The Globe and Mail - Dianne Maley
When they first had a Financial Facelift, Peggy and Howard were just starting out, “first home, first kid, first professional jobs,” Peggy writes in an e-mail. A quarter century has passed since then. They’ve moved from the Prairies to an Ontario bedroom community. Howard is now 62, Peggy is 60. Both have government jobs paying a combined $250,000 a year with defined benefit pension plans. They also have a rental condo where their son lives with a roommate.
Now, with their working years approaching an end, they’d like to help their two children financially. “We never expected to have this ability,” Peggy writes. Given that they will have a “relatively healthy pension income, which is not inheritable, we would like to consider options for gifting to help our kids get ahead sooner rather than later.”
Howard plans to retire from work in 2024, at age 64, and Peggy in 2025, at 63. When they do, they plan to sell the rental condo and give partial proceeds to their children. They would sell the family home and move to another town.
Their questions: When is the best time to sell the condo to minimize capital gains? Should they contribute as much as possible to their registered retirement savings plans while they are working, then live off their withdrawals for a few years until they begin collecting Canada Pension Plan and Old Age Security benefits at age 70? Should they buy their retirement home in a nearby town now or wait until they retire?
Their retirement spending goal is $100,000 a year, which includes a comfortable travel budget.
We asked Denny Oenar of Macdonald, Shymko & Co. Ltd. in Vancouver, a fee-only financial planning firm, to look at Peggy and Howard’s situation. Mr. Oenar holds the certified financial planner (CFP), the advanced registered financial planner (RFP) and the chartered investment manager (CIM) designations.