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Discussion Starter · #181 ·
Hmm, yeah, I'm not sure. Kind of hard to do an apples to apple comparison without doing a deeper dive.

I'm assuming your rent covers a lot of the expenses I have to deal with: property tax, repairs, major appliance (but not furniture) replacement, etc. As mentioned, I think we're lucky to get a lot of the repairs done fairly inexpensively. We're always replacing 1 or 2 of appliances or pieces of furniture every year. Including property taxes, that takes us to just over $10k last year which is about half your rent (?). Everything else is consumables (household stuff) and monthly bills where everyone just has to manage their usage, right-size their plans, or try to find a better deal I suppose.
 

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Hmm, yeah, I'm not sure. Kind of hard to do an apples to apple comparison without doing a deeper dive.
Yeah, hard to really compare these, especially when home ownership is so different from a rental. You're right, my rent covers property taxes & most repairs.

It sounds like you're keeping the cost of repairs at a reasonable level. Having a friend who can help with repairs is a huge advantage... you're probably saving a ton of money that way.
 

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I've often found housing, transportation and food/groceries are the biggest expenses = the "big 3".

Assuming you get those right in your life, or you have sufficient income to cover those easily pre-retirement or during retirement, you have largely solved the biggest budgeting issues with those "big 3".

There is no right or wrong, just want you can or are willing to pay for.
 

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Discussion Starter · #184 ·
End of May 2021 Update

Savings and Investments

My investable assets: $1.985M. Up about $58.9k for the month.
Her investable assets (excluding DB pension): $610k. Up about $6.6k for the month.
Combined investable assets: $2.595M. Up about $65.5k for the month.

After a wobbly start to the month with markets contemplating inflation concerns, it ended up being a solid month for my portfolio, again fuelled mainly by the non-registered dividend growers. My non-registered portfolio also hit a milestone by cracking the $1M mark which was a bit exciting. The rest of my portfolio was up slightly with my RRSP getting the added bonus of my 2021 tax year contribution.

The missus' portfolio had slight gains across the board with just under half of the total coming from savings. She's contemplating some minor tweaks to her holdings.

Spending
May Spend: $2630
YTD Spend: $17170

May ended up being a relatively light spend even with a few birthday and baby shower gifts. We also ate out a bit, taking advantage of the patio dining that’s allowed and some nice weather. We didn’t get to the house maintenance/fencing so that spending will end up in another month.

I’m guessing June’s spend is going to be similar to May’s spend in the $2500-$3000 ballpark without many big purchases. Until we’ve line up someone to do the fence and are pretty sure we’re going ahead with it I’m going to leave that out of the estimates.

Looking further ahead though, July is likely going to be a massive spend with the second property tax installment due and events starting to ramp up with many health restrictions targeted to be lift by July 1.

Comments, Concerns, and Issues
  • A guy I worked with years ago but now in another group just got let go, which kind of aligns with what my manager mentioned in passing to me. He seems to think they are doing a round of forced departures but our team is safe. And then they will be offering voluntary packages. That kind of got me all excited and I can’t stop thinking about it because I’m going to try to grab one of those voluntary packages if they do eventually get offered widely.
  • BC announced its reopening plans with a lot of things targeted to being normalized by July 1 pending the data/numbers. Some festivals and events are even planning to run this summer and we’re looking forward to attending EVERYTHING.
  • We’re starting to think about a planning an extended weekend trip around BC in the late summer and a trip east in the fall. Still not ready to book anything outside of Canada until there’s more clarity around the border rules and quarantining. However, the ways things are flowing now, I’m guessing we’re both going to get our second shots by end of July which will likely open up some options.
Countdown to Retirement (April 2022)
10.5 months to go
 

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Discussion Starter · #185 ·
End of June 2021 Update and Midyear Status

Savings and Investments

My investable assets: $2.047M. Up about $61.3k for the month.
Her investable assets (excluding DB pension): $627k. Up about $16.9k for the month.
Combined investable assets: $2.673M. Up about $78.2k for the month.

It’s been a very good upward run since Nov with only a small blip in Feb. And that’s allowed my portfolio to cross over the $2M mark for the first time in June. Both the non-registered Canadian dividend growers side and the mostly index EFT registered accounts side equally supported the gains this month. The weakened loonie limited the upside of my portfolio in USD terms. I purified my dividend portfolio a bit by dropping non-moat’y stocks that I considered non-core.

