Try dreaming about retirement

Bonnie plans to finish her career as a medical sales executive in around five years. Her retirement goal is to begin traveling extensively, starting with a family visit to Ireland, and then several back-to-back cruises in various parts of the world. Her pension, which starts at 65 along with her CPP and OAS will be her only income. She also has non-registered investments worth approximately $250K. Bonnie’s biggest concern is whether she has enough income to support her annual trips as well as support her into her ‘90s.

Bonnie deposited $50K on a pre-build condo in Maple Ridge which will be completed in the summer of 2026. After completion, Bonnie is considering moving to Maple Ridge and renting out her Ladner 2-bedroom condo for income.

Will this strategy generate more income for Bonnie? I suggested she use the D-R-E-A-M approach to build a sustainable retirement income plan.

5 Key Retirement D-R-E-A-M Questions 

D: Determine monthly cash flow targets: How much cash flow (monthly, after-tax target) does she need? Answer: Bonnie will need around $6000 per month to meet her spending needs.

R: Review income-producing assets: What income-producing assets does she have available to deliver that cash flow? Answer: Her investment portfolio of $250,000.

E: Establish tax-efficient delivery: How do we deliver the cash flow needed on a tax-efficient basis over the long term? Answer: I suggested Bonnie invest her $250K in a T-Class program which is primarily made up of return-of-capital (ROC), making withdrawals non-taxable.

A: Assess long-term plan sustainability: Is the plan to deliver that cash flow sustainable throughout her retirement? Answer: Yes. Once the ROC is depleted at age 80, Bonnie can start to withdraw funds as needed from her investments which will be treated as a capital gain.

M: Manage investments for the long run: How would we invest Bonnie’s income-producing assets? Answer: Her pension, CPP, and OAS will generate around $5000 per month, leaving a shortfall of around $1000. A T-Class program paying an annual 5% will generate the extra $1000 Bonnie needs to book those annual month-long Princess cruises she has her eye on.

Retirement Dreams can come true

After asking Bonnie the 5 key Retirement D-R-E-A-M questions, we quickly realized that she would be able to generate the $6000 she needs each month without having to rent out her Ladner condo. Also, after some market research and cost estimates, it became obvious that she would not be able to receive the rent required to cover the mortgage payments, insurance, tax, and maintenance required. For Bonnie, it makes sense to sell her Ladner condo and pay off the balance owed on her new purchase in Maple Ridge.

Unsure about your retirement income? As Aerosmith would say, ‘Dream on...dream on’ – try the D-R-E-A-M approach!