Could I Retire Today?

Perhaps out just frustration or madness I played a little game with myself today. Could I pull the plug and retire today?

The short answer is not really. You see even if I liquidated my assets and moved to a small town in Saskatchewan where I could buy a house for under $50,000 I would still only have about $150,000 left over as a nest egg, which would spin off about $500/month (using the 4% rule). So even to live a very basic lifestyle, both my wife and I would have to have some part time work to cover the significant short fall.

Yet it does bring up an issue I think most people miss in retirement planning. You can really leave any time you like, you just have to face the lifestyle that you could afford at that time (which when your really young is living on the street).

For example, if you think you need $30,000 a year to live in retirement and you just get so frustrated at your job that you quit and can’t find another. Could you live with $25,000 a year? If so, could you do it with some part time work to cover the extras? Basically what is your true minimum you need to live your basic lifestyle and what was your assumed minimum number to live when you did your calculations for retirement.

Retirement to many is a game of numbers, I think perhaps we get too focused on the numbers that we forget that with some creative planning we can tell the numbers to shove it and move on to a different lifestyle which might suit us better.

4 thoughts on “Could I Retire Today?”

  1. I think you’re dead on. I always look at retirement as a dollars-and-cents absolute, but often when I get talking to my friends they’ll remind me that I could earn money doing some of the things I’d want to do in retirement (like do a PhD or start a business), so I don’t need to fund the retirement completely on savings.

  2. That’s a good way to flip things around and look it from a different angle. Figure out how much lifestyle you could have with your current savings.
    Then it should help you to clarify what you really need/want in retirement. If you want high speed internet ($500-600 per year), you have to save $10,000-15,000 more just for that.
    This is going to make me crunch my numbers again….

  3. Chris,

    A good idea on how to look at the numbers. It forces you to ask how much do I really need or want something.

    Thanks,
    Tim

  4. Forget Saskatchewan! One only needs about $500 (per person) per month to retire comfortably in many developing nations.

    Warm climates, tropical beaches and friendly people sound much more appealing to me than Nowhere, Canada.

    Obviously, if one has never travelled/lived abroad before you might have reservations about some issues but I think the positives would drastically outweigh the negatives if your research is done well.

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