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Tuesday, March 28, 2017

Oct 2016 – Net Worth

Posted by Tim Stobbs on November 8, 2016

The following is an update of Tim’s plan to retire early.  Please note we are mortgage free.

Our ultimate goal between investments and the home equity is a net worth of around $1 million.  The investment part of that target is $550,000 (or higher).

Investments

Accounts

RRSP $51,720
LIRA $15,390
TFSA $74,200
Pension $148,000
Wife’s RRSP $81,890
Wife’s TFSA $65,350
Wife’s Taxable $58,070
High Interest Savings Account $6990

Investment Net Worth $501,610 (increase of $4850 over last month)

Home Equity

Estimate $395,000

Spending

Last Month $1528

Would have been lower but we bought groceries at the start and end of this month.  Oh well, Nov spending will just be lower.

Trailing Last 12 Month Average $2597 (or $31,170 for the last 12 months)

Results

PF Score: 28.7 {Target 31}

Net Worth ~$896,610

Commentary:

Yah! We broke the half a million investments barrier this month!  That is a nice goal to reach and of course it means we are looking at saving our last $50,000 or so.  Which if the stock markets are kind we should be in a position for me to retire early some time next fall or winter but I will have to wait to see how it all falls out.

Any questions?

Net Investment Oct 2016

(click to make bigger)

Comments

3 Responses to “Oct 2016 – Net Worth”
  1. Dan says:

    If you are not planning on using your home equity for retirement financing (unless you plan on selling or doing a reverse mortgage), why do you use the $1.0MM net worth target for your retirement calculation?

    Quite frankly, what the home is worth or any other assets, has no value on your calculations unless you plan to liquidate them to use the equity.

    Can you share again anticipated revenue streams post retirement? An investment portfolio of $550,000 appears rather low to retire at 45 – generating only $27,500 at 5% – before inflation.

  2. Tim Stobbs says:

    Dan – The home equity is included since by paying off my mortgage has dropped our expenses. Also the equity is a backup plan should the investments do poorly and we decide to downsize in the medium term (~10years). Overall the million dollar target is a nice to have number and not a requirement of the plan.

    I should clarify, I plan to semi-retire. I just don’t get hung up on the term since I’ve mentioned it a lot in previous posts. I plan to do a post on the income streams in the future but in a rough summary (1/3 should come from dividends, 1/3 from employment, the last third will be a combination of government benefits and capital gains).

  3. Theo says:

    At age 45 a 3% withdrawal rate seems more reasonable to me in this environment, so $550,000 would give me an annual income of $16,500
    Closer to age 65 you have the added cushion of OAS and CPP in the near future, so at age 60 a 4% withdrawal rate seems reasonable

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