2022 Financial Goals – March Update
Welcome to an update on my 2022 financial goals, a countdown to semi-retirement.
2022 Financial Goals
A reminder to readers we defined our semi-retirement goals a few years ago as part of this Financial Independence Plan here.
I’ve put a screenshot from our actual written plan below:
Sticking to many of the bullets in my asset accumulation years are a given:
- We’ll continue to live within our means.
- We remain on track to pay off all debt/mortgage debt in the coming years.
- We will continue to invest in many assets for diversification and aligned to our risk profile.
There is also work ahead in the coming years to even consider semi-retirement:
- Max out contributions to our Tax Free Savings Accounts (TFSAs) in 2022.
- Max out contributions to our Registered Retirement Savings Plans (RRSPs) this year.
- Continue to pay off our mortgage.
- Initiate a larger emergency fund to start semi-retirement with.
Since announcing these goals for 2022, I thought I would share a quarterly update.
2022 Financial Goals – March Update
1. Max out our TFSAs
Using your TFSA as an investment account is one of the best things you can do with your TFSA, although other ideas exist as well.
Early in January 2022, we moved cash savings into our TFSAs: $12,000 contributed.
Since early January, we purchased a few hundred units of low-cost ETF XAW and some shares in Algonquin Power (AQN).
The rationales behind these purchases were simple:
- With XAW, I diversify my assets across companies and countries from around the world for a low-fee. No stock selection at all. I own 9,000+ stocks within a single ETF.
- I’ve put AQN on my buy radar a few times over the years and 2022 is another example. Algonquin Power is a diversified, international renewable powerhouse with utility generation, transmission, and distribution operations headquartered in here in Canada, with operations across North America, including in Arizona, California, and Texas. I personally like and support their push for green energy. They have many facilities under construction and with the demand (and need) for renewable energy increasing, I believe AQN is well-positioned to deliver cashflow and growth to shareholders like me.
2. Max out our RRSPs
Passionate readers of this site will know for years, I’ve touted the merits of investing inside your TFSA before your RRSP.
There are a few key reasons for this:
- The TFSA “wins” over the RRSP regardless of your earned income. Meaning, regardless of how much money you make, every adult Canadian has the chance to max out contributions to this account for investment purposes.
- While the RRSP is great, for multi-decade retirement saving and investing, it does need to be shut down eventually in the year you turn age 71. This means the RRSP account essentially has an expiry date. There is no such expiry date for the TFSA!
- Life happens. Because TFSA money can grow and be withdrawn tax-free, this makes the TFSA an outstanding estate planning account – your TFSA and your partner’s TFSA should be strongly considered for “the end” when it comes to portfolio drawdown considerations.
I practice what I preach.
So, after maxing out contributions to our TFSAs again in 2022, I’ve moved on and just recently maxed out contributions to each RRSP again for 2022.
I still have some purchases to make inside this account so I will let you know later this year what I purchased.
3. Continue to pay off our mortgage
Without any debt entering semi-retirement, I feel we’ll be in a great position to work on our own terms.
Goal in progress.
4. Increase our cash wedge for semi-retirement
Some readers will recall I made the decision to incorporate in late-2020, for many good reasons many folks decide to incorporate as well. I wrote about my thoughts on whether I would take a salary or dividends from my corporation eventually. In the near-term however, I will do neither.
Instead, I will see if I can increase our corporation income in 2022 and keep our increased cash savings there for the time-being as I approach semi-retirement, potentially around the end of 2024.
We still however keep our emergency fund at this amount outside our corporation.
Aligned to our financial independence plan above, we have a goal of keeping about $50,000 in cash to enter semi-retirement with. That’s essentially 1-years’ worth in expenses to cover all necessities of life if/should we want to spend that and never touch our portfolio or even work part-time. I keep cash as a risk mitigation tactic.
You can see how we intend to structure our accounts for cashflow management here:
Goal in progress.
Is it still all about the dividends?
I suspect even if we get half of those dividend hikes in 2022 (like we did in 2021), we should surpass our $27,000 per year target goal from taxable and TFSA dividend income rather easily by the end of this calendar year.
Here is a longer range projection of where we are headed:
I’ll keep you posted with my monthly dividend income updates! A quick Google search with “My Own Advisor dividend income” will put pretty much all posts on your page 1. 🙂
2022 personal resolutions
Beyond money stuff, there is no value in early or semi-retirement if I don’t have my health.
So, here are a few personal goals for 2022:
- Increase physical fitness. I’ve made improvements over the last year but I’m not where I want to be. I have commited to getting into a mix of walking, stretching, yoga, and some weights three times per week.
- Being more mindful of my time and energy. Less can be more. Aligned to my personal goal above I believe mental wellbeing is essential. As such, I’ve been working on my time management in 2022. That includes working on what moves me and saying a polite “no” to what doesn’t.
So, that’s my update for the start of the year.
I wish you well in your financial or personal goals this year and welcome any comments on mine.
I read every comment.
If you’re considering retirement, make sure you know how and when to withdraw from your RRSP and TFSA.
How much do you need to spend $4,000 per month at 3.5% inflation for the next 40 years?