The five factors of retirement for Canadians

Spoiler alert: In the event you like a little bit of suspense, learn Fritz’s authentic weblog publish earlier than continuing. For many who need the quick-and-dirty reveal, for those who’ve not already guessed, it’s your age. 

Or, as Fritz wrote: “For as soon as in your life, age has nothing to do with this choice. Not like with driving, voting and consuming, there are not any authorized constraints on when you’ll be able to select to retire. So long as you’ll be able to test the packing containers on the essential components listed earlier, you’ll be able to select to retire no matter your age.” (Right here within the column, the components are posed as questions, as an alternative of checkboxes.)

Talking of age… at 70, I’m the oldest of us three bloggers, and Seed is the youngest. All three of us (that’s, Gilbert, Seed and myself) are technically nonetheless working and doubtless contemplate ourselves semi-retired. 

I, too, wrote a guide about this, known as Victory Lap Retirement (Milner, 2019), co-authored with former company banker Mike Drak. All three of us, and Drak too, emphasize “monetary independence” over classical conventional “full-stop retirement.” 

As most of my readers know by now, my contraction for “monetary independence” is “Findependence,” which exhibits up in my monetary novel Findependence Day (Trafford Publishing, 2013), in addition to my web site. The essential philosophy is to work since you take pleasure in it, not since you want the cash. Or, as monetary planner Doug Dahmer properly phrases it in a 2019 Retired Cash column of mine, “Work Non-obligatory.”

FI, not RE

Some youthful monetary bloggers desire the time period FIRE, which stands for: Monetary Independence, Retire Early. Though, more and more, I see the emphasis on FI, slightly than on retiring early. 

Some FIRE bloggers speak about “retiring” of their early 30s, which I feel is approach too younger. Nonetheless, look intently and also you’ll see most FIRE bloggers actually are referring to quitting the salaried, bossed-around 9-to-5 company grind. And as an alternative, they construct a self-employed life which will embody running a blog (paid for by promoting, affiliate hyperlinks, and so on.), guide offers, paid public talking occasions and/or media appearances and extra. 

Sure, cash’s nonetheless a biggie

Let me shut with some last ideas on these 5 “components.” Other than age, cash must be the dominant one, which is why Gilbert listed it first. Seed’s weblog publish goes into appreciable depth on cash, utilizing charts to look at sequence-of-returns danger and the assorted “buckets” into which one ought to divide one’s funds. In essence, there are three buckets: Money financial savings for emergencies, earnings from dividend-paying shares, and fairness earnings from exchange-traded funds (ETFs).