When her oil employer’s stock plummeted, so did this Alberta woman’s retirement plans

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Currently, Lucy is saving $ 1,767 per month. When his retirement bridge ends at age 65, his retirement will drop by $ 600 per month and will be replaced by OAS which has a current payout rate of $ 614 per month. This will keep her non-CPP pensions at around $ 3,700 for life. He plans to take the CPP later this year, adding $ 731 a month before tax to his income.

Lucy’s net worth currently consists primarily of $ 6,000 in savings, $ 30,000 in her TFSA, and $ 156,000 in RRSP. It has a $ 5,000 line of credit. His car is worth an estimated $ 5,000. Its financial assets amount to $ 192,000, not including the cash value of its permanent life insurance, which is valued at $ 70,000. If he were to retire by the end of the year and pay off his line of credit with cash and swap his old car for a new $ 30,000 model with his TFSA money, his net worth other than life insurance would be. $ 157,000, which is almost the value of his RRSP.

Retirement finance

If Lucy works part-time at least 60 to 65, her RRSP balance could grow 3% after inflation to $ 180,850 with no new contributions. That capital with the same growth rate could then generate $ 8,958 per year before tax for the next 30 years.

It could also delay the start of CPP from 60 to 65 and receive an increase in payments from $ 730 per month, which is the 65-year payment cut by 36% for an early start, to $ 1,140 per month or $ 13,680 per month. year. Those changes would increase his income to $ 8,958 RRSP, $ 7,362 OAS, and $ 37,200 corporate pension for a total taxable income of $ 67,200 before tax. After an average fee of 20%, he would have $ 4,480 per month to spend.