{"id":944231,"date":"2026-10-24T07:30:14","date_gmt":"2026-10-24T07:30:14","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/944231\/"},"modified":"2026-10-24T07:30:14","modified_gmt":"2026-10-24T07:30:14","slug":"can-matt-53-and-mary-50-retire-early-and-buy-a-cottage","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/944231\/","title":{"rendered":"Can Matt, 53, and Mary, 50, retire early and buy a cottage?"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

Matt, 53, has achieved his goal of retiring early with a comfortable lifestyle and his wife Mary, 50, would like to join him soon.Galit Rodan\/The Globe and Mail<\/p>\n

At 53 years old, Matt has achieved his goal of retiring<\/a> early with a comfortable lifestyle. His wife Mary, who is 50, would like to join him before year end. She\u2019ll be leaving behind a technical consulting job paying $148,000 a year.<\/p>\n

The couple have a mortgage-free house valued at $2.7-million in the Greater Toronto Area and three children aged 19, 16 and 15.<\/p>\n

They have about $1.4-million in personal investments, all held in registered accounts, and Matt has another $289,000 in his corporation. In addition, Matt owns several properties in Florida worth $3.5-million gross, with $885,000 of associated debt. The properties generate positive cash flow. <\/p>\n

He also gets $57,600 a year in investment income.<\/p>\n

Their goals include paying for their children\u2019s higher education, giving the children $100,000 each toward a home purchase, travelling and maybe buying a cottage.<\/p>\n

They ask if they can maintain their standard of living if Mary retires now.<\/p>\n

We asked Matthew Ardrey, a portfolio manager and senior financial planner at TriDelta Private Wealth in Toronto, to look at Matt and Mary\u2019s situation.<\/p>\n

Herman, 60, has a net worth of more than $3-million. How much can he spend each year in retirement?<\/a><\/p>\n

What the expert says<\/p>\n

Most of their registered investments are in Mary\u2019s name, Mr. Ardrey says. Matt\u2019s investments are mainly in a portfolio of rental properties that he has owned for quite some time. This has led to large, embedded capital gains. <\/p>\n

\u201cMatt noted he would be willing to sell these if needed,\u201d the planner says. Matt\u2019s properties net $120,000 a year after expenses and debt repayment.<\/p>\n

Mary contributes 4 per cent of her income to a registered retirement savings plan each year, with a matching contribution from her employer. This is their only savings. The contributions stop when Mary retires.<\/p>\n

They are spending about $18,000 a month, an amount that will drop to $12,550 in 2029 when several kids\u2019 expenses such as hockey are finished, Mr. Ardrey says. They also want to have a travel budget of $20,000 per year for the next 10 years and to help each child with $100,000 toward a home purchase. \u201cThis is assumed to happen at the child\u2019s age 25.\u201d<\/p>\n

Both Mary and Matt plan to defer Canada Pension Plan<\/a> and Old Age Security benefits to age 70. \u201cBecause they both have limited CPP contributions due to early retirement, we assume their CPP will be less than the maximum,\u201d the planner says. \u201cBased on the numbers provided by Matt, we assume both will be entitled to 53 per cent of the maximum.\u201d<\/p>\n

Should Reba, 63, tweak her portfolio to bolster her retirement goals?<\/a><\/p>\n

Matt\u2019s corporation will be able to provide a continuing income stream of $1,500 a month until he is 84; the final payout will come the next year, Mr. Ardrey says.<\/p>\n

Their investment portfolio is highly concentrated. It is almost 100 per cent in Canadian bank stocks, with 76.6 per cent in a single bank stock. \u201cThis is a material risk to their plan,\u201d he notes. \u201cThey need to diversify by asset class, sector and geographic region. We have assumed that they move to a balanced portfolio after Mary retires.\u201d<\/p>\n

For this plan to succeed, Matt will have to sell a rental property in 2032, 2040, 2045 and 2067, Mr. Ardrey says. This will be to cover shortfalls. \u201cIf he does so, they will be able to meet their primary retirement goal,\u201d the planner says.<\/p>\n

\u201cTo truly understand the risk in this plan, we need to move beyond the straight-line projection because life and investments rarely ever move in a straight line,\u201d he says. \u201cTo ensure the viability of this plan, we stress test it by using a Monte Carlo simulation.\u201d A Monte Carlo simulation introduces randomness to a number of factors including returns to stress test the success of a retirement plan.<\/p>\n

Bob and Mavis, both 75, donate $300,000 a year to charity. Who should help them with their financial planning?<\/a><\/p>\n

