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Subject:  Re: My Plan Date:  10/27/2001  8:30 AM
Author:  jbrains Number:  22 of 35

I have run the numbers again with a withdrawal rate of $25k/year. I don't think it'll be that high, but it could be, so I did. In that case:

* If I can get 7.5% on my RRSP starting in 2010,
* and if inflation averages 3%/year starting now,
* and if I work the next 5 years, maxing out my RRSP,
* and if I contribute $3600/year adjusted for inflation starting 2008

then if I stop contributing at age 58 and start withdrawing at age 59, the money lasts until I'm 71. Surely I'll be dead by then. The withdrawals are $25k/year, inflation-adjusted.

One thing I have read around here is that we're heading towards a deflationary economy. I don't know whether that's true; if it were, who knows for how long? This could only help my plans by making the dollars have more future value.

I can see myself making the $30k-$40k/year it would take to be able to cover expenses and contribute to my RRSP, long after I've decided I don't want to work in a high-pressure, high-paying job.

And, of course, if I enjoy highly-paid employment enough to continue doing it, the numbers only go up. By saying "5 years out of 10," I allow for the possibility that, as a contractor in the software development business, I might not find work for up to a year at a time for the next few years. I'm OK with that. Worst case, I can crawl back to a full-time position somewhere for a finite period of time. Say, 3 years.

So, please, poke more holes.

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