[celiboy]

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How much income is needed after taxes?

To earn 30k per year, I would probably dump all my money into one of the Dividend Achiever indexes (dividendachievers.com). I like that for a few reasons.

1. Dividends are taxed less than interest (although Hillary could change this)

2. The dividend achievers companies increase their dividends at a rate that should match or eclipse inflation.

3. You benefit from capital appreciation as well. (11% average over last 10 years total return)

$900,000 is about the low end of how much the guy would need to retire. Living in a cheaper country for a few years or working part time would go a long way to making this work. The chief concern is inflation. While he should easily be able to earn $30k in gains from his 900k investment now, a bad year or two could be a major setback. 20 years from now he'll need to earn $60k/yr just to be able to afford the same stuff he'd buying today. Even though he owns his own home, taxes will continue to increase as well as maintenance costs. If death comes at 50 years from now, thats a long time this money has to last. He really can't afford to touch the principal at all. Keep in mind how much health insurance will cost now that he isn't working. I guess medicare won't kick in for another 20 years at least.

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After taxes would be 25K. Tax rate in canada for the first bracket is fairly low and dividends are taxed extremely favorably in Canada so the 5K estimate for taxes is on the high side if anything. So after taxes we are talking about 2K a month...I think that is fine with paid off house and car.