How to Structure the Withdrawals From Your Investment Portfolio?

One of my favourite things to do on the show is to interview other early retirees, especially those in Canada to learn how they did it, and really dissect their journey to financial independence and/or early retirement. 

No matter where you are on your financial independence journey, I truly believe that we can all learn from others that have done it, and so I like to view what they did as a case study where we can break down their journey into actionable parts that we can apply to our own lives. 

There are after all many paths to financial independence, and so it’s valuable to know what those paths are so that you can pick and choose the components that are the best fit for you, and that are most aligned with your own goals.

Our guest today is Réjean Venne. Réjean worked in the insurance industry for eight years before retiring at twenty-nine and becoming a full-time parent. Réjean and his wife Danielle, along with their three young children, live in Northern Ontario. They write regularly on topics related to parenting, health, mindfulness, and money. You can follow them at mindfulfamily.ca.

Réjean recently published 5 Years to Freedom: A Canadian Guide to Early Retirement which documents his journey to financial independence. 

In this interview, he’s going to take us through his early retirement story and how you got there, along with the lessons that he’s learned along the way which you can then apply in your own life to help you retire earlier.

We’ll also cover how he was able to cut $53,000 in spending annually by retiring early, and how he and his wife were able to retire so early despite having three young kids which is often perceived as very difficult, due to how expensive many believe kids are.

Enjoy the episode :)

1. Can you take us through your early retirement story and how you got there?
2. As someone that’s been retired for 3 years now in their early 30s, what are some of the lessons you learned that could help aspiring early retirees or those that are new to retirement?
3. Is there anything that surprised you after you became an early retiree? For example, were there any preconceived notions or assumptions of what you thought early retirement would be like, and then it ended up being something different?

4. I find you and I are pretty unique in the early retirement space in Canada as we both got to early retirement utilizing passive investments like investing in index funds, but we also used rental properties to get us there. For me, passive index investing was a better fit so that’s all I do now, but for anybody that is debating using one of them or both of them, what’s been your experience in using these different vehicles?

5. Knowing what you know now, if you had to start over to work your way towards financial independence and early retirement, is there anything that you’d do differently?
6. Are there any mistakes that you made while early retired that we could learn from?
7. You mentioned in your book that you don’t really budget in the traditional sense. Can you take us through how you managed your cash flows with your wife during the pre-retirement stage, and how you do it now in early retirement?
8. How do you structure the withdrawals from your investment portfolio (including real estate) so that they are tax-efficient?
9. Early retirement seems like an unattainable dream to many people, yet it’s surprising how attainable it can actually be when you crunch the numbers. One of my favourite parts of your book, was how you were able to cut $53,000 in spending annually by retiring early. Can you tell us a bit about how early retirement allows you to make such drastic cuts, and consequently how a lot of Canadians may actually be much closer to an earlier retirement than first meets the eye?
10. You’re also retired with three kids, and kids are often seen as this massive expense that makes early retirement nearly impossible. Can you talk about how that’s not necessarily so, especially with the Canada Child Benefit that parents are eligible for

11. Most of the early retirees I’ve talked to and researched built up large investment portfolios with the intention of never working again (myself included). But once they actually reached that financial independence number, they eventually ended up taking on some fun side projects that actually bring in an income. Therefore, they didn’t actually need as large of an investment portfolio as they initially thought, and if only they factored that in prior to retirement, they could have retired much earlier. Can you share your experience with this as it seems to be extremely common with early retirees, and Canadians can definitely retire much earlier if they actually include some anticipation of future side income like this in their early retirement plans.
12. Through my research and own experience, I found that getting that sense of fulfilment can actually be a challenge for retirees when they no longer have to work. I know in your book you said that being a dad gives you that sense of fulfilment, but is there anything else outside of parenting that you find really helps in this regard? I find this answer might particularly be helpful for those retirees who either don’t have kids, or those who have kids, but the kids are out on their own now, and so they no longer require that large time investment.

13. What are your goals and plans now? Especially now that the book is written.

• Rejean’s Book: 5 Years to Freedom: A Canadian Guide to Early Retirement
• Get 2.3% interest through the EQ TFSA and RRSP account. This high interest savings account is at 1.50% (up to 30x higher than other banks in Canada)
• Kornel’s Passive Investing Course
• Get your financial planning questions answered for free here.
• Get your mortgage questions questions for free here.
• Rejean’s Blog: mindfulfamily.ca

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