OK,

Firstly, thanks for looking. I have been called on by a female friend who has asked me to try and come up with some feedback to a problem. Although I know what I would do, and am not in her situation even remotely,I want to get her some advice and opinions from this site, as I believe there are literally hundreds if not thousands of bright people here. I have known this lady for about 30 years, when we were kids we did the hubba bubba for a few years, then rescinded to friends. She once sailed with me from the Vancouver area to the sea of Cortez in Mexico then flew home as I went on to SA.

The ultimate question is: Retire soon (12-18 months) or wait it out for full pension?

Some background.

Female 59 yrs old.
Single, no children at home.
Full Union retirement income on October 2016 - approx 1300.00 per month.
Full CPP (Canada pension plan) at age 65 - approx 1000.00 per month.
Old age security at 65 - approx 600.00 per month.
Has approx 2500.00 income take home monthly. Increases 3% per year (Union contracts)
Has approx 1900.00 in monthly bills before food and car fuel, clothing, entertainment. She says that bills keep going up up up, and leaves her with less.

Union income is reduced by 3% per year for leaving early.
91% of 1300.00 on October 2013 = 1188.00
94% October 2014 = 1222.00
97% on Oct 2015 = 1261

CPP can be taken at 60 yrs of age here, but reduced by 31%
So 69% of 1000 is $690.00

She is in a good position with her home, and has approx $200,000 in equity if sold.
She has two inheritances up the road. One is her mothers home valued at 300,000 (clear title) (split 50% with her brother) second is her fathers home valued at 250,000 (all hers as brother and father not on good terms)

So she has approx 400,000 coming in a few years,when her kin kicks off and leaves her the farms.

So if she opts out early she has:

1188.00 + 690.00 = 1878.00

If she sells her home, and pays off ALL her bills, she will have about 200,000 left.

She wants to buy a boat, worth $60,000

If she deposits this remaining cash (140k) in an ING savings account, it pays 1.35% or about $200.00 per month interest.

If she pulled the interest and added it to her retirement income she would be at approx 2000 - 2100 per month.

She has been taking sailing courses and learning the ropes sort of speaking. I have been helping her get certified.

She is very tired of paying the high cost of city life, she wants to un plug and go travel the world by boat for several years, leaving the employment slavery and debt chains behind her.

This to me is a tough social issue, that is why I have posted it here. Many people are probably facing the same dilemma and are being squeezed ever harder by the corporate Juggernaut.

She feels that these next 5 years will be her prime time to do these types of things, she is scared if she waits till 65 it may pass her by.

Her parents are in decent shape, in their 80s but healthy and active, so no problems on the immediate horizon.

The places she is going are very very cheap to live, food, on shore housing, ect are almost give away. South America and the South Pacific islands.

I have told her I think she should go for it, she is having push back from some of her family.

I told her I would ask the question online.

So my question is:

WOULD YOU DO IT NOW OR WAIT IT OUT FOR FULL RETIREMENT?

Opinions, questions, thoughts, flames welcome.

Screw it. No time like the present.

I know a couple that years ago sold everything and gave up everything .
They got a big sailboat and having been living on it and sailing the seas and love it.

If she has that much money and equity,go for it.
Life is to short to live your dream.

Peace,
K

I would have to conqure, I don't like the water much, but if she does, GO FOR IT!! You only live once! Live it up.

Do it. Life will be over soon.

That is exactly how I see it.

Looking at it from a financial point of view:

CPP - She gets 690.00 per month for 60 months taking it early = 41,400
Union - She gets 1188.00 per month for 36 months taking it early = 42768

This is 84,168 of free early $ plus still gets the Old Age pension at 65 regardless.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Full retirement:

Full = 1300 + 1000 = 2300
Early = 1188 + 690 = 1878

She loses out on 422.00 per month. but recoups $200 from deposit interest.

Lets say she misses out on $300 per month.

At what point (up the road) does it meet and become not a good deal anymore?

And really does it matter up the road as she is going to inherit.

Its a tough issue.

Sorry I didn't read very closely. I see she is planning to get out the country.