The missus’ portfolio had solid gains across board and has similarly trended upwards nicely since Nov last year.
My Portfolio
Year End 2020 Actuals
2021 To End of Q2
2021 Full Year Targets
End of 2022 Retirement Goals (Rough)
Cash (soft target)27.0k25.3k20k30k
Non-Registered899k1.046M1M1.1M
RRSP439k478k468k450k
TFSA120k136k133k135k
DC Pension332k360k360k350k
Total1.816M2.047M1.982M2.065M
Non-Registered Account Dividends40455229854500050000

As of midyear, my portfolio has hit all my 2021 full year targets (other than the dividend target of course) and even most of my retirement year targets. The dividends are trending to $47k for year so I’m feeling confident about hitting the $45k target this year and the $50k target next year.

While I can’t complain about hitting my numbers, it’s really only half the journey with many more ups and downs expected along the way.

Combined Portfolio
Year End 2020 Actuals
2021 To End of Q2
2021 Full Year Targets
Combined Totals2.383M2.673M2.544M

Spending
June Spend: $2970
YTD Spend: $20160

June was a moderate spend month hitting the upper end of my estimate. Biggest category of spend was on eating out. We also had a relatively large gift/charity spend for the month.
Wastefully, I paid $20 in idiot tax to buy 4 drawings’ worth of lotto max tix when the jackpot went unclaimed for a few weeks. Didn’t win a thing.

July is expected to have a very heavy spend with our 2nd property tax installment and some “fun spend” as BC goes into Step 3 of our reopening plan. We’re also going to open the taps a bit to hit a time limited credit card bonus in July through September. It may cause our spend to look a bit disproportional over the year as we’re going the bring forward some spend via prepayments and gift cards.

Year End 2020 Actuals
2021 To End of Q2
2021 Full Year Trend*
2021 Original Forecast
Food & Eating Out1345081501613015000
Housing & Utilities1701065801255917000
Transportation4290187023204500
Personal8620301059508000
Entertainment10904208302000
Travel3810307010000-15000
Side Business200100200200
Total484902016038060
55000-60000​
*Full year trend is not necessarily double the first half spend due to large single annual spends in the first half of the year factored in (like car and house insurance).

Food & Eating Out: Both our grocery and eating out bill are trending to be close to 20% higher this year. There is definitely food inflation with beef prices the most easily noticeable by me. We’re also still doing some grocery runs for our parents. I didn’t calculate if we’re just eating out more or if prices have gone up. It’s likely a combo of both since last year was a bit of an aberration with our coed leagues shut down and us not being able to socialize after games.

Housing and Utilities: We’re currently trending under estimate for housing and utilities costs this year. Utility bills are up but we were able to shrink our home insurance by switching providers. We may still end up around our original forecast if we end up doing some repairs and maintenance we’ve been too apathetic to action.

Transportation: We’re still not driving a lot so still only filling up the tank about once a month. The missus may head back into the office in the fall and we’re planning a road trip so fuel spend will likely go up. However, a decrease came from car insurance with the provincial insurer moving to a limited no-fault model and providing a rebate due to the last of crashes last year with everyone driving less.

Personal: Spend in the personal category has been fairly low so far as we haven’t done a lot of shopping or had a lot of medical/dental spends. But there may be a jump in the second half of the year. I’m planning on getting another set of glasses. We might go a bit more wild during Black Friday and Boxing day. And we’re thinking about getting another credit card for the welcome points since the new offers are unprecedented with the credit card companies wanting to capitalize on pent up demand spending. I put credit card annual fees in the personal category.

Entertainment: Our entertainment spend has been fairly light so far except for a $200 consumer electronics purchase that I felt fell under Entertainment than Personal. However, festivals are planning to run smaller/limited events this year now that BC has entered Step 3 of the reopening plan and I’m pretty confident of hitting Step 4 in September. So, there’s going to be more activities to spend on. Being the Gen X’er that I am, the Pet Shop Boys & New Order are in town Oct and I may want to try to snag last minute tix to go see them.

Travel: Travel spend was limited to a piece of tech gear: a 20000mAh power bank that was on sale. Again, this will jump up as we book a road trip for the late summer and hopefully some flights for late in the year and for 2022 travel.

