Author Topic: early retire?  (Read 4820 times)

thriftyc

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early retire?
« on: September 22, 2015, 06:09:54 PM »
Here is the situation.

Age 42, wife 44 
3 kids 8,10,12

Average spending is $2700/month  (does not include big one offs like a replacement furnace etc, but most stuff in my house is fairly new)

I got laid off and get to collect unemployment insurance for the next 10 months total of 20k....  I don't know if I can even go to work again (mentally drained)

We have about 1MM net worth
300k house
720k invested indexes (all funds are accessible)

My wife (who stayed home previously) is just starting back in the work force and could earn 15-25k year at least. Part-full time.

Should I retire?  (that said I would try to make some income online, no guarantee though)

seattlecyclone

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Re: early retire?
« Reply #1 on: September 22, 2015, 06:26:38 PM »
Your investments are enough to provide $2,400/month at a 4% withdrawal rate. That's less than your spending so I don't think you could really call yourself FI yet. Your wife's part time work should be plenty to cover the gap, but how would she feel about you considering yourself retired while she's still working to put food on the table? If you got a part-time job as well you could save quite a bit and truly get both of yourselves to FI. Maybe take a month or two to recharge and see if you can bring yourself to apply for some jobs then.

Cathy

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Re: early retire?
« Reply #2 on: September 22, 2015, 06:40:29 PM »
I'd consider this pretty safe. All the OP has to do is develop a single additional source of passive income some time in the next 10 years or so. For example, he could write a few books that bring in $10,000 per year and then he's set. Or he could shave a bit of spending off his budget. Plus there's Canada Pension Plan and Old Age Security later in life. If OP doesn't want to go back to wage slavery, he probably doesn't have to.

EscapeVelocity2020

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Re: early retire?
« Reply #3 on: September 22, 2015, 06:48:14 PM »
Interesting situation.  You certainly have FU money, so don't feel pressured to return to slavery right away.  On the other hand, when unemployment runs out -I have no idea of your stance on paying for kid's college, medical insurance, or viability of changing career / being an entrepreneur... 

You mention starting online income - realize right away that it's a lot different than having an employer with defined benefits.  Sometimes I think it is overly glamorized, which JD Roth and MMM can do because already 'won the lotto' with their websites.  Not so much for the guys and gals that 'come in second'.  And even for the winners, it took time and hard work before they hit critical mass.  You have to be willing to put in years of effort making less than minimum wage...  The only immediate upside is that  it also helps keeps your expenses lower, since you are focused on a goal as opposed to looking for something 'fun to fill the time'.  Blogging is addictive, especially when things go your way, but money doesn't immediately follow like other mainstream 'jobs'.  There is no 'commission' for a big sale, just the hope for a steady build as long as you can maintain momentum.

Hope some of that helped, I'm excited to hear your journey and decisions and participate where I can help out.  I might get laid off this year or next too.

lostamonkey

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Re: early retire?
« Reply #4 on: September 22, 2015, 06:52:23 PM »
Another thing to consider is that you will get $1,228/month in CCTB benefits and $180/month in UCCB benefits if you and your wife have $15K worth of income (assuming some dividends, RRSP withdrawls, etc).

okits

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Re: early retire?
« Reply #5 on: September 22, 2015, 06:52:50 PM »
You certainly seem within spitting distance. Does the EI require you to be job hunting to collect?  I'd suggest a gap year and see how you feel after. With the EI cheques rolling in and your wife's job you're still covering costs, and then some.

Just seems like you've been tired and burnt out for a while.  Things may be clearer if you take some time to rest and detox.

Cathy

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Re: early retire?
« Reply #6 on: September 22, 2015, 06:53:08 PM »
...Sometimes I think it is overly glamorized, which JD Roth and MMM can do because already 'won the lotto' with their websites....

