Posted by Dave on February 7, 2012
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 made some terrible bets on the Super Bowl this past weekend. At the time I made the bet, everything seemed to make sense and I thought I was in a position to come out way ahead for the year with football betting. Unfortunately, the game did not go as well for me, either as a fan of the New England Patriots or as (I would term it) a somewhat degenerate gambler. On the plus side, my homebrew beer was delicious, as was all of the food I ate (probably too much) so my Super Bowl was fun, it just didn’t add very much to my retirement fund (which is why I don’t bet very much at all).
As far as gambling goes, the stock market is consistently a gamble – making my retirement plans somewhat risky as this is where I am hoping the majority of my cash will be coming from to fund my retirement. I’m hoping that in the 10 years I will have to invest, and the 40-some years I’m hoping to live off of these investments there is no significant collapse.
In the off-chance that I invest in stocks the same way I bet on this year’s Super Bowl (and capitalism has carried on) I do have a backup plan. In my retirement fund calculations, I have not included some funds that will be coming in. On top of my retirement savings, there are three sources of income which may be added to my retirement.
The first source is my work pension. I work for a crown agency of the Ontario government and have a defined benefit plan, which at this point is fully funded. Right now, I have no plans of leaving this company in the near future. This source should provide a significant increase to my cash flow at age 65.
The second source is Canada Pension Plan income. From everything I have read, this is a relatively safe bet, even over 30 years from now. If for some reason it turns out that the statements Prime Minister Harper made that CPP is “fully funded and actuarially sound” is not, I’ll still be okay. If this pays off, there will be a considerable boost to my retirement account.
Finally, and the one source I am not sure of is Old Age Security. Depending what you believe and what happens over the next 40+ years, this potential source of income may disappear.
Added all up, after age 65 I should (hopefully) have a considerable buffer in monthly income. I will be fine without these, but felt it prudent to not include this income – which I really have no control over.
What do you include in your retirement calculations? Do you have any “extra” sources of income that may be a buffer after age 65? (Or whatever age retirement will be in the future).
Posted by Robert on February 6, 2012
This is a guest post by Robert, who lives in Calgary and works as a financial advisor retired at 34. He is married, has three kids. Robert and his wife then plan to return to school and become teachers, eventually living and working overseas.
Now that I don’t go into an office every day to work and generate income, I’ve occasionally wondered where the time goes. Some days, I accomplish a lot, but other days I read, write, play with the kids, swim, cook and by the end of the day, I don’t feel that I’ve been very productive.
When I was at work, being productive was important. My supervisor expected me to be productive. There was work that was my responsibility to complete, and it needed to be completed correctly, and within a reasonable amount of time. Other employees were also expected to be productive, and we held the same expectations for each other. For example, too much time spent on the phone talking with family at home was frown upon. And if projects were held up because a single employee hadn’t completed their portion of it (me, as often as anyone), there was grumbling from the others.
Now that I spend a lot of time at home, I’ve wondered about the idea of productivity. The basis of productivity is the fact that something is produced, either a product or a service of value. This idea is even generalized across the economy, with the government occasionally fretting about how productivity can be increased. More work per worker should, according to economic theory, translate into more GDP per capita, making everyone better off.
Some people might call me lazy, but upon reflection, I don’t really feel a need to be productive. There’s no question that being productive feels good. I like getting to the end of a day, looking back and savouring all I’ve accomplished. But what really makes me feel good is to feel needed. For example, last week a friend of our family had to go into the hospital, so we arranged to take supper to their family. It was stressful getting dinner together (with my wife) for two families, but when we dropped it off, the stress fell away with their gratitude.
I especially feel needed now that my two sons both have swimming lessons with their classes at school. Every other afternoon, they pile the kids on a bus and take them to a city pool for swimming. The girls all go into the women’s change room with the teachers, while me and one or two other fathers take the boys into the men’s change room. It eats up my entire afternoon, but the teachers continually express their gratitude that men are able and willing to come help with the boys. It sometimes gets noisy and chaotic, but think back to the first day when they crammed all the kids in the special needs/family change room and the help us fathers provide makes it go much smoother.
Now that I’m far less productive than previously, having my money work for me, instead of working for money, I can no longer base my self image on my productivity. Rather, it’s nice to feel needed when I care for my kids and help out in my community. Do you feel needed at work, or simply productive? Where else do you feel needed?
Posted by Dave on January 31, 2012
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 previously wrote about problems I was having with my back. At the time, I decided to go to a chiropractor and physiotherapist in order to attempt to rid myself of the back pain I was experiencing. I did this for a few months, and the outcome was somewhat unsatisfactory. Rather than continuing to spend money (well, my benefits provider’s money) I chose to go another route.
Starting about this time last year, I worked to get stronger and more flexible, rather than focus on having a chiropractor or physiotherapist work on little muscles. I have been able to almost triple the amount I can squat, approaching almost twice my body weight (along with increasing my strength in other ancillary exercises) – in the process, my back pain has essentially disappeared. I’m no doctor or anything, but I don’t think it has hurt me by getting stronger.
I plan on maintaining this level of strength as far into the future as possible in order to stay as mobile as possible for as long as I can. This, along with a healthy diet will hopefully give me a good chance of being mobile into my 80′s.
Similarly, I have attempted to build a strong core financially. I am repaying my only outstanding debt (my house) as quickly as possible, and I am going to invest as much as possible in order replace employment income with investment income. At the core of my financial plan though is the simplicity of keeping my expenses low.
Low expenses, as a part of my financial plan has provided me with more financial independence than anything else I have done. I make pretty good money right now, enough that I can keep my goal of retiring at 45 in my sights. If I decide that I don’t want to do the job I’m doing right now (or something like it), I could find a job that pays minimum wage and I’d be fine financially. Working a minimum wage job would limit my early retirement opportunities but it does provide a certain amount of security knowing that I won’t be on the street if my company decides they don’t like something I’m doing or I decide I don’t want to work there anymore.
Much like building my core muscles in my body, I constantly maintain the core of my financial plan by monitoring my spending. I don’t consider myself a miser or anything, I just ensure that if I’m going to spend my money on something, it’s not a waste.
What do you consider to be the core of your financial plan? How do you maintain your focus on this over time?
