If you could retire early - what would you do
- Thread starter havingfun
- Start date
$100,000 doesn't go all that far when you've got 24/7 to spend it. Your standards kind of slide up...bigger house, more/better cars, vacation/vacation homes, whatever.
Retire:no
work less:maybe
Retire:no
work less:maybe
If you can't retire, assuming you are relatively debt free, on $100K per year, you have some serious spending issues. By my calculations, after you pay your taxes, take care of all of your basic living expenses, and I mean food, clothing, housing, car, and two vacations per year (week long), you should still have $20K - $30K to enjoy and live off of. I know some people that live off of that alone, and enjoy life, let alone have that left over after all is said and done. If you have a good financial advisor, this would be even easier. I can't believe that people don't think $100K before taxes would be enough. What do you think the average family is retiring with nowadays? Nowhere near that, in fact, nowhere near half of that in most cases. Geez.
What's important
I'd dive, golf, hobby, golf, dive (repeat) until I got board, then I'd go teach economics at some small school and meet nice smart girls that thought I was "worldly" or some s*it like that. Summers off and the same lectures 3 days a week - how hard would that be.
Not that I’ve thought about it…..
OTB
I'd dive, golf, hobby, golf, dive (repeat) until I got board, then I'd go teach economics at some small school and meet nice smart girls that thought I was "worldly" or some s*it like that. Summers off and the same lectures 3 days a week - how hard would that be.
Not that I’ve thought about it…..
OTB
I would own a brewery.
Simple - I know where to go for a cool one - and chicks just might dig me.
No really...I mean it...stop laughing!!!!!
Simple - I know where to go for a cool one - and chicks just might dig me.
No really...I mean it...stop laughing!!!!!
$100,000
That's not really so much.
Many people owe at least that on their house. If you own a home in the GTA, especially in Toronto, a $100,000 windfall may not even pay off the mortgage let alone let you retire.
However, let's assume you already own your home and can expect to earn $100,000 a year for the next thirty or forty years. Here are some numbers that don't make me want to quit my job...
You'll look good, feel good, have a nice car and home, but have almost nothing left to spend on extras like travel, dating, clubbing or alcohol.
One date with a woman (if that's what you're into) could easily use up most of your budget (or break it if you like to date in style). What if you wanted to drop a few dollars at an SC or (god forbid) take a trip....where would you get the cash?
And all this is assuming that you are single with no dependents. How does this fit into your life if there are kids to put through University or a wife to support (or, gasp, alimony!)?
You also have to consider that the buying power of your dollar will drop each year while your "fixed" income will remain the same. Things will get tighter every year...and I'm not talking about your girlfriends.
Sure it's possible to retire on $100,000 a year but given the increasing cost of living, I wouldn't try it. If I was lucky enough to inherit a steady income like that I'd probably cut back to part-time hours but I'd still want to have some additional cash coming in.
Pyro.
That's not really so much.
Many people owe at least that on their house. If you own a home in the GTA, especially in Toronto, a $100,000 windfall may not even pay off the mortgage let alone let you retire.
However, let's assume you already own your home and can expect to earn $100,000 a year for the next thirty or forty years. Here are some numbers that don't make me want to quit my job...
- Taxes. If you're grossing $100K on investment income, and you really don't have to work for it, then you don't have too much in the way of deductions. You'll lose at least $40K to the tax man up-front.
- Car. I want a nice one. That means spending at least $50K every five years. You may get a few grand back when you trade in your older car but then just factor in five years of insurance and maintenance and your trade-in value is cancelled (or worse). That's at least $10,000 a year.
- More taxes. So you own your Toronto home...that'll cost your at least $3,500 a year in municipal tax (don't forget insurance).
- Do you want to keep your home? If so, expect a minimum of $3,500 a year in maintenance, repair, and up-keep.
