as you...

(*snort*) You want to see the grandkids all the time, then you raise them!
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Re: Semi-retirement at 33?
Old 02-23-2006, 08:07 PM   #9
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Re: Semi-retirement at 33?

I can see both points of view on this, but the fact that your wife can take an extended leave of absence seems to make this nearly risk free.* If things don't work out after a year then move back - wife gets her job back and you still have the business.* I say go for it - you're way young enough to recover from any potential mistakes.

Quote:
Originally Posted by Maximillion

You guys are too young, what if kids come, that is not fair to the Grand Parents .

I'm a Dad, I would hate to not see Grand Kids more than once a year, or my Children.
We're lucky to see our parents once a year - that's life.* Any unhappiness caused by that should be offset by the realization that we're doing well, living our dreams, and are extremely happy with where we are.* I would hope any parent would put their child's happiness above a selfish desire to see them every day or week.* Besides, I think we all get along fabulously precisely because we live so far away.

Can't imagine ever making decisions based on "fairness to grandparents" whatever that means... especially if the kids are only theoretical at this point.* Grandparents always have the option to move too.*
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Re: Semi-retirement at 33?
Old 02-24-2006, 02:39 AM   #10
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Re: Semi-retirement at 33?

First, I would make sure that DW and your business partner is absolutely on the same page with you.

Then, I would call the first year a try out period, if possible not selling the house in O., not terminating the teachers job but taking the leave for one year and find out how to get along with the seasons and people in your new environment and how the job situations develops.
I would not burn the bridges behind me - I am a very risk averse person.

Additional money could also come from running your new home as a B&B, your wife giving language lessons for grown up live-in students.
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Re: Semi-retirement at 33?
Old 02-24-2006, 07:46 AM   #11
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Re: Semi-retirement at 33?

I would say go for it. You've got the safety cushion of a year and a half saved up along with the possibility of your wife going back to her job if it doesn't work out. We bailed out in December as my wife turned 34 and I turned 33 in January. I have no regrets and love the freedom and the ability to spend time with my son everyday. We saved up a years worth of expenses and solidified our RE business before we left. I love what I'm doing now and could do "it" for 15-20 years as semi-retired.
Life is too short and I've always said that I would not look back on my life and say "man I wish I would have done xyz."
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Re: Semi-retirement at 33?
Old 02-24-2006, 10:14 AM   #12
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Re: Semi-retirement at 33?

I appreciate the feedback.

Just to clear up a few things.* We don’t have kids, we don’t want kids, and we’re not having kids.* We have dogs.* This was something we decided long, long ago.*

This change is something we’ve been discussing exhaustively since Christmas and we only really decided a few weeks back.* Everyone’s relationship is different; we make decisions together by weighing the pros and cons and she is fully on-board.* My business partner is fully onboard; he’s happy to have the extra cash and is already day-dreaming of buying a BMW.* I’m happy to trade off some cash in return for more of my time.

We tried looking in Ontario, but property values are way too high.* For the price we would be paying for this house ($140,000), in Ontario we would only get a 1000 sq ft cottage on a couple acres.* Part of the issue for us is that we don’t want to see or hear our neighbors, and 4 or 5 acres doesn’t buy you that.* At least with this house, the nearest neighbor is over a mile away with nothing but trees in between.* We looked in Quebec as well.* There, you get more for your money but we decided against it because my wife doesn’t speak French and would seriously limit her social/employment possibilities.* BC and Alberta are just a pricey as Ontario.

