The good news is that she has significant assets, which will have to be harnessed to fund her retirement
Solution: Cut expenses now, sell house, buy condo, invest difference and raise future income
Paying off her 30-year mortgage is a good defensive strategy. She is paying 2.7 per cent now. When the mortgage comes up for renewal in the fall of 2023, rates are likely to be higher. Paying off the mortgage by sale of the house and downsizing makes sense given that her children will have left home by then.
Jackie’s TFSA has a balance of $61,237. If she adds $6,000 per year for the next 13 years and it grows at 3 per cent after inflation, it will become $186,446. Spent over the next 35 years with the same 3 per cent real return it would support payments of $9,235 per year.
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