Semi-Retired Scenario

Well at the end of my last set of retirement calculations I mentioned I had several other scenarios that I wanted to run.  So far I only finished the analysis of one of them: semi-retirement at 40.

Semi-retirement is a somewhat attractive option since it allows me to:

  • Leave my current work five years earlier.
  • Boost my CPP payout in retirement, since I would work part time till 60.

The plan would look something like this.  I would work until 40 and during that time I would build up about $136,000 (assuming 4% average return) in my pension.  Then if I don’t touch that money till I’m sixty I would have about $300,000.  That money with CPP and OAS would be more than enough to provide me with about $30,000/year during my retirement.

I would also continue saving in my TFSA and RRSP prior to 40.  That pool of cash would provide about $11,000/year in semi-retirement.  So with the mortgage gone that would mean I would be able to cover my property tax, food, the water, power, natural gas and phone bills.  Everything else would have to be covered by a job.  So depending on how much travel I want to do during semi-retirement I would need an income of $16,000 to $19,000 a year.

Now of course an option during this time would be to pick a job that provides a bit more income and then I could shift into full retirement a bit earlier if I like.

There are downsides to this plan, such as:

  • I have to work.  Some income is required right up until 60.  If health issue come up and prevent me from working it might cause a reduction in standard of living.
  • Full retirement then is pushed off until 60, unless I earn more money during the semi-retirement.

In the end as attractive as getting out of work earlier is I think I would wait a few more years to finish covering off at least all my basic expenses.  I might be willing to quit a bit early if my travel money wasn’t saved yet, but I have issues with being forced to work all the way until 60.  Espcially when I would be saving so much money at 40 that waiting a few more years would let me significantly reduce my income required during the semi-retired phase.

9 thoughts on “Semi-Retired Scenario”

  1. Hey Tim, how about instead of “working” part time, find a hobby that pays? Perhaps you could work on a book that you’ve always wanted to write. Or perhaps increase your online income etc.

  2. FT,

    I’m already at page 104 on the first book. Actually I’m just researching how I would like to get it published. I’m deciding if I should go the Print on Demand model (like Lulu) or self publish myself or take the longer route of finding a traditional publisher.

    Then I have ideas for at least two other books and one more blog.

    I know what your getting at and I would like to do something like this at least part time in retirement. Yet at the same time I would like to have the basics covered so the business income is only picking up the extra stuff.

    The income from these ventures are highly variable so I would like to be in position where I don’t need the income.


  3. Thanks FT! I’ll keep everyone posted on who the project is going (mostly on Twitter).


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