Comments, Concerns, and Issues
  • Well, it looks like the voluntary packages are not being offered to my team so it’s back to plan A where I’ll let my manager know in the fall that I intend to leave the company/retire in the 2022. The company seems to do a final round of layoffs annually in Q4 to clear the books for the next year. We’ll see if I can make myself an easy sacrificial lamb. I have to admit that my “gives a fxxk” quotient is starting to waver.
  • Just got my second vaccination and BC has lifted a lot of restrictions July 1 for Step 3 of the reopening. On one hand, we’re looking to spend some dollars to do as much as we can. On the other hand, we don’t want to totally overpay for something because of pent-up and outsized demand. It’s going to be situational dependent.
  • We’re still not ready to plan/book travel way in advance, particularly international, even though we realize we might be missing out on some deals. There’s still too much uncertainty around insurance, travel redtape, local restrictions, etc. and the corresponding effects around how enjoyable the trip might be or the effort required to make changes on the fly. Right now, any travel will be game time decisions. A last minute roadtrip somewhere around BC is still top of list.

Countdown to Retirement
9.5 months to go.
 

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Great job Milhouse! Looks like retirement is knocking loudly at your door. According to VPW, it looks like you and Mrs. Milhouse could retire now and spend as much as $180,000 a year for the rest of your lives. Out of curiosity, do you think you are going to have a hard time adjusting your spending habits during retirement? Would it be difficult to switch from spending $50,000 a year to $180,000 a year?
 

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Discussion Starter · #187 ·
Thank Mookie.
Here are a couple of thoughts in response to your question:

From an income available/allocated to spend perspective, we’re not going to flip the switch and go from 0 to 100mph overnight. The missus is going to continue working, saving, and contributing partially to our shared spend for a few more years so that part will stay fairly stable (her choice). I’m planning to have my retirement income stream gradually come on line. 2022 will be a mix of employment income and half a year of dividend income (after stopping the DRIPs post-retirement). In 2023, it will be a full year of dividend income plus the start of annual RRSP withdrawals. This will continue to 2027 when I plan to start drawing from my DC Pension. Over the course of those initial 5 to 6 years, I estimate the our combined spend will gradually increase from $50k to potentially $100k-$120k after tax which is still quite the jump but not to $180k/yr.

I feel 2 things are going to help with the mental aspect of allowing us to spend from my retirement income stream. The first is the dividends are hopefully going to feel like a regular, though a bit lumpy, paycheck that’s meant to be spent. The second is just being able to be flexible with our overall spend and spending more when returns are good and scaling back when they aren’t which kind of aligns with VPW strategy for my RRSP withdrawals. I’ll probably set some guardrails around upper and lower limit variability though.

The missus is more of a saver than a spender. Ramping up spending in of itself won’t be something that she’ll give a lot of though on. She gets her joy not directly from spending but from the security of both being able to spend when she needs to and being able to capitalize on a deal without needing to worry about the impact the spend may have on our finances. She lets me come up with the crazy spending ideas.

I’m more of the spender but not at the expense of hurting our long term finances or missing our goals. On one hand, I tell the missus that I’m looking forward to slowly opening up the taps and taking our savings out for more of a spin. On the other hand, mentally, I know there will be an adjustment period for me to become familiar/comfortable/into cadence with how larger individual purchases/bills and increased regular spends line up against our growing retirement income. After so many years, my decisions are so used the context of what kind of spend aligns with our savings goals and a ~$50k spend.

The original and current plan still is to throw these additional dollars at our travel spend: more days traveling, staying at some better hotels than some of the holes in the wall we occasionally book, being more selective about our flights (carrier, plane type, departure times, might consider biz class if on sale, etc), taking our parents on a few trips while they’re still mobile, and so on. The missus would also like us to spend some more money (and time) on the house and furnishings, a lot of which we’ve put off due to lack of urgency. I'd also like to spend some more money on entertainment like ticketed events (concerts, Canucks games, etc). These are probably the big hitters. We’re not going to force our spend. If there are leftover dollars at the end of the year, I’m not sure yet if we’ll reinvest it or just build up our cash reserves.
 

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Or gift the surplus. There is no point putting the surplus into the bank or investments since that just grows the net worth problem that gets more problematic with time. Unrealized capital appreciation becomes a real problem over time, more so than surplus cash.

I've advised a person I provide some help to for over a decade, to look at net worth at the end of each year, and if it is higher than at the end of the previous year, gift the difference to family and/or charity, the latter potentially in kind for bigger bang for the buck. Another approach might be to use a 5 year rolling average to smooth out the bumps of market ups and downs for gifting purposes.

