ARGH!
They want to retire at a average age of 60, 10 years from now.
To fund their gap until age 65, they would need approx $405k saved up to spend down over 5 years (assuming 20% net tax, and they put it all into a cash savings account at age 59/61). (Sandy's pension starts at age 59)
Then at age 65, they take full CPP and pension, and pull the remaining $2k (approx) gap from their RRSPs.
From age 65 on, using 4% rule, (And assuming an average tax rate of 20% on the whole thing).. and their need of $24k per year to cover the diffeence, they will need $750k starting at age 65 to fund $24k per year...
Total needed: $405k at age 60 and $750k at age 65; 4% interest. == $1.125 M at age 60 is needed.
Without saving any more money, their current $720k, at 4% growth net of inflation and using the article's rate, will be worth $1.065M at age 60. Their gap is about $60k and they have 10 years to save this, while working two incomes with no mortgage. They are set!! No need to look at selling property in their 80's except to buy something very expensive.
--- I used 20% taxes because I assume that the investments are in both names to allow income splitting. If so, and they only want $6500 per month together, then the OAS clawback is not a factor...but being strategic about TFSA withdrawals is always preferred, they should definitely take the first $40k of income, each, from RRSP's starting at age 59/61 ----
