Archive for 2020

With focus on ensuring Evelyn’s care, can James retire now or should he keep working?

February 14th, 2020

Special to the The Globe and Mail – By Dianne Maley

A year or so ago, Evelyn and James were looking forward to their impending retirement. Then Evelyn fell ill.

James’s first impulse was to quit his job to spend more time with his wife. But he also wants to ensure they can afford the best possible care.

“My wife was recently diagnosed with a form of dementia, which will, in the long term, require full-time care,” James writes in an e-mail. Costs for dementia care in an assisted-living home range from $6,000 to $10,000 a month. “It is highly uncertain as to when this level of care will be needed and for how long.” Survival rates, it seems, are “highly variable, and in some cases people can survive 20-plus years after the diagnosis.”

James, who will soon turn 62, earns $168,000 a year plus a bonus of about $50,000 working in sales. Evelyn is 59 and no longer working. She gets a defined benefit pension of $17,640 a year, including bridge benefit, falling to $10,600 at the age of 65. They have two sons, both in their early 30s.

“I had thought of retiring now to enjoy the time of relative lucidity, but I’m very concerned I will not have adequate resources to afford her care when it will be required,” James writes.

They are not without means. They have a house and an investment condo, rented to relatives at cost, as well as registered retirement savings plans and James’s substantial defined contribution pension plan, to which both he and his employer contribute.

“So the question is, should I continue to work and build the financial assets to provide care in the future?” James asks.

We asked Ian Black, a fee-only financial planner at Macdonald, Shymko & Co. Ltd. in Vancouver, to look at James and Evelyn’s situation. Mr. Black holds the registered financial planner (RFP) designation.

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Marguerite is back living with her partner and returns for a second Financial Facelift

January 31st, 2020

Special to The Globe and Mail – By Dianne Maley

In 2013, the year of Marguerite’s first Financial Facelift, she had left her home to care for her ailing mother in Vancouver. Marguerite was 51 and worried that working part-time while overseeing her mother’s home care would jeopardize her plan to retire from work at age 60. Marguerite’s spending target was $50,000 a year after tax.

The planner, Ngoc Day of fee-only financial planning firm Macdonald Shymko, concluded that Marguerite would either have to substantially increase her income, work past the age of 60 or plan to spend less when she retired.

More than six years have passed. Marguerite is 57 and back living with her partner. Her mother died in 2015. Marguerite and her siblings shared their mother’s estate.

The inheritance provided “some measure of financial security as I head toward my life in retirement,” Marguerite writes in an e-mail. She has found work as a supply teacher and plans to continue working part-time to age 65, after which she hopes to travel more. Her retirement spending target is still $50,000 a year after tax.

Marguerite has most of her inheritance in short-term guaranteed investment certificates. “I’ve been hesitant about investing while the markets are high and a correction appears to be on the horizon,” she writes. “When and how should I invest for the long term to earn higher rates?” She wonders, too, whether she should buy an investment property.

Once again, we asked Ms. Day of Macdonald Shymko & Co. Ltd. in Vancouver, to look at Marguerite’s situation.

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