I suspect this methodology is heresy to some here but it makes no sense for retirees to grow net worth with a resultant huge tax problem on last-to-die.
 

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Discussion Starter · #189 ·
Good suggestion. I've actually thought about gifting shares to charity based on a few articles I've come across. However, I need to research the nuts and bolts of it in more detail.
Not concerned about gifting to/spending on family as that's already an ongoing activity.
 

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Be careful with late summer travel plans in BC - forest fires can make dim the experience. Try to stay close to the coast, avoid the interior is my sugggestion.
 

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Be careful with late summer travel plans in BC - forest fires can make dim the experience. Try to stay close to the coast, avoid the interior is my sugggestion.
Sometimes that is true and other times not. The coast had a heck of a fire 'air quality' season either last year or year before. The interior had 2 bad July-August seasons in 2017 and 2018 I think. Much of it US based fires in WA, OR and CA rather than BC. It depends on prevailing wind directions and fire locations. We learn to roll with it.

We have some fire haze at the moment due to all the wildfires in the past week but nothing that would stop anyone from doing outdoor activities. That can change in a matter of hours in either direction with a prevailing wind direction change.
 

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Discussion Starter · #192 · (Edited)
We actually ran into smoke/haze problems last year when we did a roadtrip to Kelowna. Friday and Saturday were great but I think the wind shifted on Sunday and it became smokey and hazy. Wasn't as nice out but didn't really impact our plans.
We're just going to book week of and so we can see decide based on how conditions are (more concerned about rain). Sunshine Coast circuit was another idea for this year. tbd
 

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Over the course of those initial 5 to 6 years, I estimate the our combined spend will gradually increase from $50k to potentially $100k-$120k after tax which is still quite the jump but not to $180k/yr.
My wife and I are also very used to being savers rather than spenders. Years ago, we used to worry about whether we could ever afford to retire. Now it's quite obvious to us that we will have money problems in retirement, but it's not about having too little, it's about potentially having too much. Who knew that was possible?? Either I should retire earlier, or I need to figure out how to spend more in retirement.

It will be interesting to see how you manage this transition to more relaxed spending in retirement. It sounds like you have some good ideas already on how to spend more, and AltaRed also has some good ideas. My wife suggests you start a scholarship fund.

The bottom line is that we all should try to extract the maximum happiness out of life while we're still alive and healthy. It would be a shame to end up as the richest person in the graveyard.
 

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Discussion Starter · #194 ·
My wife suggests you start a scholarship fund.
I thought about this idea too as I was a recipient of a small family-funded scholarship way back in high school. Was thinking of it as more of a legacy idea though.
 

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Discussion Starter · #195 ·
End of July 2021 Update

Savings and Investments

My investable assets: $2.078M. Up about $31.6k for the month.
Her investable assets (excluding DB pension): $637k. Up about $10.8k for the month.
Combined investable assets: $2.716M. Up about $42.4k for the month.

While the month showed a solid gain for my portfolio, there are a few mixed feelings when looking under the hood. The gains in my non-registered account were mainly due to the dividends paid out this month. My registered accounts drove most of my overall portfolio gains this month but I suspect a weaker loonie played an important part of that.

The missus' portfolio keeps chugging along and again had solid gains across the board. She's in the midst of moving her RRSP account to a direct investing account and making some changes to the holdings.

Spending
June Spend Correction: $2970 to $2990
July Spend: $7900
YTD Spend: $28080

Blew the doors off a bit with our July spend. Over a third of it went to our second half property tax installment though. The rest of the damage came from eating out, entertainment, and presents/gifts when getting together with friends and family with the loosening of heath restrictions in BC.

August and the next few months will likely be a bit spendy too as we take advantage of the good weather, stuff happening around town, and just being able to get together with people more regularly. Estimating a $4000 August spend.

