Nov 2013 – Investment Update

The following is an update of Tim’s plan to retire early.  Please note the house is paid off, so net worth is no longer tracked.

To track my progress I’ve decided to track both my expenses and my investment gains.  So once the investments gains are consistently beating my expenses I’m financially independent and can stop working.  I think my ideal tracking of this would be one full year of investment and spending data, but I don’t have that yet  almost have that.  So for now I’ll do a trailing six 12 month average on spending (but excluding vacations) and investments for the calendar year to date.


Account (Contribution), [+/- Gain or Loss less contributions]

RRSP $36,380 ($100), [+$280]
LIRA $13,350 ($0), [+$90]
TFSA $34,4400 ($0), [-$760]
Pension $83,680 ($1050), [+$690]
Wife’s RRSP $45,500($3500), [+$200]
Wife’s Investment Account $0 (-$0), [$0]
Wife’s TFSA $31,980 ($0), [-$240]
My Investment Account $0 (-$0), [$0]
High Interest Savings Account $1710 (-$400),[$0]

Investment Net Worth $247,003 ($4250 ), [+$263 or +0.1%]

(YTD Contribution: $40,248), [YTD Gain: $24,054 or +13.2%], YTD Avg Monthly Gain $2186

Spending Averages

Last Month $4448

Trailing Last 12 Months $2777


Number of months trailing average spending covered by investment gains: 0.79 {Target 1.0 or higher}


It always seems to go this way, you have one great month of investment gains and the next month you struggle to hold ground.  Oh well, I’m in this for the long run, so month to month doesn’t bother me that much.  What I did find surprising is that the target ratio stayed almost the same at 0.79, so we did better than I thought from that point of view.

Most of contributions from here until the end of the RRSP season next year will be into my wife’s spousal RRSP to help balance out the fact my pension is much larger than her RRSP.  We are likely going to struggle to meet my 2013 target of $48,000 in contributions, but we should get close.  I’ll report on that next month.

Our spending is WAY up this month since my wife’s Rider season tickets were paid for (after winning the Grey Cup of course she is going back next season). Also we started Christmas shopping which also brought up the spending totals.

Any questions?

(click for a bigger version)

Nov 2013 Investment

13 thoughts on “Nov 2013 – Investment Update”

  1. I will be a lower income retiree and so I am very comfortable taking advantages of the tax return that I get from contributing to my RRSP now.

    You look like you will be a higher income retiree and will be taxed on your RRSP withdrawls when the time comes.

    Have people been telling you to give up on the RRSPs?
    They sure are telling me.

  2. Tim, you may have mentioned this in the past, but what is your approximate ultimate investment net worth goal to allow you to ER? 1M seems to be popular amongst the ER set… I’m aiming for 1.5M, with my wife joining me in retirement when we hit 2M. Of course all these plans are subject to change, though we are on track right now.

  3. Tim I find a flaw in your statement that once your gains for a trailing 12 months exceed your expenses you are FI.13% gains in a bull market year may become a loss the next year or two. So shouldn’t your goal be to have a sustainable withdrawal rate on your investments that matches your mmonthly expenses? And that needs to be after tax!

  4. @Jane Savers – Actually I’ll be a fairly low income in retirement ($27K base spending) so tax savings will outway the tax paid in the long run.

    @jon_snow – Final target is around $700K for investments, but keep in mind I plan to keep working a bit so I’m lower than the more typical $1M mark.

    @Peter – Very true, the 13% is not typical. The current measure is more of an interim measure. I plan to ensure I can retire with no more than 4% of the investments per year. So I will hit periods of exceeding my target here, but I need to have that on a consistent basis before I leave work.

  5. In response to Tim’s statement about being low income in retirement….

    If you are low income with the portfolio you have developed I am in big trouble. I am counting on $7,000 from the government and $4,500 from my work pension each year and the rest is up to me. I will be living on about $20,000 per year as a single person and it will be very tight.

  6. Following up on Peter’s comment and your reply, your current spending of $2777/month would be covered by savings of $833,100 based on the 4% rule. This could come down a little if you account for CPP and OAS later in life. Not to be a downer, but it seems clear that you’ve got longer to go than your 0.79 ratio implies. You’re on a good path, though. Good luck.

  7. @Jane Savers – Oh, that is low. $20K is really low for one person. I didn’t mean to imply mine was that low, but rather anything less than $30K a year is considered low by a fair number of people I know.

    @Michael James – I know I’m not almost 80% retired, it’s just the high investment gains throwing it off. Yet just having the total portfolio value didn’t include anything on the spending side, so I used this measure. It isn’t perfect, but gives me a clue month to month if I’m in the right direction.

    @Save, spend, Splurge – Thanks! Oh and it isn’t odd to be excited about maxing things out. I’m hoping to claw through most of my extra RRSP contribution room next year.

  8. @Tim: I know I’ll have a bit of RRSP room starting next year, as well as the SNAFU that happened with my TFSAs not being properly recorded by ING direct.

    I’m looking at plowing about $20,000 into both plans to max them out again. Somehow, leaving them open and not maxed to the fullest gives me the hives.

  9. You could use something like a SWR Monte Carlo calculator and try to reach as close to 100% safety as possible. That would guarantee you progress every month vs. your method where in a down year/period (probably coming soon or at least I hope so since I’m sitting on a lot of cash), it will appear (incorrectly) that you’ll have to work ad infinitum.

    I’ve been playing around with this one lately:

    I like it because it gives you a baseline bare bones austerity mode in case of extended bear markets plus “extras after good market years” option. The Variable percentage withdrawal does somewhat the same thing but running gummy’s Monte Carlo simulator is more fun. Only problem is I have a bit of a problem believing the results because it puts my SWR way over 4%.

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