A Man With A Plan

RETIREMENT. The end goal for most working folk. Whether you’re nearing your 60’s or just starting out in your career, retirement is an essential part of your financial plan. When can I retire? A question most only ask themselves when they are a ways into their working careers but it is a question I attempted to answer right from the start. Knowing when to retire is quite a simple calculation.

There are only 2 things you must consider in determining when you can permanently leave the work force.

  1. How much money will you need (monthly) in order to comfortably live the lifestyle that you choose in retirement.
  2. The date of your death.

All joking aside, all that you really need to determine in calculating when you can comfortably retire is your expected monthly expenses during retirement. If you know this figure (and ballpark is okay) you can begin to plan for retirement.

MY PLAN: Build enough wealth during my working years so that I can withdraw $24,000 per year ($2,000 per month) for expenses without depleting my capital. I plan to accomplish this by continuing to live a minimalist lifestyle and keeping expenditure extremely low in order to allow my investment contributions to be extremely high. When I satisfy my goal I will retire.

In dollars and cents: the wealth that I will need to build in order to withdraw $24,000 per year at a safe withdraw rate (meaning that the withdrawal amount can be expected to replenish by earned interest) of 4% is in the neighbourhood of $600,000. Thankfully since I am planning my retirement so far in advance I have time and, consequently, compounding interest on my side.

I will have more on retirement and the safe withdrawal rate method that I am choosing to deploy in my retirement efforts. Hope any and all readers of my blog have a wonderful weekend.

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Author: maxyourminimalism

Hello, I'm Andy, a mid 20's low wage worker from Ontario Canada looking to share my progress as I embark on my personal finance journey and attempt to meet my financial goals through the practice of minimalism. This blog is not an attempt at converting people to the same lifestyle choices as me, but instead to document and share my progress as a low income earner striving for financial independence. Sit back, relax and enjoy reading about my life as it progresses and I attempt to maximize reaching my financial goals through minimalism.

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