NO COMPANY PENSION, A TIGHT BUDGET (AND A WILLINGNESS TO KEEP WORKING)

Globe and Mail – Financial Facelift by Dianne Maley

web_kcGreg describes himself as a “55-year-old divorced dad of three,” ages 6, 13 and 16. He earns a good income – $96,400 before tax – and likes his consulting work.

His long-term goal is to “enjoy a modest retirement that might gradually phase in by the time I am in my late 60s,” Greg writes in an e-mail. He has no work pension, $113,000 in savings and a mortgage on his Alberta home. Two of his biggest expenses are child support and keeping an apartment in the city where his children live so he can spend time with them.

Greg plans to pay off his $90,000 mortgage as quickly as possible. “I want to be mortgage-free by the time I am 60 or 61,” he writes. Then he would scale back his work slightly (to $80,000 or so, before tax).

“I am in excellent health and feel this is a way to work longer while remaining healthy by carrying a lighter workload,” he adds.

At age 68, when his youngest child is age 19 and child-support payments cease, he would cut his workload in half (to about $40,000). “I really don’t have a burning desire to retire,” Greg writes. “If I have a paid-for house and the kids are grown, I am hoping I can live off a few thousand a month and do a little travelling.” While Greg may help with his youngest’s university costs if he can, he wants the children to pay most of the cost themselves, like he did.

We asked Keith Copping, a fee-only financial planner with Macdonald Shymko & Co. Ltd. in Vancouver, to look at Greg’s situation. Click here to read the rest of the article

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