Time to cull

A COUPLE SOON TO BE ON THEIR OWN MUST CUT DOWN ON THE NUMBER OF MUTUAL FUNDS THEY’RE IN BEFORE RETIRING

Mark and Eve Johnson* are soon to be empty nesters. The Ontario couple’s children, aged 22 and 24, currently live at home while they finish post-secondary educations, but within a year they will leave with degrees in hand for jobs and homes of their own. Mark and Eve, both 61, will be custodians no more and they will be able to spend less on food, clothes and myriad other things children require. Mark, formerly a factory manager, has been unemployed for nearly a quarter-century, choosing to be a stay-at-home father, and is effectively retired. Eve, a customer service manager in a local business, brings home $6,384 per month and is the family’s sole breadwinner. Their problem is whether their financial assets can carry them through retirement when Eve retires this year.

After Eve stops working, the couple will be entirely dependent on their savings, some of which they control directly and some of which is in Eve’s company defined-contribution pension plan, essentially an RRSPfor which they make investment decisions. Their financial assets add up to nearly $1 million and their expenses are relatively modest. They live in a 90- yearold semi-detached brick house that they have upgraded in the 25 years they’ve occupied it.