It's difficult to develop a website that earns, say, $500,000 per year. However, the OP doesn't need anywhere near that in order to make his retirement ridiculously safe. He also has a very time period of time (at least a decade) in which to develop the small business. I think 10 years should be long enough for almost anybody to devise at least one marginally successful online business.

thriftyc

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Re: early retire?
« Reply #7 on: September 22, 2015, 07:11:34 PM »
Another thing to consider is that you will get $1,228/month in CCTB benefits and $180/month in UCCB benefits if you and your wife have $15K worth of income (assuming some dividends, RRSP withdrawls, etc).

Yes, that is a significant factor. At least while the kids are 18/under.

lostamonkey

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Re: early retire?
« Reply #8 on: September 22, 2015, 07:28:06 PM »
Another thing to consider is that you will get $1,228/month in CCTB benefits and $180/month in UCCB benefits if you and your wife have $15K worth of income (assuming some dividends, RRSP withdrawls, etc).

Yes, that is a significant factor. At least while the kids are 18/under.

You also have CPP, OAS and maybe GIS when you get older. Socialist Canada is really working in your favour.

thriftyc

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Re: early retire?
« Reply #9 on: September 22, 2015, 07:32:06 PM »
I used to be against socialism in Canada - starting to change my mindset on that...

Another option I was thinking about was going back to school and retraining in a completely different and more enjoyable field.  I wonder if I am too old for that in terms of competing for a job in the new field when I finish school.

thriftyc

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Re: early retire?
« Reply #10 on: September 22, 2015, 07:52:26 PM »
Your investments are enough to provide $2,400/month at a 4% withdrawal rate. That's less than your spending so I don't think you could really call yourself FI yet. Your wife's part time work should be plenty to cover the gap, but how would she feel about you considering yourself retired while she's still working to put food on the table? If you got a part-time job as well you could save quite a bit and truly get both of yourselves to FI. Maybe take a month or two to recharge and see if you can bring yourself to apply for some jobs then.

Well, I have worked while she stayed home all this time thus far.  I think she would be okay with it.  She wants to get out in the workforce actually.  We have the large stash to draw from at any time if her income does not cover us. As long as we stay under a 4% WR I am ok with that.

Cathy

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Re: early retire?
« Reply #11 on: September 22, 2015, 08:13:54 PM »
I got laid off and get to collect unemployment insurance for the next 10 months total of 20k....  I don't know if I can even go to work again (mentally drained)

Note that a claimant is not entitled to collect employment insurance benefits unless he is "capable of and available for work and unable to obtain suitable employment". Employment Insurance Act, SC 1996, c 23, 18(1)(a). The Service Canada website rewords this to "ready, willing, and capable of working each day". The website is not the law, but you may find it helpful, so I link to it nonetheless.

EscapeVelocity2020

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Re: early retire?
« Reply #12 on: September 22, 2015, 09:27:42 PM »
...Sometimes I think it is overly glamorized, which JD Roth and MMM can do because already 'won the lotto' with their websites....

It's difficult to develop a website that earns, say, $500,000 per year. ...

It's just not dependable that you will 'replace your income' with an online pursuit, as the uninitiated may think.  Some few folks go on to bigger and better (without acknowledging that they survived a really brutal gauntlet), but the many are lucky to hit somewhere around minimum wage for doing something they enjoy.  They just work really hard, because they love it, and make it look glamorous.  That should be your benchmark, and any upside is gravy, is what I was trying to say.

thriftyc

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Re: early retire?
« Reply #13 on: September 26, 2015, 04:52:17 PM »
I got laid off and get to collect unemployment insurance for the next 10 months total of 20k....  I don't know if I can even go to work again (mentally drained)

Note that a claimant is not entitled to collect employment insurance benefits unless he is "capable of and available for work and unable to obtain suitable employment". Employment Insurance Act, SC 1996, c 23, 18(1)(a). The Service Canada website rewords this to "ready, willing, and capable of working each day". The website is not the law, but you may find it helpful, so I link to it nonetheless.

The EI is a minor factor in my decision to retire early to be honest - its just a bonus.