Non the less, she should maek sure she has enough for her truly old age for if she becomes infirm.. she wouldn't want to end up in a state provided nursing home (if they're anything like australian ones). I hate debt and money. But yeah, I think she should retire and do what she wants before she is too old to do it, just make sure she is prudent with money, perhaps tell he to see a tax lawyer.. with these sums of money is worth seeking advice to minimize the her tax liabilities.
Sorry to be pessimist, but I would just hate her to retire early, then run out of money after 5 yaers, be unable to get her old job back, then have to live in a #ty apartment barely surviving on a pension for the rest of her years.

Also ge her to check her mortgage contract make sure there is no early discharge fee or anything.

Originally posted by bigdohbeatdown
Sorry I didn't read very closely. I see she is planning to get out the country.

Non the less, she should maek sure she has enough for her truly old age for if she becomes infirm.. she wouldn't want to end up in a state provided nursing home (if they're anything like australian ones). I hate debt and money. But yeah, I think she should retire and do what she wants before she is too old to do it, just make sure she is prudent with money, perhaps tell he to see a tax lawyer.. with these sums of money is worth seeking advice to minimize the her tax liabilities.
Sorry to be pessimist, but I would just hate her to retire early, then run out of money after 5 yaers, be unable to get her old job back, then have to live in a #ty apartment barely surviving on a pension for the rest of her years.

Mate, I know what you are saying. Dont be sorry for being the pooper, its why this was asked, to get various opinions from persons who are not at all connected to the person or the monies.

I appreciate all you have said, I know she will as well.

One other thing, she has enough First Nations (Indian) in her that she has a card.

All her health care is 100% paid, glasses, dental, the whole kit and caboodle.

She plans on cruising till she is 65, if she is cheap like me,she still should have the 140k left and either already have or be close to the other 400k

So 540K plus a income of 1878 plus the old age of 600 is 2500 a month plus the 540k in the bank,my god man how much do you need? LOL

I am starting to wonder if I shouldn't try and be her man boy again. HHhhhhahahahaha

Antar, where are you sweetheart? we need your wise input here. Rabbit2000? drop your carrot and come give advise you old coot.

Originally posted by bigdohbeatdown
Also ge her to check her mortgage contract make sure there is no early discharge fee or anything.

I am sure there will be a fee, they really cover the bases hard on those things.

If her heart yearns to do it, she should. I would. But then I tend to be a risk taker, and have been incredibly lucky so far.
But this doesn't sound very "risky" ultimately.

Also I should add something regarding the "fathers home valued at 250,000 (all hers as brother and father not on good terms)"

This is often the case, however it is possible that the brother may sue for a share of the property if none is left to him. If her father hasn't already, he should make sure he has a competent lawyer ensure that his will is in order. If for example, he bequeaths the entire home to your friend without specifically saying that he is to get none, a court of equity could hold that the son has some entitlement. Best way to stop this is to leave the son something nominal like $1 or broken lawn mower; this will provide evidence to the court that her father didn't simply 'forget' to include the son due to the infirmity that comes with old age. Whole lot of things that can go wrong with wills, make sure its done properly.
This is especially so if there is some kind of 'rift' in the family, as very often, there is dispute which ends up in court where there is child who thinks they have not received their fair share of the estate.
I know they aren't popular in these forums, however, when it comes to Wills and interests in real property, get a good lawyer or you may get a nasty surprise in the future; and when that happens, most of the estate ends up getting chewed up in legal fees.

sounds like she has spent most of her life doing the "right thing". surely its time to kick back and enjoy life. motorbikes are my thing. if I could tour the world on my bike I would go now and I would spend years soon it.

whatever happens though, hope it all works out.

---

Posted Via ATS Mobile: m.abovetopsecret.com

---

Originally posted by fatpastyhead
sounds like she has spent most of her life doing the "right thing". surely its time to kick back and enjoy life. motorbikes are my thing. if I could tour the world on my bike I would go now and I would spend years soon it.

whatever happens though, hope it all works out.

---

Posted Via ATS Mobile: m.abovetopsecret.com

---

Thanks Pasty, it will work out I am sure. It sucks to have to work sooooooooo long and really have little left over after the BS that is our western way of life. I wonder to myself how many people are sick of this game and want the opportunity to unplug from it.

Life goes on right?

Right?