Any help would be appreciated. I will include some info only relevant to the Canadian tax system, so feel free to disregard if you're not familiar with it.
We are a Canadian couple, ages 32, and 28, with no children, currently living in British Columbia.
We have 600,000 in investments, no debt, and no other assets. Approximately 150,000 in our RRSPs, 100,000 in TFSAs and 350,000 in our joint taxable account. We are 100% in equity ETFs, specifically 80% in XAW (MSCI All-Country World Index Ex- Canada) and 20% in VCN (Canada Total stock market), which we have in the taxable account since Canadian dividends are taxed favourably. We have no other income.
We intend to live a very low cost lifestyle by continuously traveling abroad, staying in low cost countries and doing work exchanges for free food and shelter, such as Workaway.info or WWOOF. By not staying too long in any one country and not working for money, we will remain tax residents of Canada, which we think is favourable with low income. We will not have any property other than what's in our backpacks. We will keep travel costs very low by moving slowly and in small steps by bus or train.
Our withdrawal strategy is as follows:
We will have a mix between a variable withdrawal strategy at 4%, and a constant withdrawal strategy at 2%. How it will work is we will become comfortable living at 2% of our initial portfolio value; all of our essential expenses will be covered by this. At 600,000 this would be 12,000. Once we are comfortable with this, we can apply the variable withdrawal strategy at 4%, which applies a 4% spending rate to the portfolio value each year, but anything beyond 12,000 will be entirely discretionary expenses and we likely won't use it all. These might seem like very conservative spending rates but we want our money to grow so we have more when we are older or have children.
We have been logging every expense in our spreadsheet for years and we have a really good grasp on where our money goes and our habits. We have a running spending average and compare it to our total portfolio value daily.
The taxes will be entirely under our control. In Canada, everyone has 12,069 of income as of 2019, indexed to inflation, that they can earn tax free (Basic Personal Amount). Anything that we withdraw from our RRSP is taxable so we would withdraw from that first. The strategy is, every December we will withdraw 24,138 from our RRSPs, indexed to inflation. We will calculate what we are entitled to spend the next year, and reinvest the rest into our taxable account, until our RRSPs are depleted, tax-free. This strategy works for us because we want to spend very little in the first years of retirement and gradually increase it as we age.
We will have health insurance for outside North America. For those who don't know, the rest of the world is way cheaper than North America for healthcare, often providing superior service. We can get a decent insurance plan for around $2000/year. (IMG Global)
We don't have any specific questions. We have done a lot of research and think we have a good plan, but we are open to any criticism as we want to improve as much as possible.
Thank you!
Matt and Sylwia