Comments, Concerns, and Issues
  • I kind of feel bad when my manager talks about 2022 planning with me because we’re starting some foundational work in late Q3. However, I’m still planning to tell him in October that I’m likely retiring in 2022. That should give him enough time to reshuffle things as needed. Kind of looking forward to that discussion and it’s only 2 months away.
  • There’s a good amount happening around town this summer with annual events able to get up and going, albeit in smaller scales. Lots of people, including the missus and I, seem to be out and enjoying themselves.
  • While we don’t have any trips booked yet, we have a couple on the radar now. However, we’re still not going to book rooms or flights until closer to when we want to go.
  • I’ve let my fitness slide and weight increase a bit over the last few months. Got to get back onto a regular fitness routine.
Countdown to Retirement (April 2022)
8.5 months to go
 

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However, I’m still planning to tell him in October that I’m likely retiring in 2022. That should give him enough time to reshuffle things as needed.
I would reconsider doing that if I were you, it's way too much heads-up time, and nothing positive can come out of this discussion for you. You may also find out that once your employer knows you will leave, you will get sidelined hard and the last few months of work will be miserable and awkward. The news will spread among your colleagues and you'll get all sorts of reactions, maybe a lot of jealousy considering your age.

I'm sure you want to do the right thing by your employer, but don't tell them anything until you're certain of the date, and not too far out in advance. 3-4 weeks notice will give them enough time to figure out a replacement. Don't worry, they will manage and adapt without you.
 

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Discussion Starter · #197 ·
I've been going a bit back and forth in my head about whether or not to go ahead with the October disclosure to my manager. Have definitely taken into consideration that the possible risks outnumber the possible benefits.

The main goal of the October disclosure is to just get it off my chest so I can exhale a bit. A secondary goal is to potentially show interest in getting an exit package when they do a typical end of year purge. I'm not sure how one could hint at being interested in one without the awkward implications. A package isn't a must have but it would be a nice cherry on top.
I feel my boss is pretty good in keeping things confidential as he has also trusted telling me some interesting stuff. While I don't think the news would go further than him at this time, I also realize that he'd likely make some decisions, even if subconscienciously, based on me potentially exiting. Worst case, I can see myself stuck on some crap projects during my remaiing time. But I've been backloading as much vacation time as possible to make it go by quick.

I do have one relatively recent example to go by. Someone I was working closely with on a project who was in my VP org but not in my immediate team took a voluntary package in his 40's. Caught me and everyone on the project by surprise. As, I was wondering why he was taking all this time off the last few months, he was basically burning through his remaining vacation time before he left. Everyone thought he was pushed out but he said it was voluntary and in fact a positive thing. I didn't want to pry so for all I know, his wife won the lottery and he was retiring. :D Regardless, everyone was really happy for him to escape the megacorp. Kind of hoping for a similar low key exit.

The time required to get someone hired and trained is months based on past team replacements so I'm pretty set on giving formal notice in January. But I have no illusion about how the machinery just keeps on turning after someone leaves.
 

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I would reconsider doing that if I were you, it's way too much heads-up time, and nothing positive can come out of this discussion for you. You may also find out that once your employer knows you will leave, you will get sidelined hard and the last few months of work will be miserable and awkward. The news will spread among your colleagues and you'll get all sorts of reactions, maybe a lot of jealousy considering your age.

I'm sure you want to do the right thing by your employer, but don't tell them anything until you're certain of the date, and not too far out in advance. 3-4 weeks notice will give them enough time to figure out a replacement. Don't worry, they will manage and adapt without you.
+1. I would not say anything to anyone until I was CERTAIN that I would retire in 2022. The heads up time you give is up to you but I would not open up what could be a Pandora's Box until you are 100% sure. Things could go sideways and irreparable damage could result if you decide not to go after saying six months prior that you might. The fact you feel bad about it kind of indicates that your manager is not going to take it well so be certain!
 

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The main goal of the October disclosure is to just get it off my chest so I can exhale a bit.
Figure out a another way to deal with your anxiety. Telling your boss that you may retire sometime in the future is an absolute, unequivocal mistake.

A secondary goal is to potentially show interest in getting an exit package when they do a typical end of year purge. I'm not sure how one could hint at being interested in one without the awkward implications. A package isn't a must have but it would be a nice cherry on top.
Now that is a problem you can take to your managers. Manager don't like to lay off people normally. So they would welcome volunteers because it causes them less stress. You can always have a private conversation with your boss to say if they need to do layoffs, you would like to volunteer (but be sure you want to do it).
 

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One last point is I wouldn't get too hung up on the exit package. It would be nice for sure, however let's be realistic here, it would be the cherry on top of a very large sundae. You are extremely well-off and you will have a very luxurious retirement either way. Especially when your wife's DB pension kicks in.
 
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