It’s been in the news lately. We have now removed the mandatory retirement in many provinces (see a good article here).
What’s been failed to mention to most people is the price they have to pay for a late retirement. Yes, you can keep having an income, but I won’t get too attached to those benefits of yours. If your curious check your own work policies, but you will notice that a lot of benefits like life insurance, long term disability and worker compensation board coverage may no longer apply after you turn 65. You might also find your paycheck shrinks a bit due to rising premiums for health and vision coverage.
So do take care of yourself if you plan on working past 65, since it looks like some of the benefits from your work place that would normally look after you are no longer going to be there.
Financially Independent (FI) is the twin brother (or sister) to early retirement. Different package, but the same toy inside. You have enough money to not work if you so choose.
During my lunch break yesterday I can across a series of three posts on the attitude to achieve financial independence over at Violent Acres. They were vulgar, in your face, but true. Here are the three posts Part I, Part II and Part III.
What really got my attention, beyond the writing style, was in Part III there was one phrase that said “I guess the real question is: How bad do you want it?”
And that is the real test of wanting FI or early retirement. You have to understand how badly you want this dream of yours compared to everything else in your life and commit yourself to making that dream come true. Otherwise your plans will always seem to fall apart on you regardless of anything else. You have to find your motivation and commit yourself.
This recent article in the Globe and Mail gave me a small pause. The author was suggesting that you should forget about your RRSP’s and instead concentrate on improving your home as a safer rate of return.
I think he is forgetting one very important thing: in order to get any gains out of your home you have to change markets to try and maintain your lifestyle. Otherwise any gains you have made in your home will get consumed as you buy into another home in the same market.
One other thing that got me was the sales pitch that your home is a safer way to invest over the stock market. Which if you live in Alberta right now this may not apply at all. Home real estate is famous for being very subjective and unstable in the short term.
The last thing that put my guard up on this idea that investing in home improvements will produce a rate of return. This depends on what you do as an improvement (see this article for ideas) some may actually cost you some house value.