How Your Side Hustle Can Help You Retire Earlier


As you well know from this site, we love case studies!

We enjoy posting case studies since we believe retirement or related retirement drawdown case studies can help people see themselves in such examples.

With so many folks establishing a side hustle during the pandemic to make ends meet, or simply follow their passion projects, we wanted to post this case study about how a side hustle can help you retire earlier or better than you thought you could.

We believe such a post is very relevant to many since the traditional norms related to retirement are changing – and that’s good!

Read on in today’s post: how your side hustle can help you retire earlier.

Retirement needs have and will continue to change…

Retirement: the action or fact of leaving one’s job and ceasing to work.

Let’s face it, that’s daunting!

Ceasing to work, for income, forever??

Do that if you must, if that’s your plan, but more and more Canadians are adopting semi-retirement or other forms of financial independence, work on own terms (FIWOOT) for good reason.

Here are some Statistics Canada facts and information to consider:

  • Close to one-third of persons aged 60 and overworked or wanted to work in the previous year. Of these, more than 80% worked as the main activity, about 10% worked at some time during the period without it being the main activity, and less than 10% did not work but wanted to work.
  • Several factors may have contributed to an increase in labour market participation among older folks in their 60s, these factors include but are not limited to:
    • higher life expectancy (and more years of good health),
    • enjoying less physically-demanding jobs,
    • seeking educational and social attainment,
    • delaying life impact transitions (such as financial impacts of retirement and/or lower income).

We know from supporting over 100 clients on this site to date (and we can help you out in a low-cost way too!) different reasons can lead different people to continue working past their 50s or even 60s.

We applaud that.

Some folks may work mainly because they need the money. Not ideal.

Others may work mainly because they like what they do, they want to stay busy or even because they like socializing with their co-workers. Far more ideal.

Working by necessity probably isn’t fun for most of us.

Working because you want to, if you want to, on your own terms, is likely where most of us aspire to be…

Consider semi-retirement to something

Those popular ‘Freedom 55’ ads with couples walking on beaches endlessly probably feel like less of a reality for many Canadians.

Higher inflation. Higher interest rates. Higher taxation concerns over time.

We get it.

At Cashflows & Portfolios, both Joe and I have been seeing the writing on the wall for many years now. We have little intention of stopping to work entirely – and just retiring. Retirement never made sense to us. It doesn’t make sense for us in our 40s and likely won’t many years ahead.

This is why we’ve both embraced and advocated for others to at least consider some form of FIWOOT experience in the coming years. Financial Independence, Work On Own Terms (FIWOOT) can offer many benefits:

  • Higher, personal engagement and life satisfaction,
  • New opportunities, and potentially,
  • More or sustained income to spend.

All wins in our book.

How your side hustle can help you retire earlier

Given so many people are now embracing a financial plan that includes work on own terms, once they’ve reached financial independence or as part of their financial independence journey, we wanted to highlight how your side hustle can be a HUGE enabler for you to retire earlier – if you want to!

Whether you’re in your 30s or 60s or anywhere in between, you might be considering your version of FIWOOT and if so, we’re here to help with this new case study.

Our case study participant today, Steve, is a single, male who lives in Toronto, Canada.

Our buddy Steve has a good salary today, but he also loves his side hustle.

Steve knows:

“Controlling your time is the highest dividend money pays.” – The Psychology of Money


Steve wants to know how his side hustle can support his financial independence plans.

Today’s post will tell him how.

Side hustle case study inputs – The Assumptions

Before we get into the results of this case study, let’s look at Steve’s important assumptions used in this scenario:

  • Steve is 35.
  • Current, great salary of $95,000 per year (before tax).
  • Steve aspires to retire at age 55, with a spend of about $60,000 per year after-tax.
  • He has no workplace pension at all to rely on.
  • Given his age 55 retirement date, and great salary, we’re going to assume up to 80% max Canada Pension Plan (CPP) benefits at age 70.
  • Steve will take Old Age Security (OAS) benefits at age 65.

Steve knows about CPP and OAS benefits (and OAS clawbacks) in retirement.

He’ll take OAS at age 65 but defer CPP until age 70 – find out why here: powerful, inflation-protected benefits of deferring CPP.

Further Reading: When is the best time to take CPP?

  • Steve has $100,000 in RRSP assets, maxing out that account to lower his personal tax rate since he started earning more income a few years ago. For now, we’ll assume he’ll convert his RRSP to a RRIF at age 71.
  • Steve also strives to max out his TFSA, since he knows if he does, it could be quite possible to retire using just the TFSA in a few decades!

