So far, Jerry and Kathy have concentrated on debt reduction rather than accretive investing in individual stocks or ETFs and mutual funds. Their portfolio is relatively illiquid, with much of their net worth tied up in the two rental properties and the civil service pension income that will not be available for a couple of decades.Article contentFamily Finance asked Owen Winkelmolen, head of Planeasy.ca, an advice-only financial planning firm based in London, Ont., to work with Jerry and Kathy.
First — the kids. Jerry and Kathy add $458 per month to RESPs with a present balance of $94,000. That attracts the Canada Education Savings Grant bonus of the lesser of $500 or 20 per cent of contributions with a cap of $7,200 per beneficiary. That makes total contributions $6,595 per year and the sum of all past and future contributions $126,975 in five years.
Building a secure retirement is going to take a change in savings and investment strategy, Winkelmolen reasons. The couple’s main investments at present are two rentals. The mortgages will not be paid off until Jerry and Kathy are 72, which is 17 years after their present retirement date target. With the mortgages still absorbing rental income, it would be a good idea to sell them.
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