My wife does have a great pension plan, but only becomes eligible for the full pension until she hits the 85 factor (age + years of teaching).* This wouldn’t happen until she was 57 years old.* We don’t want to work that long.* Retiring before then costs us 2.5% per point she is away from the 85 factor.* Retiring in our mid-40’s would result in her pension being reduced by 60%.* Pension is calculated as (2% x Years Teaching x Average Best 5 years Salary).* Call Average Best 5 Years $70,000, throw in the reduction, and mid-40’s retirement nets her a whopping $10,000/year.* I don’t think 10 years of our lives are worth a measly 10K a year.*

My business has provided me an above average salary, a couple nice cars, a nice house, a cottage. However, in return for the above average salary, it demands alot of my time.* I had to install 2-way satelling high-speed internet at my cottage in order to be able to go spend time there.* On vacations, roughly 1/4 of my time is spent working and answering "urgent" phone calls from clients.*

We're both quite unhappy with this current situation and are looking for ways to remedy it.* This seems like the best way.* We don't want to be one of these anecdotes about the couple that finally retires and then 3 weeks later one of them kicks the bucket.*

To quote: "This is your life, and its ending one minute at a time."

Or even better: "No dress rehearsal, this is our life"
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Re: Semi-retirement at 33?
Old 02-24-2006, 10:58 AM   #13
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Re: Semi-retirement at 33?

Hey, great post, and it sounds like you've really made a wise decision, considering you and your wife's situation, and your desires.

If you go through with it, I hope it turns out well!
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Re: Semi-retirement at 33?
Old 02-24-2006, 11:14 AM   #14
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Re: Semi-retirement at 33?

GO NOW! I think you can live on 20K if you have to while one of you found other work. Try* to live on 30 K the first year as an experiment. or 30 K plus whatever renovations you want to do to your new home.

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Re: Semi-retirement at 33?
Old 02-24-2006, 12:17 PM   #15
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Re: Semi-retirement at 33?

Quote:
Originally Posted by eric
Just to clear up a few things. We don’t have kids, we don’t want kids, and we’re not having kids. We have dogs. This was something we decided long, long ago.
Thats what my wife and I said.

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Re: Semi-retirement at 33?
Old 02-24-2006, 02:49 PM   #16
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Re: Semi-retirement at 33?

Life's an adventure. Live it.
Keep us posted.

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Re: Semi-retirement at 33?
Old 02-24-2006, 03:16 PM   #17
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Re: Semi-retirement at 33?

Quote:
Originally Posted by Cute Fuzzy Bulldog
Thats what my wife and I said.

What changed your mind?
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Re: Semi-retirement at 33?
Old 02-24-2006, 04:04 PM   #18
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Re: Semi-retirement at 33?

Quote:
Originally Posted by Sheryl
What changed your mind?
What gave you the impression that he changed his mind?
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Re: Semi-retirement at 33?
Old 02-24-2006, 05:57 PM   #19
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Re: Semi-retirement at 33?

On the one hand, I'm thinking you're too young to move out to the middle of nowhere.* You will undoubtedly be pretty isolated in the new place, given how rural it sounds, and how far away it will be from your friends and loved ones.* Is that really the life you want for yourself?*

On the other hand, you're young.* If you don't like it after a few years, you can always sell the place and change your lifestyle.

Or can you?* You're going to be moving out to a place where property probably will not appreciate very fast.* You're going to be living partly off your investments, thereby preventing them from growing very big.* And your wife will be struggling to find a job, and you'll be trying to keep your business alive long-distance, for probably less money than you're making now.

If, 10 years down the line, you decided you wanted to move back to the big city (or even a medium sized city), there's a pretty good chance you could find that you could no longer afford it, thanks to your reduced incomes, reduced investment growth, and reduced property appreciation.* Basically, you'll be seriously stunting the growth of your net worth.* That's not so bad if you're 50 and damn sure you're ready to take it easy for the remaining years of your life.* But at 33, you have so many decades ahead of you, your attitudes and priorities are likely to change multiple times before you die.*

As you're obviously well aware, having money enables you to make major life changes.* But it just seems to me like if you make this particular change that you're considering at this early point in your life, it's going to be much, much harder to make major changes in the future.* You may feel trapped by your financial situation 10 years from now.
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Re: Semi-retirement at 33?
Old 02-24-2006, 07:22 PM   #20
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Re: Semi-retirement at 33?

Quote:
Originally Posted by Nords
What gave you the impression that he changed his mind?
Maybe I'm confusing my avatars again. I was thinking that the cute fuzzy bulldog had a cute fuzzy young one at home.
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