Category Archives: Retirement

The Last Day of Work

Yesterday was my last day of work and it was a very good day.

It all started off nicely with a spring in my step and a smile on my face as I slipped on my retirement ring for the first time prior to leaving to work.  This was the last time I was going to my job downtown.  No more alarms, no more delays from construction on my route and no more worries about being late.  And when I get into the car to drive I have to smile as the song comes onto the radio “Goodbye” by Glenn Morrison which seems like a perfect sound track to this day.

Upon getting downtown and into my office building I get a coffee and chat with a few of the co-workers.  We speculate that I’m the front of series of changes over the next five years at work as several of the older workers are planning retirements in the next few years. I realize that I won’t even recognize the staff in this place in a few years anyway.

Then I sit down to my computer and finish the final purge of data.  I go in a delete every bookmark I ever had, my phone has every personal app I ever installed deleted, and I delete anything remotely personally off my hard drive from vacation pictures used as backgrounds to old expense forms.  I then pack up the last few items left on my desk (which is about three things since I have been slowly taking things home now for two weeks). Then I sit down and read some fun stuff on the internet since I really have nothing left to do at this point.  I’m waiting for my very last meeting with my boss at 9am.

I also take a moment to check into with myself.  How do I feel?

Fear or doubt? Nope, that happened back when I gave notice.

Regret? Not a trace of that.

Excitement? Honestly a bit, but not too much.

In the end more than anything else I feel impatient.  I’ve been waiting for this day for about 11 years now and I just want to get the last few items over with so I can move on and start my new lifestyle.  There is no more delays, no more second guessing, I’ve quit this job and career for better or worse and I just want get the rest of these final items done with so I can get the hell out of here.

The meeting with my boss finally comes and we walk down a floor to a meeting room and do my final performance review.  I’m nice and fake interest in the entire procedure, but honestly I’m thinking ‘why are we even bothering with this?’  My rating is literally irrelevant at this point since it won’t change anything.  I could get the maximum rating or the bottom rating and not one thing would change. I’m leaving and I don’t qualify for any bonus money or a raise anymore. Then finally we submit that form and we hit the good part of the day were we discuss the final few items that I need to deal with before I leave.

The issue is this is my last day in the office, but I’m officially on vacation for the next six weeks.  So I’m still an employee with a paycheque and benefits even if I’m not in the office.  I have previously discussed this situation with my boss and said under no uncertain terms would I be coming back to finish up any paperwork after my vacation ends.  So I ask how he wants to collect my last few items like my parking pass, employee ID and work cell phone.  He agrees to me leaving it all in an envelop on his desk once I’m done.  I also mention that I have a bit of vacation left so I will be leaving early, so I get the usual reminder to enter it the system before I leave.  Then we have one last short discussion regarding expectations while I’m on vacation.  I point out I expect that I expect people to try to resolve issues on their own before contacting me for help and I won’t be sitting beside the phone or email.  I do check my email daily so we agree to that being a reasonable timeline. I’m on vacation and it isn’t my fault that they still don’t have approval to fill my position (don’t you just love the fact it’s been six weeks and they still don’t have that done) so I haven’t even met my replacement to train him (or her).  Instead I’ve leaving behind 200 pages of documentation on how to do my job and they will have to sort it out.

Then my boss informs me that he got me a goodbye gift which catches me a little off guard.  I have honestly expected nothing from this company so the gesture is nice as he picked out two bottles of wine and says “At least you can enjoy a drink without having to make it first.”  I smile, as it shows that he actually paid attention to our casual conversations over the years and he knows I will actually enjoy this gift.  I thank him and I really mean it as I shake his hand for the last time.

Then the goodbyes start with the rest of the office.  One co-worker buys me a coffee before I leave which is appreciated.  Then I tour around the office shaking hands and saying goodbye to those that I will miss the most and I skip the rest.  I’m not making a big deal out this day more than it already is.  After all I have most of their well wishes already in a card I got the day before at my goodbye lunch which honestly impressed me as they got almost the entire department to sign it despite the fact we are spread out over the entire province in various locations. Then with a few final goodbyes I grab my bag and drop the envelope of final items on my boss’s desk (he is gone at meeting) and the door closes behind me with a click as the electronic lock engages.  There is no going back now.

Then on the elevator going down my face breaks into a grin.  I’m out. I’m free of this place.  The air is cool outside but I don’t feel it.  I take the long route to my car because I can and I head home to have lunch with my family.

