“Retiring to the Sun: A Financial Plan for a Blended Family”

The goal of Johanne, 57, and André, 61? Retire in two years and live in the sun four months a year as long as their health allows.

Between them, they have three children from previous unions, who are in their twenties and have left the family nest. The couple would now like to retire peacefully, enjoy life and spend the winters in Mexico. They also want to put their finances in order and see to their estate planning, which can be a challenge in a blended family.

Johanne has a TFSA and RRSPs, and she can count on a pension from her employer of $40,000 per year, indexed. She is also co-owner with her spouse of a house worth $700,000 for which her share of the mortgage is $62,000.

André has a TFSA and RRSPs, as well as a locked-in retirement account (LIRA) from a former employer. In addition to his share of the family home and the mortgage attached to it, he owns a duplex worth $950,000 for which he still owes a mortgage of $216,000.

In terms of income, they are aiming for $80,000 net per year until Johanne turns 75 and $65,000 thereafter. Will they have the means to carry out their project? Here is what their financial security advisor, Jean-François Rémillard, of Séquito Wealth Management, offered them.

Maximize and clean up

First, the advisor recommended that they use part of their liquid assets ($12,000 for Johanne and $31,000 for André) to contribute to their RRSPs or maximize their TFSAs.

“Although it may give a sense of security, it is not necessary to keep so much money in an account. Currently, Québec savings bonds, redeemable at any time, offer a yield of 4%. It’s time to take advantage of it,” says Jean-François Rémillard.

Before retiring, a good idea would also be to contribute $5,000 (the maximum) each year to a labour-sponsored fund to maximize the tax return, and put the excess in their RRSPs.

Jean-François Rémillard also suggested that they clean up their investments, because they have too many advisers. It would be to their advantage to group them together with one person, who would be in a way the orchestra conductor of their retirement planning.

“By multiplying the advisers, we can end up being confused by the multitude of recommendations”, he underlines.

Sell ​​the duplex

André has kept his duplex for his children, but they have finished their studies and do not live there. Gross rental income from this building is $48,000, and $24,000 after expenses and taxes. “A sale would probably be better for André, especially if he wants to offload the maintenance because he wants to live in Mexico for several months a year,” notes the advisor.

Once the sale is complete, he should be able to pocket $585,000 net after taxes and other fees. By investing this sum at an interest rate of 4%, he could derive an income of $23,400, which is almost the same as keeping the duplex, but with less worries!

The money from the sale should be used to maximize his TFSA, then pay off the mortgage on the family home and invest in a non-registered investment account. “Corporate class funds are tax efficient and can be disbursed over time,” says Jean-François Rémillard.

Retirement Simulation

The advisor simulated retirement with average returns of 5% on investments and 4% for TFSAs. The QPP and the Old Age Security Pension were requested by the couple when they turned 65, and the inflation rate indexed at 2.25%. “By maintaining the pace of life at $80,000 net until Johanne turns 75, between them they will have $200,000 left in registered investments, $400,000 in TFSAs and $400,000 in non-registered ones. Considering that their income will be $65,000 from then on and that Johanne will live to age 90 and André 94, they would still have $100,000 in registered and more than $800,000 in TFSA at their disposal,” says Jean-Francois Remillard.

Their financial situation


  • Cash: $12,000
  • BACK: $28,000
  • FAMILY: $62,000
  • Family home: $350,000
  • Total : 452 000$
  • Family home mortgage: $62,000


  • Cash: $31,000
  • BACK: $24,000
  • FAMILY: 333 000 $
  • Family home + duplex: $1,300,000
  • Family home mortgage: $62,000
  • Condo mortgage: $216,000

➞ Net worth: $390,000 Net worth: $1,410,000


To avoid conflicts at the time of death, they could take out life insurance for the benefit of their respective children. On the death of André or Johanne, the surviving spouse would receive the entire bequest of the house, and the children, the life insurance premium to compensate.

Is it possible to retire at 60 and live in the sun four months a year?

2023-05-29 23:31:34

#retire #live #sun #months #year