Couple's retirement complicated by 18-year age difference, money-losing condo and mountain of cash earning nothing

by Davies Otwell
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The sum of these monthly components, $5,157, minus an average tax of 17 per cent, plus $265 per month from his TFSA would be $4,545 per month, or $54,540 per year.

Suzy is willing to take risks in a balanced portfolio with an 80/20 stock/bond blend. Assuming a three-per-cent return for this portfolio of registered and non-registered investments, she can expect her present $677,400 RRSP to generate an annuity of $26,823 per year, or $2,235 per month, for 45 years until she is 95, when all income and capital would be paid out.

Her non-registered investment account with a present balance of $284,480 would pay $940 per month, or $11,280 per year. She could add $7,380 per year, or $615 a month, from OAS and an estimated $8,760 per year, or $730 monthly, from CPP after she turns 60. That is a pre-tax total of $54,243 per year, or $4,520 per month. After 15-per-cent average tax on taxable income and adding her share of TFSA cash flow, $265 per month, she would have $4,100 per month to spend.

The rental, if they pay off the 30-year mortgage, would provide $24,000 annual income per year before $7,956 property taxes, operating costs, insurance, etc. Their net would be $16,044. That is a three-per-cent return on what would probably be an appreciating asset over time. If they move into the condo, they could sell their house for a present price of $1.3 million, less five per cent for fees and fussing, to net $1,235,000. The money they get would be invested subject to a decision about whether to hold cash or stocks.

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