Further Reading: Can you retire using just your TFSA?

  • Steve rents, is not giving into the Toronto housing craziness until things settle down in the real estate market. We don’t blame him!

For each scenario below, to highlight the power of a side hustle, we’re also going to assume the following when it comes to his RRSP and TFSA assets, and inflation:

  • Steve is all equities, in his asset accumulation years for sure, so we’ll assume a growth of 6% on average for the coming decades.
  • Inflation runs at 2% long-term, it will calm down a bit too!
  • Steve’s life expectancy is age 95.

How your side hustle can help you retire earlier – Scenario 1

In this scenario, we’ll assume no side hustle income and no plans to earn any, while still trying to retire at age 55.

The results, that works!

Again, assuming a solid 6% rate of return pre-retirement, and post-retirement to age 95, our friend Steve has no problem meeting his desired spend.

Side-Hustle Scenario 1 - no part-time work

How your side hustle can help you retire earlier – Scenario 2

In this scenario, we’ll assume some small side hustle income that delivers about $1,000 per month and is taxable until age 55. Steve will continue to max out his TFSA so this money will be invested in a taxable account at 6% return pre-retirement and post-retirement.

The results?

Steve can likely retire 3 years earlier or simply enjoy spending more money when he does get there at age 55.

Side-Hustle Scenario 2 - $1k per month to age 55

How your side hustle can help you retire earlier – Scenario 3

In this final comparison scenario, we’ll assume a larger/modest side hustle income that delivers about $2,000 per month and is taxable until age 55. Again, because Steve continues to max out his TFSA and make RRSP contributions to lower his taxable income while working, Steve’s hustle-money will also go into his taxable account and earn 6% return pre-retirement and post-retirement.

The results?

Steve can likely retire 5 years earlier!

Or, spend a lot more starting at age 55.

Side-Hustle Scenario 3 - $2k per month to age 55

How your side hustle can help you retire – small changes add up over time

$1,000 per month is a lot of money.


This is because this equates to tens of thousands of dollars when time and the magic of compounding is on your side.

You don’t have to have a side hustle, by any means. We are trying to highlight from today’s post that earning more, and investing that income wisely, can shave years off your retirement date and/or allow you spend more money later on.

How your side hustle can help you retire earlier summary

We believe some aspiring retirees (5-10 years out) should think long and hard about full-time retirement and stopping work – completely.

We also believe that turning any hobbies even into a small income stream, can be very beneficial to your retirement income plan.

There are great reasons to work on your own terms, which can be personal too:

  • Continuing part-time or side hustle work gives people a purpose in life – a reason to be productive – contributing to something or someone at any age.
  • Some forms of side hustle income can be a mental and emotional stimulator: they can keep you happy and healthy. There is evidence that work, when balanced and aligned to your values, actually makes you very happy!
  • Working, even for modest or occasional income, can alleviate financial stressors including mitigating any sequence of returns risk, fighting higher inflation, fighting higher interest rates and any future, higher taxation changes.
  • Working, even for some income here and there, can help you retire earlier if that’s what you really want to do!

Mounting studies, research and anecdotal information suggest balance is a key to giving us a sense of purpose, it can keep us healthy, and happier and increase our life expectancy.

You can check out Andrew Hallam’s fine book and our review of his book Balance for that very information.

Consider work on your own terms

My Own Advisor has written about his plans to avoid FIRE (financial independence, retire early) and instead focus on celebrating FIWOOT (Financial Independence, Work On Own Terms).

There is certainly no one-size fits all retirement plan. We just want you to consider yours!

Working, saving, investing whereby money is saved up to be spent only in the latter years of life, seems neither feasible nor practical nor fun these days. We wouldn’t advise that.

We’re not waiting for our 60s or 70s to live our lives. You shouldn’t either.

Need any support with your retirement income projections?

Knowing how to save and invest wisely, to help you get the most out of your portfolio, is something we can help with, including how your side hustle can help you out too!

If you are interested in obtaining private projections for your personal financial scenario, read more about our retirement projections service.

A reminder to those who have recently joined our readership and new fans of the site – our site is growing thanks to you!! As an example, a big thanks to Rob Carrick for mentioning our site and services in The Globe and Mail. From Rob:


Cashflow$ & Portfolios is the name of a website built to help people learn how to reach their long-term financial goals with budget and long-term investing. Brought to you by a pair of veteran personal finance bloggers.”

Yup, that’s us!

We appreciate every comment and email and every client interaction.

Stay tuned for more case studies and great articles over time!

Mark and Joe.

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