This is a guest post by Dave, who is also looking to retire no later than 45, but unlike Tim has no kids and doesn’t want any. Dave is from Ontario and is working towards his CGA certification.
I am still 14 years away from my calculated retirement year. This is a LONG time from now, and any number of things could happen to my financial plan that could change my retirement date. Currently, I can’t really see this date changing – I haven’t had a change of heart over the last 2 or 3 years since this became a centre-piece of my personal finance plan. So, until then, I am keeping December of 2024 in my sights as my exit from the workplace.
It may seem (to some) that having this strict “out” date puts too much emphasis on retirement and not enough on living now. I don’t really think that I restrict myself in anything I do, I just realize that if I want to spend my money on something like a $2,000 trip to Mexico (where my wife and I went in December) or a new(ish) car it requires some extended planning rather than just going out to the store and buying it.
I was talking to my wife about our retirement plan this week and wondered basically what I would do with all of the extra money we would have if we weren’t utilizing a significant percentage of our earnings to either pay down our mortgage or eventually save for retirement. If I continued to make the kind of money that I currently make, I think that spending the extra money rather than investing it or applying it against our mortgage would lead to significant amounts of waste. I would be buying things that I didn’t need and wouldn’t use that would fill up my house.
One alteration to my plans that could possibly alter my exit date is a change in career. 14 years is a long time to be at the same place and at some point I may decide (or my employer may decide) that my current position is not the correct fit for me. I make fairly decent money right now, so a change that results in a significant decline in income could adjust the date. Besides that, I may decide that I want to work 80% (or less) of my current work week (like Tim) which would reduce my income.
Besides a change in career, a change in a spending goal could alter my exit date. If (for some reason) some super-expensive “thing” became a priority to me or my wife (such as a luxury car, or significantly larger house) – we could buy it, it would just result in an increase in the number of years we’d have to work to save for the “thing”. The only reason I could see this spending change happen would be if we decided I wanted more land than the current 10 ft x 10 ft area we have right now.
I’m sure there are many other things that could change my retirement plans, but these are the two main ones that would change my retirement plans by years rather than weeks. What can you see changing your retirement plans significantly?