- Do you want to live in your home? If so, utilities (heat, air, water, gas, etc) will cost you another $3,000 a year. If you want luxuries like cable and phone (and of course internet access) then expect to pay another $2,000 a year. remember, you're retired so you want the good TV channels and you'll be phoning long distance to speak to all your friends on vacation.
- Stuff is nice. You'll want to pick up at least one big-ticket item a year. A new couch, a new TV, entertainment system, computer, set of golf clubs, bicycle, furniture, barbecue...I could go on. You really do have to budget at least $4,000 a year for items of this sort.
- Clothes. You will want to have good clothes to travel and party in as you are now a man of leisure. If you are a woman, the game is over...there's no way you can afford the clothes. But even for men, a nice leather jacket every so often, a coat, some boots, a couple of pairs of shoes, maybe some shirts that actually fit you and a couple of suits now and then that don't look like they came from the GoodWill...You better reserve (at a minimum) another $4,000 a year for that.
- Food. Let's face it, we all have to eat sometime. $100 a week in groceries is not much at all. You'll probably want to eat out at least twice a week..that'll be another $100 (if you go alone) right there. With fifty-two weeks in the year, that's another $10,000 you need to spend every year.
- I only go to the movies about once a month (if I'm lucky) but if I was retired, I'd probably want to go once a week. Assuming I go alone, that's still $30 a trip after you count the ticket, popcorn, a pop, and parking. If you go every week that will come out to another yearly cost of over $1,000 just for the cinema.
- Maybe movies are a throw away expense but what about your health. OHIP will pay for the doctor, but what about the dentist, optometrist, glasses/contacts, and such. Remember, as you grow older, you'll need to spend a little more on these things. Again, $2,000 a year is not that much.
You'll look good, feel good, have a nice car and home, but have almost nothing left to spend on extras like travel, dating, clubbing or alcohol.
One date with a woman (if that's what you're into) could easily use up most of your budget (or break it if you like to date in style). What if you wanted to drop a few dollars at an SC or (god forbid) take a trip....where would you get the cash?
And all this is assuming that you are single with no dependents. How does this fit into your life if there are kids to put through University or a wife to support (or, gasp, alimony!)?
You also have to consider that the buying power of your dollar will drop each year while your "fixed" income will remain the same. Things will get tighter every year...and I'm not talking about your girlfriends.
Sure it's possible to retire on $100,000 a year but given the increasing cost of living, I wouldn't try it. If I was lucky enough to inherit a steady income like that I'd probably cut back to part-time hours but I'd still want to have some additional cash coming in.
Pyro.
Pyro,
Your numbers aren't too bad, but with the right advisor, I think your tax bill could be cut by about $15,000 very easily, I do it every day for my clients. That would boost your free cash to over $30,000 easily. The one point you really hit the nail on the head with is how inflation will affect this income, but if it were investment income, a good advisor will try to invest such that the over that 30 - 40 yr. time frame money would be invested for growth in order to beat inflation. I'm not going to go into a long diatribe on how stocks have been the only investment over the long term that have beaten inflation, but rest assured, over the last 200+ years of market history, they have.
As for tax savings, there are tax shelters that can help to reduce the tax grab, not to mention deriving income from more tax preferred sources such as dividends and capital gains(yes there have been many capital gains, even over the last 3 years).
Other than the rest of your numbers Pyro, I think that they may be slightly inflated for Toronto numbers, moving and downsizing to the country, or not buying that much in clothes, but that's just semantics, and if that makes your life more fun in retirement, as an advisor, I wouldn't take that away from you at all. I'd encourage it, so long as you understand the consequences. Retirement and planning has as much to do about emotions as it does about the numbers. Selfishly, though, I let my clients take care of some of the emotional, then I take care of the numbers and a bit of the emotions. But I don't think that retiring on $100K would be difficult in the least, and with about $25K - $30K left as purely disposable income, which if done properly would be easily done, retirement would be very sweet if you ask me.
But, as I did say before, as you said you would do, Pyro, I would continue to work, but more so because I want to, not because I had to.
