Friday, July 30

Family Finance

Family Finance, Personal Finance, retirement planning

When her oilpatch employer’s stock tanked, so did this Alberta woman’s retirement plans

Article content continuedAt present, Lucy saves $1,767 per month. When her pension bridge ends at 65, her pension will drop by $600 per month and be replaced by OAS which has a present payment rate of $614 per month. That will keep her pensions other than CPP at about $3,700 for life. She plans to take CPP later this year, adding $731 per month before tax to her income.Lucy's net worth at present consist mainly of $6,000 of savings, $30,000 in her TFSA and $156,000 in RRSPs. She has a $5,000 line of credit. Her car has an estimated value of $5,000. Her financial assets total $192,000, not including the cash value of her permanent life insurance, which is valued at $70,000. If she were to retire later this year and pay off the line of credit with cash and trade in her old car for a new $...
Family Finance, Personal Finance, retirement planning

How this couple can turn a job loss into tax savings and end up with a’generous’ retirement

Article content continuedThe couple can use tax savings from RRSP shifts to build TFSA balances at $12,000 per year growing at three per cent after inflation to $398,500 by the time Nancy retires at age 65. That capital would produce a non-taxable cash flow of $19,740 for the 30 years to her age 95.Retirement incomeWhen Bill reaches 60 in seven years, his Canada Pension Plan benefits will start at a rate reduced by 36 per cent from his age 65 entitlement to $7,764 per year with no tax. Added to Nancy's $103,200 salary, $72,100 after benefits and 30 per cent tax , they will have $79,864 to spend. That's $6,655 per month. That would cover present allocations.When Bill reaches 65, his Old Age Security can start at $7,362 per year. Added to his annual CPP benefit, $7,764, he will have pensi...