The goal of early retirement
At least once a year I have bit of a breakdown about my early retirement plan. Even though I run the numbers every year to make sure I’m still on track, I somehow end up convincing myself that I’m not saving enough. This happened last week, and I promptly took an entire evening away from packing up my house to play in spreadsheets and run numbers through about a million online retirement calculators. I also tried to share my panic and frustration with RD, but because he’s got a nice government pension waiting for him when he retires, he didn’t really understand where I was coming from.
Sometimes I stress about retirement, but know that I’m on the right track. Just keep on going. :) #forwardbanking
— Krystal Yee (@krystalatwork) November 4, 2015
Early retirement is my number one financial goal. Right now my goal is 55-57. This has been what I’ve wanted since I started taking a keen interest in my finances back in 2006, and I don’t see it changing anytime soon. But what does retirement actually look like? Taken from a 2013 post I wrote, “retirement to me means having the freedom to do whatever I want to do, without the obligation to work for a living. I guess you could call it financial independence, rather than retirement.”
Freedom. It’s a word I’ve been using a lot lately. I recently freed myself from my mortgage, and the lifestyle I desire now (as well as in retirement) allows me the freedom to make whatever choices I want to make. I want my life to be open to all opportunities, and perhaps as I get older, those opportunities will become more defined.
I may not know what retirement looks like for me from a day-to-day point of view just yet (because a lot can happen in the next 25 years), and that’s okay. Right now, I want to live in a small (tiny) home in (or near) my hometown. But just like in life, I don’t think retirement needs to look a certain way in order to be happy. I may have this exact lifestyle for the rest of my life until I die. Or maybe a family is in my future. Or maybe as soon as I retire, I’ll want to move somewhere exotic or travel the world with my husband. I guess the point is, it doesn’t matter what I want to do when I’m older, it just matters that I’m taking the steps now to allow me the freedom to make those choices later.
Back in 2006, I was saving $50/month towards retirement. I’ve come a long way since then, but the $950/month I’m currently saving is still not enough. Once employer contributions kick in, that amount will increase to $1,200. If my average annual salary is around $80k, and I want to be saving 20% of my gross income towards retirement, then I should be at about $1,350/month.
I’ve got some time to think about it before I set my 2016 goals, but I’m fairly confident that I can save that amount, as well as save for travel and any other savings goals that may come up (my total savings rate should be about 50-60%). I’m just not sure how to adjust my auto-debits, as my income can fluctuate quite a lot from month to month.
How much are you putting away towards retirement?
Does the amount you’re saving align with your retirement goals?
Author: Krystal Yee
I’m a personal finance blogger and marketing professional based in Vancouver. I’m a former Toronto Star (Moneyville) columnist, author of The Beginner’s Guide to Saving and Investing, and co-founder of the Canadian Personal Finance Conference. When I’m not working, you can usually find me running, climbing, playing field hockey, or plotting my next adventure.