My name is Mark Goodfield. Welcome to The Blunt Bean Counter ™, a blog that shares my thoughts on income taxes, finance and the psychology of money. I am a Chartered Professional Accountant and a partner with a National Accounting Firm in Toronto. This blog is meant for everyone, but in particular for high net worth individuals and owners of private corporations. The views and opinions expressed in this blog are written solely in my personal capacity and cannot be attributed to the accounting firm with which I am affiliated. My posts are blunt, opinionated and even have a twist of humor/sarcasm. You've been warned. Please note the blog posts are time sensitive and subject to changes in legislation or law.

Monday, January 27, 2014

How Much Money do I Need to Retire? Heck if I Know or Anyone Else Does!

I will not be posting a blog this week. I am spending my time editing a six-part series which I will post during the month of February. This is a bit of an experiment – an entire month examining one topic.

The six-part series deals with retirement rules of thumb, studies and papers on the topic by various retirement experts, issues to consider and finally, some calculations to come to a "number". I am not sure if this is going to be one of my best blog series or my worst. I will leave that determination to you. The initial feedback on my drafts has been very positive; if not that the series is overly ambitious.

The premise of this series came about as I started trying to determine how much money I needed to retire and I was having trouble coming up with a number. Fortunately for you… or unfortunately, during the Christmas time ice storm in Toronto, the power was out at the office and I was stranded at home. With my two now very independent children home for the holidays, and my in-laws moving in (they had no power), I retreated to my computer and decided to detail my thought process on the various papers and studies I have reviewed on this subject. 

I determined most experts in retirement planning are very good at telling you about all the flaws and variables not considered by the current retirement withdrawal rule of thumb, but they provide limited assistance in trying to come up with a number that at least forms the basis of your future planning. Even though we know that number will not be definitive, we are programmed to need a number. 

In the end, I created my own crude and admittedly tax centric model that I compare to other models and methods to determine that ever elusive "magic number". You will have to wait until Part 6 of the series for that revelation. Hopefully you are still reading at that point. See you next week for Part 1.