In The Press

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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Nearly half of Canadians are banking on an inheritance to meet their financial goals. What are the dangers?

October 21st, 2019

The Globe and Mail – By Gail Johnson

Counting on a lottery win is disastrous financial planning, but nearly half of Canadians are banking on another kind of windfall when they look to their financial future. Forty-four per cent are expecting an inheritance, according to a recent Edward Jones poll.

That kind of life ring apparently can’t come soon enough, with 83 per cent of the 1,500-plus Canadians surveyed saying they haven’t achieved their financial objectives because of hindrances such as high cost of living, low income and insurmountable debt.

While there may be comfort in knowing that a cash gift is in their future – whether it’s through a living inheritance or a will – the financial planning industry agrees that Canadians should be careful about incorporating that into a realistic, sound financial plan.

In addition to dealing with the embarrassment, young people slated to receive money need to get ready for that, says fee-only financial adviser Ngoc Day of Vancouver’s Macdonald Shymko & Co. Ltd. Those who plan to use it for housing should stress-test potential mortgage payments to make sure they are not buying too much house, particularly if interest rates were to rise.

Can Abby live comfortably while saving for retirement if she has no work pension and her spousal support payments end when she’s 65?

September 6th, 2019

The Globe and Mail – By Dianne Maley

At the age of 50 and recently divorced, Abby is making independent financial decisions for the first time in her life. She knows what she has to do.

“I’m trying to learn about finances and investing, and I need to come up with a stepped plan that will help me live a balanced life now while saving and investing for retirement,” Abby writes in an e-mail. She has no work pension. Her spousal support payments will end when she is 65.

She has two children in their 20s, the younger of whom is living at home and going to university. When her son graduates in a couple of years, the family house will be sold and the proceeds divided between Abby and her former husband.

In addition to the family home, Abby and her ex-husband jointly own a company. Under the settlement, he will buy out her share over 15 years. Abby herself has a small business teaching pottery classes, which brings in about $10,000 a year.

“I would like to retire with modest income and be able to travel and enjoy the simple life and live within my means,” Abby writes. Soon, though, she will need to find a place to live.

We asked Ian Black, a fee-only financial planner at Macdonald, Shymko & Co. Ltd. in Vancouver, to look at Abby’s situation.

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

August 2nd, 2019

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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Can This Single-Income Couple with Two Teenagers Soon Retire?

March 15th, 2019

Special to The Globe and Mail – By Dianne Maley


Living well below their means has paid off for Ellie and Evan, a single-income couple with two teenagers and a strong desire for Evan to retire from work early. He is 50, she is 49.

Helping their plans are their suburban Vancouver house, which has risen substantially in value, Evan’s two defined benefit pension plans, one from a previous employer, and $11,000 in rental income from a lower-level apartment. Evan earns about $106,500 a year.

“We have saved hard for many years,” Ellie writes in an e-mail. “My husband is the only breadwinner in our family.” Their younger child is in high school and the older one is in university, she adds. They have substantial savings and investments and a mortgage-free house worth about $1,150,000. Their only debt is a $130,000 investment loan, which will be paid off by the time Evan retires.

Evan plans to retire in four and a half years, at the age of 55. The couple’s retirement spending goal is $75,000 a year after tax, far more than the $46,700 a year they are spending now, excluding savings and the loan repayment. After Evan retires, they plan to use the extra money to travel, go kayaking and take plenty of short trips.

We asked Keith Copping, a fee-only financial planner and portfolio manager at Macdonald, Shymko & Co. Ltd. in Vancouver, to look at Ellie and Evan’s situation.

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