This renter shows a five-star retirement is possible even without a real estate windfall

Financial Post – By Andrew Allentuck

A B.C. man we’ll call Jonah is employed by a high-tech company. He is 52, anticipating retirement at 60. He earns $106,000 per year and has take-home income of $4,800 per month after extensive deductions for benefits and taxes. A renter, he has neither equity in a home nor mortgage debt. His balance sheet is pristine except for $2,000 in credit card debt.

Jonah expects to die by age 85, and has been thinking about his finances in those terms. The problem — what if he lives beyond that?

Jonah’s daily spending is quite modest. He has rented all his adult life and has no plans to change. He prefers public transit to owning a car. He pays his credit card bills monthly, and has avoided other forms of debt. His indulgences are $500 per month for restaurants and travel at $450 per month.

Jonah expects to be alone in his old age.

“I may need assisted living or full-time care,” he notes. For now, he is healthy but his employer’s medical plan will not cover care after retirement. His questions follow from that concern: when he can retire, whether to buy a long-term care policy and should he buy an annuity as a hedge against declines in his $564,000 portfolio of registered and non-registered financial assets?

Family Finance asked Ian Black, a planner with Macdonald Shymko and Company in Vancouver, to work with Jonah.

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