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Wednesday, March 29, 2017

Semi-Retired Scenario

Posted by Tim Stobbs on March 16, 2009

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.

Comments

9 Responses to “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. Canadian Dream says:

    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.

    Tim

  3. Congrats Tim on taking the initiative on starting the book. I’ve heard good things about Lulu as many have chosen to go the route of self publishing.

  4. Canadian Dream says:

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

    Tim

  5. Khorj says:

    I’d passion to replica brace with that too!

  6. James Thomas says:

    i am taking tutorial about self-publishing because it is also a good way of making money.~;*

  7. Lucas Watson says:

    self publishing is one way of earning money specially if you got a best seller:~’

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