Alberta couple, with no company pensions, could save $14,000 a year by ditching the mutual funds and hiring a portfolio manager

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Their wealth is in their house, RRSPs and TFSAs

Solution: Downsize house, pay debts, stop child’s university subsidy, cut investment fees

Family Finance asked Eliott Einarson, a financial planner who heads the Winnipeg office of Ottawa-based Exponent Investment Management Ltd., to work with Harry and Bonnie. $105,000 could be added to their $34,000 balance of TFSAs to raise them to the 2020 limit of $69,500 each. With no further contributions, the sum would rise to $151,900 in 2020 dollars in three years assuming growth at three per cent per year after inflation. That sum would generate $580 per month or $6,978 per year at three per cent after inflation for 34 years starting in three years to Bonnie’s age 95 to exhaust all capital and income.

Bonnie has an RRSP with a value of $238,000. In three years with no further contributions, the account can grow to $260,075 in 2020 dollars and a three per cent return after inflation. It would then be able to pay $11,950 per year for 34 years to her age 95. Harry’s $646,000 RRSP, with the same three per cent return assumption would grow to $705,900 in three years. It would then be able to pay $32,430 per year to her age 95.

When BonnIe turns 65, she would add her $7,362 OAS and her $5,700 CPP, both at annual rates. Income would rise to $85,727. With splits of eligible income and TFSA cash flow removed, they would pay tax at an average rate of 15 per cent and, with TFSA cash-flow restored, they would have $6,160 per month to spend. They could accrue $1,600 a month in special savings and have their annual travel splurge.

 

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And ... it is gone!

Where would this portfolio manager reside? Ontario? Lmao

Or just go with index fund or etf and not pay the fees.

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