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The 5 components of retirement for Canadians


Spoiler alert: In case you like a little bit of suspense, learn Fritz’s unique weblog publish earlier than continuing. For many who need the quick-and-dirty reveal, if you happen to’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. In contrast to with driving, voting and ingesting, there aren’t any authorized constraints on when you may select to retire. So long as you may test the containers on the necessary components listed earlier, you may select to retire no matter your age.” (Right here within the column, the components are posed as questions, as a substitute 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 take into account ourselves semi-retired. 

I, too, wrote a e book about this, referred to 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 reveals up in my monetary novel Findependence Day (Trafford Publishing, 2013), in addition to my web site. The fundamental philosophy is to work since you get pleasure from 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 Elective.”

FI, not RE

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

Some FIRE bloggers discuss “retiring” of their early 30s, which I believe is method 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 a substitute, they construct a self-employed life which will embody running a blog (paid for by promoting, affiliate hyperlinks, and so on.), e book offers, paid public talking occasions and/or media appearances and extra. 

Sure, cash’s nonetheless a biggie

Let me shut with some closing ideas on these 5 “components.” Aside from age, cash needs to 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 threat 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).

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