It’s been a minute since I’ve put fingertips to keyboard, so apologies for that. The reason for my silence was a combination of things, but they are in my rearview mirror now. I anticipate being active on this platform again, sharing my words and wisdoms, and hoping that a few of you find them useful for your own lives.
As the headline suggests, the Sunday Scaries are no longer an element of my life. I’m very pleased to announce to the world that I have fulfilled my dream of early retirement!!!
It’s been nearly three months, and I’m loving it. My time is my own. I’ve completed an RESP course. I have tried making pastry without the benefit of my mother’s tutelage. (Still need to work on perfecting it!) I have spent more time with younger members of my family so their parents can have some kid-free time. Determining the alleged “slow time” at my local Costco has still eluded me but I’m going to keep searching for it. I’ve had time to update my will, to focus on de-cluttering my home, and to plan a couple of short trips.
The novelty of not waking up at 5:30am to get ready for work has not worn off! I love waking to my own circadian rhythm! I feel rested and ready to start the day. Retirement is bliss!
All in all, this new chapter is going very much how I’d envisioned it. Do I have any regrets about pulling the plug? Absolutely none!
But this blog is about the money so I shall share a few observations I’ve made to date about the money side of retirement.
Saver to Spender
People had warned me that this would be a difficult transition. I should have…ahem… heeded their words to prepare myself for no longer receiving a bi-weekly paycheque. After nearly 25 years of seeing a nice amount of money plopped into my chequing account every 2 weeks without fail, the absence of that systematic and reliable monetary deposit is somewhat jarring.
While my rational mind knows that the money in my retirement accounts is for the purpose of funding my retirement, it’s going to take me a minute to get used to spending that money. Three decades of conditioning is not easily reversed! I have made a couple of withdrawals so far, and I’m not denying myself anything I truly want. I’m slowly getting used to seeing my retirement account’s balance drop. I remind myself that the money’s being used as intended.
But that doesn’t mean that it’s not a significant adjustment.
Turning off the DRIP
I’ve been a fan of the dividend re-investment plan for as long as I’ve been saving & investing! As an investment tool for retirement planning, the DRIP’s utility cannot be overstated. Automatically re-investing all those little dribs and drabs over the years has resulted in a situation where I’m receiving a nice 5-figure dividend payment every year.
However, I’m learning to accept that those dividends are meant to replace the cashflow I had from my employment. Has it been an easy lesson for me? No, it has not. There’s constant mental friction about whether I should continue to invest 10%-20% of the dividends earned, while allowing the remaining amount to accumulate in a dedicated bank account. Over the years, I’ve entrenched myself in the DRIP mentality to such a degree that not re-investing a little something is damn near sacrilegious!
So far, I’ve devised what I suspect might be an overly-complicated method for ensuring that the dividends from my non-registered portfolio accumulate in my brokerage account. They’re intended to be my “cash wedge” in case I need additional funds beyond what I’ve managed to accumulate in my RRSP, which I plan to liquidate to fund my life’s expenses until my pension starts.
The DRIP that’s in my TFSA will continue to run uninterrupted unless there’s some very dire emergency that requires me to use those funds. A leopard can’t change all of its spots on the same day, after all!
I’m still debating whether to re-start the DRIP once my pension kicks in. See what I mean about still thinking like a lifelong investor? Changing my mindset won’t be easy…
New Realizations
Not sure where I read the following words but they’re living rent free in my head:
The money will be spent, either by you or your heirs.
BOOM! The truth of this statement’s been rolling around in my noggin for a few weeks now. It’s completely true! If I don’t spend my money, someone else will. And the whole reason I’ve invested my money is to be able to retire early. Yet, even I realize that retiring early without any plan to spend the money beyond basic necessities is a wasted opportunity.
If the money will be spent either way, then I should be the one thinking about how to spend it. It’s a privilege that comes with having been the one to earn what should now be spent. At the end of the day, money is for spending. The trick is to figure out what it’s best to spend it on! More travel? Replacing my vehicle? Taking courses? Gardening & landscaping design? Attending more events? Additional theatre subscriptions?
By now, it should be no surprise to hear that I’ve been spending lots of my time thinking very carefully about how I want to spend what I’ve earned. Whatever’s leftover will go to my heirs in good time. Until my actual demise, every nickel belongs to me and I don’t think it’s unreasonable that I devote some energy to determining how best to use it to make my retired life as good as the one I had when I was in the accumulation phase.
A Job Well-Done!
It’s taken me a long time to get to retirement and I intend to enjoy it as fully as I can. Many mistakes litter my journey to this point, yet time and persistence have dulled their impact on my current financial situation. Do I have as much as I would’ve had if I’d never made mistakes? No, absolutely not.
It doesn’t matter though. I have enough. Not everyone gets to say that, but I’m going to pat myself on the back and say thank you to Young Blue Lobster for making the sacrifices and doing what needed to make this dream come true.