The rest of the day passes quickly.  I cook my pepper steak for supper and open one of the gift wines from work to drink.  Then afterwards I break open my 18 year old scotch.  It’s ridiculously smooth as I drink my glass and relax in my chair.

Then I check in again.  How do I feel?  It honestly hasn’t fully hit me yet.  I’m done but it doesn’t seem real.  I suspect the full impact will kick in next Monday when I don’t have to go to work anymore but for now I’m relaxed and looking forward to next week and filling up those extra 40 hours.  This is going to be fun.

It’s My Retirement Party So Piss Off

If one more person tells me how to celebrate my retirement I may have to hurt someone!  Seriously people, it’s my retirement so why does everyone else keep projecting their wants onto me and telling me I should take everyone in the department out for drinks, have the entire department out for lunch, have a retirement tea or a big party at a hotel? Pardon?!?!

I suppose they mean well since they want me to celebrate the event but they just can’t seem to wrap their heads around the fact I’m not a big party kind of guy.  I’m more of a low key celebration type of guy and as such I’ve already decided my retirement celebrations will be modest.  There will be no epic party, huge guest list or flashy celebration.  I will not be inviting the media to attend.

Instead, what I actually have planned this next week is just two events.  The first is I’m going out to lunch with my immediate work group of eight people at a restaurant a block away.  One last lunch with my co-workers to celebrate with those that I work the most with.  I actually have no desire to have the entire department come as it may come to a shock to some people but I don’t like everyone that is in my department so I would rather not have them there.

The second event is also low key.  Just dinner at home with my wife and sons.  I will even be cooking that supper because I want to eat an old favorite recipe, pepper steak, that I haven’t made in years.  Then afterwards I’m going to open the 18 year scotch that I bought for this event and have a drink of a liquid that is older than my engineering career. That’s all folks.  Like I said, modest celebrations.

Why? Because that is what I want.  You personally might like a big party with lots of people, a big meal out, a nice trip or a grand party hosted at a hotel.  Any of those are fine.  The trick here is to know yourself and what you want and make that clear to the other people involved on what you will be doing.

It’s your retirement so celebrate it the way you want and don’t feel guilty for knowing what that is and being firm with other people around you.  There is no right way to celebrate a milestone, just instead your way.  So channel your inner dictator and feel free to tell others to piss off if you have to, but at least try to be nice about it to start with.

So how did you or would you celebrate your retirement?

The Master Retirement Plan

I talk a lot on this blog about my plans for retirement, but it occurs to me I usually discuss just parts of the plan and I rarely if ever tie all the parts together.  So I decided to spell it all out in a master plan post, which by the way may get a wee bit long.

Part 1 – Debts

My plan has always had one important part I almost never discuss anymore: we have no debt and don’t plan on getting any after I leave my day job.  So we paid off the mortgage back in 2012 and we pay off our credit card bill every month in full.  Yet this doesn’t mean I don’t have access to some debt if required.  For example, we kept a line of credit for $100,000 on the house.  Why?  Debt can be used for some additional flexibility to manage your cash flow.  For example, if we get a unexpected expense for $10,000 I could sell some investments to pay it off at once, but if the investments are making more than I can borrow the money for I would consider using debt to initially pay off the $10,000 and then slowly reduce the debt.  As interest rates increase this may not be a good idea, but flexibility is useful if nothing else.

Part 2 – Expenses

We have always had rather low expenses around $30k to $32k per year for the day to day costs.  This might seem low for a family of four to you but keep in mind we don’t have a mortgage payment and we have a very optimized spending towards what matters most to us.  Then on top of that we have had some odd one time expenses like our big trips to Hawaii (~$5k) or our month long tour of the Maritimes (~$8K).   I haven’t put money aside to fund all of those forever, but rather I built in a slush fund of money ($20k) to initially cover trips, car replacement costs and non-regular house maintenance items.

Part 3 – Work

So that last statement of not funding trips might seem odd until you realize for me that early retirement isn’t about leaving work forever, but rather the ability to choose work that I will enjoy and the hours I want (around half time or less).  My hobby of writing even manages to make me some money every once in a while.  So every dime of money I make post leaving my full time day will feed our slush fund.  Therefore if I want to travel more I know exactly what I will be working towards.

The other major part of this is my wife fully plans to keep running her daycare for the first five years.  She likes her job and doesn’t feel the need to quit so when she committed to that I added that to our plan which makes our withdrawals from our investments lower for the first five years.