\u201cIn this plan, we have run 1,000 iterations with the financial planning software to get the results. We look at the 75 per cent and 50 per cent levels to determine where risk due to return rate variance may affect the success of the plan.\u201d<\/p>\n

In the couple\u2019s volatility stress test, the lowest probability of success is in 2066 at 54 per cent. \u201cThis is very close the failure level of 50 per cent.\u201d Though this is different from most plans where the shortfall is right at the end, it shows the continuing need to convert real estate into liquid investment assets to fund lifestyle, Mr. Ardrey says. \u201cThis is why the property sales are central to the plan and not a fallback.\u201d<\/p>\n

Matt and Mary also wanted to look at a scenario in which they bought a cottage for $1.4-million. \u201cThis will not work.\u201d The shortfalls would start when Matt is 60. \u201cThe high taxes due to capital gains and the debt repayment make this scenario unworkable.\u201d<\/p>\n

If they focus on their primary retirement goal, work on fixing the risks in their investment plan and engage in continuing planning through retirement, they will be able to make the dream of early retirement work for them both, Mr. Ardrey says.<\/p>\n

Can Moira, 57, retire in three years and still leave an inheritance for her kids?<\/a><\/p>\n

They should also look into diversifying the types of accounts they are using to invest. Registered retirement accounts are good for immediate tax savings, but lack the flexibility of a tax-free savings account for withdrawals in retirement. Any retirement surpluses should be saved first into their TFSAs.<\/p>\n

\u201cAlthough outside the scope of this engagement, we note they do not have Wills or Powers of Attorney,\u201d the planner says. \u201cThis is a huge risk given the size of their net worth and it needs to be addressed immediately.\u201d Because Matt owns property in Florida, the cross-border ownership and estate structure should be reviewed as well.<\/p>\n

Even though the outlook shows that they can meet their primary goals \u2013 provided the properties are sold as planned \u2013 this plan should not be treated as finished, Mr. Ardrey says. \u201cIt rests on today\u2019s markets, tax rules and priorities, and all of those will change.\u201d <\/p>\n

Reviewing it at least once a year lets them compare it with what has actually happened and adjust for changes in income, spending or family needs. \u201cThe plan will only stay useful if it is kept up as their lives change.\u201d<\/p>\n

How soon can Simon, 49, and Samantha, 45, retire?<\/a><\/p>\n

Client situation<\/p>\n

The people: Matt, 53, Mary, 50, and their three children, 15, 16 and 19.<\/p>\n

The problem: Can Mary retire now without jeopardizing their other goals? Can they buy a cottage?<\/p>\n

The plan: Be prepared to sell properties to cover shortfalls. Diversify investments. Take advantage of TFSAs. Forget about the cottage.<\/p>\n

The payoff: A realistic look at how to meet their spending goals over time. <\/p>\n

(Income, expenses, assets and liabilities provided by the applicants.)<\/p>\n

Monthly after-tax income: $20,665.<\/p>\n

Assets: Bank $5,000; his corporate account $289,000; his spousal RRSP $237,000; her RRSP $1,250,000; her locked-in retirement account $157,000; registered education savings plan $390,000; residence $2,700,000; his investment properties $3,500,000. Total: $8.5-million.<\/p>\n

Monthly outlays: Property tax $835; water, sewer, garbage $200; home insurance $300; electricity and heating $500; security $35; maintenance $665; garden $170; car lease $600; car insurance $405; fuel $1,200; oil, maintenance $585; groceries $3,000; clothing $960; gifts, charity $515; vacation, travel $1,165; dining, drinks, entertainment $700; personal care $200; club memberships $500; sports, hobbies, including kids\u2019 hockey $4,250; subscriptions $100; doctors, dentists $165; prescriptions $85; drugstore $85; health, dental insurance $100; life insurance $110; phones $300; TV $240; her pension plan contributions $495. Total: $18,465.<\/p>\n

Liabilities: Mortgages on investment properties $895,000.<\/p>\n

Want a free financial facelift? E-mail finfacelift@pm.me<\/a>.<\/p>\n

Some details may be changed to protect the privacy of the people profiled.<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: Matt, 53, has achieved his goal of retiring early with a comfortable lifestyle…\n","protected":false},"author":2,"featured_media":944232,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[45,49,48,7325],"class_list":["post-944231","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-business","tag-ca","tag-canada","tag-financialfacelift"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/944231","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=944231"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/944231\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/944232"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=944231"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=944231"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=944231"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}