Wealthy on paper, couple with $2.9 million in assets needs to sell a property to finance retirement

Situation: Couple has two houses, modest financial assets and no company pensions

Solution: Sell city house, pay debts, buy condo until wife’s retirement, move to the cottage

A couple we’ll call Fred and Felicity, both 60, live in British Columbia. Fred retired a few years ago from a job in publishing. Felicity does seasonal administrative work. She brings home $3,000 per month for nine months of the year and then draws Employment Insurance at $1,900 per month for the other three months.

On paper the couple is wealthy. The roaring B.C. property market values their home at $2 million and their rural cottage at $650,000. That’s 6.4 times their $414,000 total financial assets including cash. There is only one liability — a $150,000 mortgage on the cottage. Their net worth is thus $2.9 million. But their incomes are modest and they face a retirement that, they fear, will be pinched. The solution: turn some of their pricey property into cash. But which property should go?

(Email [email protected] for a free Family Finance analysis.)

Family Finance asked Eliott Einarson, a financial planner in the Winnipeg office of Ottawa-based fund manager Exponent Investment Management, to develop a strategy for unlocking their property wealth.

You might also like More from author

Leave A Reply

Your email address will not be published.