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|Subject: My Plan||Date: 10/22/2001 12:21 PM|
|Author: jbrains||Number: 19 of 35|
Let's get this board running! I want suggestions and criticisms of my early-retirement plans!
I don't have the hard data here, because I am currently at work, but here is an introduction...
I am 27 years old, I have been working full time since 1998. My goal is FI (in the "Your Money or Your Life" sense) as soon as humanly possible. Although I like what I do for paid employment, I also like doing it for reasons other than being paid. I develop software.
I have maxed out my RRSP in 1999, 2000 and 2001. I purchase stock in my current company at a discount. I have been burned by a boiler-room pump-and-dump for about $5k and learned my lesson. I invest very lightly in KO, BFLY and tried to get NT at the right time -- that was at about $65/share. Poor me.
My current living expenses, including comforts but not luxuries, reaches the neighborhood of $30k/year. Since I like maxing out my RRSP, it appears that I need about $41k/year after-tax income to be comfortable and save for retirement.
My present income is about $65-70k after taxes, thanks mainly to my RRSP contributions. This leaves me about $20-25k/year in savings to either spend on emergencies or invest outside my RRSP.
According to my present calculations, if...
* by 2005 my RRSP gains an average of 7.5%/year for 25 years (At present: 3.5% at ING Direct.)
* I max out the RRSP five more times
* I contribute $2k/year (2001 dollars) the years I don't max out
* Inflation averages 3% per year
then by 2030, when I'm 56, I'll be able to withdraw about the equivalent of $15k/year in 2001 dollars for 15-20 years. I am fat and don't exercise much, so I don't envision reaching 80 or 90 years of age at this rate. :)
So my overall plan is to work like a dog for about another five years (out of the next ten), get paid as much as I possibly can, then start looking for creative ways to find just enough employment income to take care of my expenses and put a little something more into my RRSP. Contributing the equivalent of $2k/year should not be difficult, even if that actually means $7k/year in 2025 dollars.
I have the numbers somewhere. I'm interested in getting advice and seeing criticisms, especially things like, "Well what about paying for X, genius?!" I want to know if I'm missing anything basic.
I'll post the numbers when I get home.
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