Your numbers aren't too bad, but with the right advisor, I think your tax bill could be cut by about $15,000 very easily, I do it every day for my clients. That would boost your free cash to over $30,000 easily. The one point you really hit the nail on the head with is how inflation will affect this income, but if it were investment income, a good advisor will try to invest such that the over that 30 - 40 yr. time frame money would be invested for growth in order to beat inflation. I'm not going to go into a long diatribe on how stocks have been the only investment over the long term that have beaten inflation, but rest assured, over the last 200+ years of market history, they have.
As for tax savings, there are tax shelters that can help to reduce the tax grab, not to mention deriving income from more tax preferred sources such as dividends and capital gains(yes there have been many capital gains, even over the last 3 years).
Other than the rest of your numbers Pyro, I think that they may be slightly inflated for Toronto numbers, moving and downsizing to the country, or not buying that much in clothes, but that's just semantics, and if that makes your life more fun in retirement, as an advisor, I wouldn't take that away from you at all. I'd encourage it, so long as you understand the consequences. Retirement and planning has as much to do about emotions as it does about the numbers. Selfishly, though, I let my clients take care of some of the emotional, then I take care of the numbers and a bit of the emotions. But I don't think that retiring on $100K would be difficult in the least, and with about $25K - $30K left as purely disposable income, which if done properly would be easily done, retirement would be very sweet if you ask me.
But, as I did say before, as you said you would do, Pyro, I would continue to work, but more so because I want to, not because I had to.
100K is not a lot only if you wanna have kids, because you'd want to educate and raise them in Canada.
If not for the kids, you can simply split ALL your time between Cuba (rum, cigars and women) and Jamaika (Hedonism - cheap coke and pot and free drinks and women). Live like a king and fuck the cars, speeding tickets, gas prices, cold Canadian weather and, more importantly, taxes - FOREVER!
If not for the kids, you can simply split ALL your time between Cuba (rum, cigars and women) and Jamaika (Hedonism - cheap coke and pot and free drinks and women). Live like a king and fuck the cars, speeding tickets, gas prices, cold Canadian weather and, more importantly, taxes - FOREVER!
For the guys that keep saying that this is not alot of money...you keep working and I'll take that money and enjoy it.
Sore sports that have no imagination...I like this thread.
Sore sports that have no imagination...I like this thread.
This thread is about as great as masturbation...it is great if you have an imagination, but you've gotta remember this is not real...TimeofYourLife said:
As for guys who want to keep working..., well if you'd rather be sitting in traffic in your mighty M5 with an important look on your face than sitting on the beach with Margarita and chicas...to each his own I guess...I'd rather my wardrobe was full of linen than of wool, but hey, it's me.
A $50,000 car every five years? Hardly a necessity. If someone wanted to make $100,000 a year work for them, it wouldn't be that difficult. You just adjust your lifestyle accordingly. It comes down to weighing the things you want against whether or not you want to have to keep working. When I retire to the tropics I won't need much cash.
DW
DW
DenWa said:
DW
....some members of the board make way more than that, but it's all relative to what you are accustom to.
....you don't necessarily need money to make yourself happy....it's just a means to an end
...also it doesn't hurt to have the 'bling bling'
If I knew I could have a hundred grand USD a year for the rest of my life I'd quit my job today.
DW
DW
Spend my whole day on TERB. Or maybe startup a board where I could try and get those of similar ilk to "recruit" cut-rate talent; a CO-OP sort of thing. Seriously I would start a charity for wayward girls.havingfun said:
Having $100,000 a year to spend is the same as working for $180,000 or $190,000 and paying Canadian taxes . Most people , should be able to adjust their lifestyle to that - Shiek , Adrianne Clarkson and the former Privacy Commisioner being the exceptions , of course .
Are you sure?
Pyro.
How do you know that "Sheik" isn't Adrianne Clarkson in real life (or George Radwanski)?train said:
Pyro.
