Louis already is dipping into savings to support his spending
The baseline for Louis’ plans is his present wealth. His financial assets were $3.6 million before the COVID-19 crisis. We’ll use a recent value of $2,984,800. Strip out his $600,000 house, the $104,000 RESP for the kids and his $4,000 car and Louis has $2,276,800 in personal financial assets.
2) Sell his $600,000 Quebec house and use the proceeds to buy a $600,000 house in Florida. He would then rent a house or other dwelling in Quebec at what he estimates would be $2,500 per month. If he does that, he would have to reduce other discretionary expenses by a similar amount to keep his spending steady. If he does not, he would slash his capital quickly.
4) Rent in Florida. A house with a cost of $2,500 per month for seasonal rent including utilities would take $30,000 per year. All that would require about $43,000 of income taxed at a 30 per cent average tax rate. Louis expects a Quebec Pension Plan benefit of $8,867 at 65. He can also expect about $10,600 per year from his TFSA, if it is allowed to grow with $6,000 annual contributions until his age 65, and is then annuitized for 30 years. He would receive Old Age Security at a present rate of $7,362 per year. That only adds up to about $118,000, before tax.Article content continued
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