Part 4 – Investments

Beyond having a paid for house we will have about $600,000 in investments (we also have another $75,000 we have in an RESP for our kids’ educations not included in that total).

The investments are basically in three main buckets:

  1. My Work Pension –  This is mainly concentrated in bonds and has really low fees, but I can’t access most of it until I turn 50. But I can unlock about 30% of this when I leave work and move it an RRSP (which I plan to do).
  2. The RRSPs – These accounts are setup to invest in Exchange Traded Funds (ETFs) which has low fees because they are index funds that mirror major stock indexes.  It’s called the Potato Portfolio and it takes me 15 minutes a year to manage.  So it has a low amount work to manage and provides a reasonable return and balances risk nicely.  We plan to use some of this money to make up the shortfall from the next bucket.
  3. TFSA and Taxable – These are the highest risk accounts because they invest directly in individual company stocks and an ETF for preferred shares.  Yet those companies are dividend paying ones so the plan here is to avoid selling the stocks to provide income and instead just use the dividends and distributions from the companies to fund our spending.

Part 5 – Cash Flows

So the fall out of our investing choices  and my wife’s plan to keep working are our cash flow plans for the next five years.  We expect my wife’s business to provide about $8000 a year of income to the house accounts while our dividends and distributions should provide another $9,500 per year.  So in total that is $17,500 which would be about 54% of our budget spending (assuming the $32k spending level).

Then on top of that I’ve saved an additional $16,000 in cash to initially fund our spending after I leave work.  So this should cover at least the first year year off combined with the above.

Then finally because our income will be so low, we will get a substantial increase to our Child Tax Benefit about 20 months after I leave work to the tune of roughly $12,000/year.  This won’t be for long but does mean our initial withdrawals from our investments will be minimal (ie: average of around 2% of the portfolio) for the first three to five years.  So the plan is basically don’t touch most of the investments and let them keep growing until I’m 45 or so.

Part 6 – Income Tax

With my day job, I currently make over $100,000 a year and I provide the majority of our current household income.  Of course, this means I pay a LOT of income tax.   Like over $22,000 in income tax last year.  So going forward that number should drop to less than $500 a year or if I do my planning right it should hover around $0.

How?  Simple, the basic deduction for each adult is around $11,600.  So between that for both my wife and I and the tax free income from our TFSAs we should be able to reduce our tax bill to almost zero and thereby removing my single biggest expense right now.

Part 7 – Withdrawal Methodology

Of having investments is nice, but most people want to know how do you turn them into income?  Well in my case, someone on the blog pointed me this source which I have decided to adopt for my method to take out funds (which I can’t seem to find the link for so when I do I will add it).  So the plan is to avoid selling the TFSA investments and only use the dividend and distribution income from those accounts.  Then we will sell our bonds first to fuel any additional income requirements up to a total of 4.5% of the overall investments in a given year (if you want to know why 4.5% rather than 4% read this).  Then as the stock part of the portfolio grows I will sell off the gains (when they exceed 20%) and buy back some bonds.  The point of this is to avoid selling your stock side of the portfolio when the market is down.

Of course, if our slush fund gets too big from any additional income I get from my hobbies then I would also break off a chunk and also buy some bonds.

Part 8 – Purpose

A number of retirees will fail to properly plan their time after they leave work and can end up bored without their day jobs.  So to combat this I’ve already considered what is more important to me and I have decided my primary purpose on leaving my day job will be writing.  I don’t have to make much money at it, but if I do that is nice.  I will also focus on supporting my kids in school to ensure they get any help they need and down the road helping out in organizations that I care about.

Part 9 – Hobbies

Beyond the obvious writing hobby I also expect to pursue these items which should leave me with the same problem I have now: not enough time to do it all.

Part 10 –  Back Up Plans

Of course like all things in life, it never really goes according to plan.  So that is why I insist on keeping several backup plans.  A few of them are:

  • Downsize the house and move the excess money into the investments (up to $75K).
  • I will likely get a decent size inheritance despite my plan has assumed a value of $0.
  • We will qualify for OAS and some CPP so I actually don’t need my money to last for 50 years, but rather until I turn 65 or so.  Then we can reduce the investment withdrawals if needed.
  • Finally, I can go back to full time work for a while if things are going REALLY bad.

So I think the covers the majority of the items about my plan, but if I have missed something do let me know and I’ll add it in.