Anthony and Deirdre are making a well-informed decision regarding their retirement savings and lifestyle goals. Here’s an organized summary of their plan and considerations:
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Financial Situation:
- Total portfolio: $2.1 million, including RRSPs ($407k), TFSAs ($635k), non-registered accounts ($890k), and home equity.
- They are in good financial health with a conservative investment focus on dividend-paying stocks.
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Strategic Moves:
- Mortgage Payment: Plan to pay off the mortgage when it matures, reducing debt burden and freeing up capital for investments or travel.
- Tax Management: By moving home equity into TFSAs, they can defer taxes if they withdraw in retirement, without penalties.
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Government Benefits:
- Consider QPP and OAS at different ages, leveraging their family history of longevity to potentially receive full benefits by age 65.
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Income Replacement:
- Aim to replace current income ($8k/month post-tax) with retirement savings, supported by government benefits.
- Use non-registered assets for mortgage payment to enhance future cash flow and allocation flexibility.
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Risk Management:
- Maintain conservative investments in TFSAs for stability, but consider diversification slightly if comfortable with risk.
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Inflation Consideration:
- Ensure their portfolio growth (3% net of inflation) covers living expenses without principal depletion.
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Lifestyle Planning:
- Anticipate high post-retirement lifestyle needs ($8k/month). Their strategy aims to sustain this income while preserving savings for travel and hobbies.
In conclusion, Anthony and Deirdre are well-positioned to enjoy a comfortable retirement by strategically managing their assets, leveraging government benefits, and maintaining a balanced investment approach.
