Author Topic: Can we do this?  (Read 1744 times)

Bolshevik Artizan

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Can we do this?
« on: January 15, 2015, 06:40:21 PM »
Hi all

First ever post. Going to offer some stats then take yr opinion on whether or not our dream is doable. I am 45 wife is 38. Joint income is 285000 CAD and we save approx 75000 pa after tax, mainly because we rent a big place inToronto to accommodate wife's parents who are old and unwell. They live with us rent and cost free.

We have CAD 400000 in cash and CAD 1 million in home equity in the UK where we own 2 properties. Retirement schemes are worth around another 700 000 between us.

The plan/dream?

We move out West someplace cheaper buy a house and put about $100 000 more in savings. I give up my job and follow my passion which will pay next to nothing or nothing, ever. Wife keeps working for another 12 years (I have worked a job I don't much like to put it mildly for 23 years) which will earn us $75000 pa before tax. Maybe $4000 a month after tax.

Outgoings are basics $2000 month for us plus 3 yr old son, property tax of $ 300/month and education savings of $500/month for son.

In twelve years time we would plan to open a children's play cafe (where we want to go in Western Canada has a high proportion of families with children) and earn enough to live off until we start using our retirement savings to live off around 10 years after that.

Questions:

Have we saved enough or should I stay on the treadmill a few more years?
Should we be concerned about care costs for my wife's folks who are now elderly UK citizens living in Canada and so don't qualify for state healthcare?

I would really appreciate comments and advice, especially from Mustachians who have similar backgrounds and have made the leap!

Thanks

Bolshevik Artizan

mozar

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Re: Can we do this?
« Reply #1 on: January 15, 2015, 07:20:51 PM »
Whose home equity is it in the UK? Are you going to sell it? If so, yes you can retire. But with only 400k CAD in cash won't give you enough of a withdrawal to live on. Why is it in cash and not investments? Are you able to access your retirement schemes before 65?

Did your parents work during their lifetime? At least in the USA if you are eligible to receive social security you can receive it in any country. Doesn't the UK have an old age pension that you can you use to care for them?

Bolshevik Artizan

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Re: Can we do this?
« Reply #2 on: January 15, 2015, 09:11:02 PM »
Thanks Mozar...

It's my home equity in the UK and yes we intend to sell it, though as a number of people on this forum have pointed out, things in Canada, especially housing, are not cheap: I expect a decent 3/4 bed with a bit of land in our target area to go for around 750K plus closing costs, or around 825 K, leaving a further 175 to add to our 400 which is currently invested at an after-tax yield of around5-6%.

We can access our retirement savings before 65 but I would prefer to leave them. So I guess we are talking about an investment pot of around 550K Canadian giving a yield of between 25 and 30K and a realistic withdrawal of 15-20K, plus an after-tax income from my wife of around 48K - maybe 60-65K Canadian after tax and depreciation all in.

My parents in law worked manual jobs for fifty years, bless them, and have full social security and some savings. But even that will basically cover your food and not much else up here - around $300-$350 per week. But they are frugal. It's more healthcare bills that worry me - they have $100,000 of insurance and that's it.

Thank you for making me think of these details: it looks as though at the moment, things would be feasible but tight. Might be better to wait another year or two and get the pot up to around 625-700K.

Hasta la victoria siempre -

Bolshevik Artizan