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As well, Anita can sell her cottage for $280,000 after fees and selling costs. That would provide $22,800 per year or $1,900 per month for 15 years.
Excluding any tax-free withdrawls, the pretax amounts add up to $7,833. After 20 per cent average tax, that will leave her with $6,266 per month, still a little short of her goal.
Her tax-free holdings can close the gap. First, her TFSA of $69,500 after top up will generate $5,650 per year or $470 per month for 15 years while the remaining $100,000 she has as a shareholder loan would produce $8,132 per year or $680 per month. That would make her total spendable income $7,416 per month, a little over her her $7,000 target.
In about 15 years at age 81, she will lose many of these sources of income, leaving her with only her government benefits and registered accounts. At that time, she plans to sell her principal residence and invest the funds to support her income needs. Assuming the property price only keeps pace with inflation she would net about $620,000 of capital after the sale. If invested to her age 95 and used as income she could expect this capital to add another $53,289 per year before tax, ensuring her comfortable retirement lifestyle can continue.
If Anita lives beyond age 95, with all of her financial assets spent, her house and cottage sold and their proceeds spent, she would have to rely on CPP and OAS which, using 2021 values, would add up to $1,656 per month. It is unlikely that this income would provide the late life retirement she imagines.