Financial Independence Daily FI discussion thread - Friday, October 01, 2021 |
- Daily FI discussion thread - Friday, October 01, 2021
- Once you FI/REd did it get harder to do office politics and put up with other annoying minutia?
- Canadian FIRE: Considerations for those of us (mostly) North of the 49th parallel
- Weekly FI Frugal Friday thread - October 01, 2021
| Daily FI discussion thread - Friday, October 01, 2021 Posted: 01 Oct 2021 02:02 AM PDT Please use this thread to have discussions which you don't feel warrant a new post to the sub. While the Rules for posting questions on the basics of personal finance/investing topics are relaxed a little bit here, the rules against memes/spam/self-promotion/excessive rudeness/politics still apply! Have a look at the FAQ for this subreddit before posting to see if your question is frequently asked. Since this post does tend to get busy, consider sorting the comments by "new" (instead of "best" or "top") to see the newest posts. [link] [comments]  |
| Once you FI/REd did it get harder to do office politics and put up with other annoying minutia? Posted: 01 Oct 2021 02:10 PM PDT If I ever FIRE I'd like to keep working but it seems like it'd be really hard to find a job that wouldn't be annoying, if ya know what I mean. It seems like a lot of jobs/managers go with the "We can treat you poorly because we know you need the money/job line." But it'd be hard to motivate oneself to stay and work once you have the opportunity to FIRE.. I guess my question is-
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| Canadian FIRE: Considerations for those of us (mostly) North of the 49th parallel Posted: 01 Oct 2021 06:51 AM PDT Hi all, Canadian FIRE question: Has anyone here found any good write-ups on taking CPP/OAS early or late when planning to retire aggressively earlier than normal? I'm very curious about the ideas around including federal programs in FIRE planning, but more often than not, I see people exclude them from their calculation. All of this is just hypothetical discussion points and I don't advocate for either path. I'm not interested in milking the MOST money possible out of the system based on dying at age X. I'm just curious about strategies for FIRE planning and others' thoughts on the topic. Proposed options: Plan A) If you assume that you'll work at a maximum pensionable earnings level from 24 to 44 and will draw CPP and OAS as early as possible you may only get ~$15k/yr, or $30k/yr for a couple. Not bad, but maybe less than people would be able to live on comfortably, so they'd need some additional savings to top up the difference. Okay, we can plan for that. Plan B) If you assume that the same couple will delay their CPP/OAS until 70 they are entitled to ~$27k/yr, or $54k/yr for a couple. That's an income level that people may be able to live on fairly comfortably in their 70s and onwards without any additional income. Thoughts: Plan A) The supplemental income you'd receive from CPP/OAS would do a lot of the lifting for your portfolio in the future and it would likely drop a 4% SWR to a 2% (or whatever), so as long as you still had a half decent nest egg after 16 years of withdrawals you'd likely still be fine, with a portfolio well situated to grow significantly for the rest of your life at your now-lower SWR. You'd have more exposure to the markets in old age, but less exposure to possible changes to Canadian retirement program changes. Plan B) If theoretical people were to work for 20 years then retire at 44 (or whatever age) and plan to self-fund their retirement until 70, then be dependent on government programs for the remainder of their lives at a relatively comfortable level, that would alleviate effectively all sequence of return risks for a 4% rule SWR adherence since you'd only be covering your own costs for only 26 years (not 30) with a huge likelihood that you'd still have lots of the money you started with if not more, and any kind of longevity concerns should be covered by the fact that you've locked in a comfortable living after your 70th birthday regardless of how long you live or what happens to the markets after that. You'd have less exposure to the markets in old age, but more exposure to possible changes to Canadian retirement program changes. Assumptions: Personally, I don't think there's much of a realistic risk to the future of CPP/OAS. I regularly hear people worry about CPP/OAS in Canada because there's so much attention given to the health of Social Security in America, which is entirely different and not at all related to Canada's system. CPP is not paid out of general revenue like SS, it's funded by us, managed separately from government, and is forward calculated by actuaries every three years. At last check it was reported to be iron-clad looking forward for 75 years at the minimum. It's also being beefed up over the coming decade to be even better. OAS is a different situation, but considering most people depend on it for basic needs in retirement there's a near-zero chance that it could be messed with, politically speaking, considering the population will only continue to get older and therefore wouldn't tolerate having benefits they're counting on being cut. I could be wrong, but I doubt it. I'm inclined to believe the exact opposite will occur over the coming decades and federal retirement benefits will get more generous, not less. It just seems to be the trend lately. Questions for the group: Am I wrong about any of these ideas in a fundamental way? Considering the above, would you rather Plan A) or Plan B)? [link] [comments]  |
| Weekly FI Frugal Friday thread - October 01, 2021 Posted: 01 Oct 2021 02:00 AM PDT Please use this thread to discuss how amazingly cheap you are. How do you keep your costs low? How do become frugal without taking it to the extremes of frupidity? What costs have you realized could be cut from your life without pain? Use this weekly post to discuss Frugality in general. While the Rules for posting questions on the basics of personal finance/investing topics are more relaxed here, the rules against memes/spam/self-promotion/excessive rudeness/politics still apply! Since this post does tend to get busy, consider sorting the comments by "new" (instead of "best" or "top") to see the newest posts. [link] [comments]  |
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