The five factors of retirement for Canadians – MoneySense

Spoiler alert: If you like a bit of suspense, read Fritz’s original blog post before proceeding. For those who want the quick-and-dirty reveal, if you’ve not already guessed, it’s your age. 

Or, as Fritz wrote: “For once in your life, age has nothing to do with this decision. Unlike with driving, voting and drinking, there are no legal constraints on when you can choose to retire. As long as you can check the boxes on the important factors listed earlier, you can choose to retire regardless of your age.” (Here in the column, the factors are posed as questions, instead of checkboxes.)

Speaking of age… at 70, I’m the oldest of us three bloggers, and Seed is the youngest. All three of us (that is, Gilbert, Seed and myself) are technically still working and probably consider ourselves semi-retired. 

I, too, wrote a book about this, called Victory Lap Retirement (Milner, 2019), co-authored with former corporate banker Mike Drak. All three of us, and Drak too, emphasize “financial independence” over classical traditional “full-stop retirement.” 

As most of my readers know by now, my contraction for “financial independence” is “Findependence,” which shows up in my financial novel Findependence Day (Trafford Publishing, 2013), as well as my website. The basic philosophy is to work because you enjoy it, not because you need the money. Or, as financial planner Doug Dahmer nicely phrases it in a 2019 Retired Money column of mine, “Work Optional.”

FI, not RE

Some younger financial bloggers prefer the term FIRE, which stands for: Financial Independence, Retire Early. Although, increasingly, I see the emphasis on FI, rather than on retiring early. 

Some FIRE bloggers talk about “retiring” in their early 30s, which I think is way too young. However, look closely and you’ll see most FIRE bloggers really are referring to quitting the salaried, bossed-around 9-to-5 corporate grind. And instead, they build a self-employed life that may include blogging (paid for by advertising, affiliate links, etc.), book deals, paid public speaking events and/or media appearances and more. 

Yes, money’s still a biggie

Let me close with some final thoughts on these five “factors.” Apart from age, money has to be the dominant one, which is why Gilbert listed it first. Seed’s blog post goes into considerable depth on money, using charts to examine sequence-of-returns risk and the various “buckets” into which one should divide one’s funds. In essence, there are three buckets: Cash savings for emergencies, income from dividend-paying stocks, and equity income from exchange-traded funds (ETFs).

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