Finance your retirement in motorized

In a few months, Alexandre will be 60 years old and will retire. For example, With his wife, they have already bought a motorized and wish to spend their winters in the sun.

Our reader wonders if he could withdraw an additional amount from his RRSP each month to give himself a. Furthermore, greater room for maneuver. Therefore, “I assess this amount between $ 400 and $ 700. Meanwhile, What would be the difference for my retirement plan? Therefore, ”, He writes to us.

Her spouse, also 60, already receives a Rregop pension fund, but has no savings. Moreover, For his part, Alexandre has accumulated about $ 120,000 in RRSP and he holds an emergency fund of $ 60,000 in a CELI.

They also own a house worth $ 300. Therefore, 000, with a margin of mortgage at variable finance your retirement motorized rate of $ 60,000 of which they only pay interest monthly.

Underestimated expenses

By learning about their detailed financial assessment. Therefore, Jean-François Rémillard, financial security advisor at the management of sequito wealth, first notes that several expenses were not mentioned, such as grocery store. “We often tend to underestimate real costs in order to maintain our lifestyle. We forget a crowd of “small” expenses that accumulate: house maintenance, replacement of the car, clothing, dental care, gifts, etc. ”, lists the advisor who specifies that in the end, that made the invoice of $ 30,000 annually increase, for a total of $ 70,000.

The couple’s income is still appreciable since his wife receives $ 5,400 from his pension fund, in more than $ 785 RRQ. Alexandre receives a surviving spouse’s pension of $ 1134 per month up to 65 years. At this age. he will then benefit from an increase of finance your retirement motorized $ 844 from his own RRQ, and will receive a maximum of $ 1433 per month. By his 65 years, to fill the shortfall, he will have to draw on his RRSPs. “As they will not be able to split their income before the age of 65. Alexandre would have the advantage of withdrawing more from RRSP as long as he is in a lower tax range, and to deposit the excess in his Celi,” recommends Jean-François Rémillard.

Reimburse the margin

The advisor first prepared a scenario where the reader withdrew $ 700 net per month from his RRSP. Considering yields of 5% for RRSP and 3% for Celi, savings would be exhausted at 83.

Since their mortgage margin costs around 6% per year in interest, Jean-François Rémillard recommends reimbursing it now. In doing so, the mortgage debt would be eliminated at 83 years old. “Instead of retaining inexpensive savings finance your retirement motorized in case. like a 3%CELI, it is preferable to maintain the margin of credit to zero and to draw sums if necessary,” he says.

The advisor reviewed the scenario by considering the reimbursement of the margin. a withdrawal of the RRSP of $ 400 per month, instead of $ 700. “This difference of $ 3. 600 less per year will allow them to maintain their lifestyle up to 95 years and they will even have a Celi of $ 55,000,” says Jean-François Rémillard.

Since spending should reduce a little over time. they will always benefit from the full value of their house, in this scenario, they will be able to fully benefit from their motorized retirement!

Finance your retirement motorized

Their situation

• The family: 90 000 $
• Employer’s pension fund: $ 30. 000
• Return: 60 000 $
• Maison: 300 000$
• Mortgage credit: $ 60,000
• RRQ finance your retirement motorized of the surviving spouse: $ 1135/month up to 65 years; RRQ maximum at 65 years old: $ 1433/month
• RRQ of the spouse (already taken): $ 785/month

Would you like to have the opinion of an expert for your retirement projects? Write a detailed message and we will submit your situation to a professional. The answer will then be published in The Montreal Journal et Le Journal de Québec.