“Don’t judge each day by the harvest you reap but by the seeds that you sow” – Robert Louis Stevenson

Its my second day at Banff and have been bored in general. I have seen this scenery several times already, the beautiful mountains and the huge throng of tourists.

This visit further strenghtened my belief that secluded natural setting however beautiful is not my preferred home base. This started in Powell River where I thought that once you see beautiful natural scenery, then thats it, and it gets boring the next day. You can repeat it two or five times more but the appreciation greatly diminishes over time.

What i think is essential for a home base would be convenience, coupled by affordability and dynamism. A quiet little square box in a funky metropolis is my choice.

The good thing I got out of this trip (and for most trips) is the ability to instantly unclog your brain. Some things become clearer and some new ideas come to mind.

Specifically, I have developed this retirement financial strategy for the middle-aged single person.

Step 1. Find your D-day.
This assumes you can determine your D-day as supported by assisted D law or you can DIY by eating loads of roasted pork and ice cream or just take that ‘thing’ thats currently in fashion. For this exercise lets assume it is 75.

Step 2. Determine the amount required on D-day.
That would include clean-up costs, a bit of leftover and a bit of insurance. For this exercise lets assume it is $120K

Step 3. Determine your annual spending on retirement.
This would include health costs and consider whether you are spending retirement on a developed or emerging economy. For this exercise lets assume, emerging economy at $20K annual spending.

Step 4. Determine your annual pension on retirement and consider whether you are taking early retirement.
For this exercise, lets assume annual pension of $8K after early retirement is taken at the age of 61.

Step 5. Calculate the amount needed at the start of retirement.
This will be the amount in Step 3 minus Step 4 multiplied by number of years from start of retirement till D-day plus the amount in Step 2. ($20K – $8K X 15 years + $120K = $300K).
The resulting amount is $300K and not the $1M or at least $500K that financial institutions are encouraging so you will have to work yourself to death, miss out on enjoying life and give your money to someone other than yourself when that time comes.

Step 6. Calculate the amount needed if you take an even earlier retirement without affecting the required pension credits.
For this exercise lets assume early-early retirement at the age of 56. This will be the amount in Step 3 multiplied by number of years from early-early retirement age to retirement age plus amount in Step 5. (5 years X $20K + $300K = $400K)
The resulting amount is $400K if one would like to take the leisure of an early-early retirement at 56.

Step 7. Calculate what age you can quit the rat  race.
For this exercise assuming your age is 46 and have saved $20K since you started saving at age 26 and you have now accumulated $400K, the amount needed at age 56. When can you quit the rat race assuming you are still saving at a rate of $20K annually. This can be solved by determining the age where the cumulative additional annual savings equal the cumulative additional spending. For this exercise, one can quit the rat race at 51. This is the age where the cumulative additional annual savings of $100K ($20K X 5 years) would equal the cumulative additional spending of -$100K ($-20K X 5 years). It is assumed that the cumulative additional savings of $100K will be invested in a small business where one can work and still contribute to pension. If this amount ($100K) is preserved or increased, then this will just be an icing on the cake when one takes early-early retirement at age 56.

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