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Case Studies


Rob & Stacey

Starting to Get Serious About Saving

On the surface, Rob and Stacey seemed to have it all: well-paying jobs, two beautiful children and a newly renovated home in a desirable neighborhood. But after scratching the surface, things weren't quite what they seemed. With two young children, Rob worried that his insurance coverage from work—a mere two times salary—just wouldn't stretch far enough should something happen to him. Stacey, on the other hand, was more concerned that they were slaves to a large home equity loan at the expense of funding their retirement and children's educations. Both wanted to save more, but just weren't sure where to come up with the money when every dime seemed accounted for.

When we sat down with Rob and Stacey, the discussion centered around prioritizing their goals. They were shocked to learn that $1 million in life insurance—which sounds like a large sum—typically generates just $50,000 annually. Clearly, their existing coverage was inadequate. At the same time, a quick calculation revealed that if they continued on their current savings path, their RRSPs would be insufficient to fund a 30 year retirement.

But it wasn't enough just to educate Rob and Stacey about the potential shortfalls. We needed to show them where they could find cash to redirect towards their long-term goals.

Consolidating mortgage and credit card debt at a lower rate reduced their monthly debt service by about $500. A portion of this was diverted to a fund increasing RRSP contributions. Another portion was used to insulate their portfolio by topping-off their insurance coverage. We also agreed to meet in six to nine months time to revisit the RESPs. Rob and Stacey were both due for an increase at work and were committed to directing this increase towards funding a portion of their children's college tuitions.

In the end, Rob and Stacey felt much more confident about their overall financial health—they had set up specific goals, understood their current situation much better and had charted a course to a more secure future.

David & Maureen

Nervous Pre-Retirees

Dave and Maureen's plan was to sell the business they had worked so hard to create and use the proceeds as a retirement nest egg. Together with their decent RRSP savings, they felt they would have enough to fund a comfortable, well-deserved retirement. But recently, market volatility had taken a big bite out of their investments and a shaky economy spelled trouble for their business. Suddenly they were faced with the prospect of having to delay retirement and rethink their strategy—a turn of events that left them anxious and losing sleep.

When we met, Dave and Maureen explained how uncomfortable they felt about not having a set amount of money they knew they could depend on in retirement. Would they outlive their money someday? If the market continued its plunge, would they even have enough to pay the bills next year?

Dave and Maureen's situation is not uncommon. With traditional pensions nearly extinct, most people today are faced with an “undefined benefit plan”. And while it's important to take a long-term view when it comes to market volatility, there's no doubt that people who depend on drawing an income from their investments are more vulnerable to short-term market swings.

We advised Dave and Maureen to take a portion of their RRSP savings and invest in a strategy that would offer guaranteed income for life. There are several options today that offer the opportunity to participate in the market's growth while ensuring you never lose the money you invest. With this guarantee at the core, Dave and Maureen could build other strategies around it and feel more secure about their nest egg and their future.

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