Martin and Hannah's dreams of financial independence have finally taken shape – a $3.4 million net worth, with $2 million in liquid assets, at the age of 60. They live in Toronto, Ontario and would be retiring here as well. The question is not just when they can retire but also how much they can comfortably spend in their retirement.

In this video, we discuss the details of their financial landscape, dissecting their goals, income sources, and expenditures. I’ll walk through the key steps that Martin and Hannah, or anyone in a similar situation, should consider when planning for a secure and fulfilling retirement.

Defining Retirement Goals - By exploring different scenarios, we unearth the flexibility to retire earlier or later, aligning with their preferences.

Estimating Living Expenses - To determine their financial needs, we constructed a detailed budget, which revealed an average monthly spending projection of $6,000 throughout retirement.

Planning for Healthcare Costs - By addressing potential out-of-pocket expenses which is not covered by OHIP, we create a comprehensive plan that ensures their health needs are adequately covered.

Incorporating Specific Goals - Beyond basic living expenses, Martin and Hannah share specific goals. Each goal is considered in the financial plan, providing a holistic view of their aspirations.

Analyzing Income Streams - By analyzing Martin and Hannah’s salary income, government benefits like CPP and OAS, and contributions to retirement accounts, we paint a picture of their financial landscape.

Projecting Portfolio Growth - With a 5% annualized growth rate. We are using inflation rate of return of 2.1% and life expectancy of age 95 for both.

Assessing Withdrawal Rates - By carefully calculating the percentage of their portfolio they plan to withdraw annually, we ensure that their spending aligns with a sustainable approach.

Exploring Alternative Scenarios - The beauty of financial planning lies in adaptability. We explore alternative scenarios, offering a comprehensive view of Martin and Hannah’s financial journey and empowering them to make informed decisions aligned with their values.

Ultimately, their financial plan serves as a compass, guiding Martin and Hannah toward a retirement that aligns with their unique vision. There are shifts towards intentional living, prompting discussions on work preferences, generosity towards family, and the freedom to explore new adventures.

Financial planning is a dynamic, personalized journey. It's about embracing the possibilities, aligning financial decisions with personal values, and navigating toward a retirement that reflects the life you've envisioned.

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