Tatiana, a 64-year-old woman, faces a financial dilemma. She's been collecting disability benefits and her late husband's pension for a decade, but these benefits will end when she turns 65. With a substantial estate valued at $1,877,000, including a mortgage-free condo and a cottage, Tatiana aims to stop worrying about money, travel more, and help her family. She also plans to give an advance inheritance to her two adult children. Her retirement spending goal is $72,000 annually, significantly higher than her current $39,500. An independent financial planner, Warren MacKenzie, is assessing her situation. Tatiana's financial history includes a challenging period at age 24 when she was divorced and raising two children without financial support from her ex-husband. She now has more than enough savings and investments to meet her goals, but her concerns about running out of money persist. The planner's forecast projects a steady income from her pensions and Old Age Security (OAS) benefits, with a total of $81,720 annually, indexed to inflation. By 2027, her annual cash outflow is estimated to be around $95,000, including taxes and a TFSA contribution. Any cash-flow shortfall will be covered by her non-registered investment portfolio. The planner advises Tatiana to use funds from her high-interest savings account to contribute to her TFSA each year. Considering her life expectancy, delaying CPP until age 70 could provide a higher benefit, but the planner suggests taking it at 65 as planned. Tatiana's desire to buy a small house instead of her condo is discussed, but it won't significantly impact her financial plan. The planner also suggests that selling her home and moving to a retirement home could provide a comfortable retirement, with proceeds and pension income ensuring a secure future. Tatiana's investments, primarily in high-interest savings accounts and mutual funds, are under review, with the planner recommending she seek a performance report to assess her financial advisor's value. As Tatiana's financial situation evolves, regular updates to her financial plan are essential to ensure she stays on track to achieve her retirement goals.
