COUPLE’S RETIREMENT PLAN MUST RECONCILE SHORT-AND LONG-TERM PRIORITIES

The Globe and Mail – Financial Facelift by Dianne Maley

Jennifer and George are in their mid-40s with two children, 8 and 10. Together, they earn a tidy sum.

“We only started saving when my husband finished his PhD and got a full-time job three years ago,” Jennifer writes. “Our income went up substantially, with potential for further increase over the next few years.”

Jennifer works part-time for the government, grossing about $31,500 a year, and hopes to begin working full-time within the next three years. She also earns about $7,000 a year in freelance income, but this will stop when she begins working full-time.

George earns about $120,000 a year in base salary. Bonus and other benefits lift his taxable income to about $150,000 a year. He has a group RRSP at work in which his employer matches his contributions.

In addition, they rent out a flat in their B.C. house for $800 a month. They bought the house two years ago.

As their peak earning years approach, they are wondering how to apportion their rising income.

“Our question is, what is the most effective way to build our wealth relatively late in life, with so many conflicting demands?” Jennifer asks. They hope to retire at the age of 65 with desired cash flow of $100,000 a year.

We asked Brinsley Saleken, a financial planner and portfolio manager at Macdonald Shymko & Co. Ltd. in Vancouver, to look at Jennifer and George’s situation. Macdonald Shymko is a fee-only financial planning and portfolio-management firm. Click here to read the rest of the article

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