Situation: Couple wants to reduce dependence on the energy industry and stabilize retirement income
Solution: Add up all financial assets and income sources, cut investment costs
In Alberta, a couple we’ll call Phil, 54, and Nancy, 56, live on $6,970 a month, composed of his draw on his energy consulting business, her government pension for past employment and some contract work, plus about $1,000 a month rental income. Together, they have a solid balance sheet with nearly $2.8 million net worth. In financial terms, their lives are secure now. It is the future that worries them.
The problem, as with so much that goes on in the energy sector, is that his company’s consulting prospects are precarious, his health is uncertain, and when he can retire is unclear. “We could sell our home in Alberta and build a house in B.C., but will we need to rent out our property in Alberta? What we need to do is to estimate our retirement income, and decide when we should start our Canada Pension Plan benefits.”
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Family Finance asked Graeme Egan, head of CastleBay Wealth Management Inc. in Vancouver, to work with Phil and Nancy. For now, they have $1.6 million of financial assets. “The main concern is whether their investments and future pensions will allow them to retire now or not later than September 2019 with an after tax income of $6,000 per month,” Egan explains.