Retirement Your Way®| Retirement Your Way® |
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Case Study 7: Unprepared and confident Martin Blanchard is a 61 year-old salesman for a local radio station. At this point in his career he has begun to think seriously about his life after he leaves his present position. While he likes his job, lately he has found that the stress of working every day on commission is taking its toll. At some point, he recognizes that he will have to make some changes in his work situation. Retirement isn't really an option in Martin's mind. Not only does he still feel that he can make a contribution, but he is also aware that he hasn't put enough money aside in his RRSP to walk away from the workplace. In addition, Martin and his wife Janet depend on his ability to generate an income. While the Blanchards enjoy a good life style from his six-figure income, they also know that present lifestyle is coming at a cost. Should anything happen to Martin, the couples lifestyle and future outlook will be severely compromised. Like many Canadians, the Blanchards are optimistic about the future and yet unprepared to face the challenges that they may face over the next few years. Martin is very good at what he does, but his search for the elusive big payday that he hopes will pay for his retirement is running up against the clock. Their financial situation The picture is not all bleak. Martin and Janet have been determined over the years to pay down their mortgage as much as possible. “It's the one thing that I have insisted on”, notes Janet. “I enjoy our travel and the things that we have purchased, but I am very concerned about having the security of owning our own home.” The Blanchard house could provide the couple with equity of over $400,000. In addition, Martin's RRSP currently has $125,000 in mutual funds with the Bank of Montreal. Janet also has a small spousal RRSP of under $50,000 in GICs at the Bank. In addition, Martin has a small brokerage account elsewhere of about $35,000 that he uses to play stock tips. Unfortunately, Martin and Janet's credit cards continue to run close to their limits. The demands of Martin's job and the couple's lifestyle have forced them to use their cards and their line of credit to smooth out the ups-and-downs of Martin's income. The couple's current non-deductible debt is over $20,000. Martin is well-insured. Not only does he have a disability package at work, but he also carries an insurance policy through the company in addition to policies that he has held for the past twenty years. In total, his current policies have a death benefit of over $1 million. Their Family The Blanchards are empty nesters. Their youngest daughter moved out last year at age 22. Three other adult children are married with families of their own and live elsewhere in Canada. In fact, Janet is looking forward to the birth of a new grandchild and has already made plans to spend time helping out her daughter-in-law. Of greater concern to Janet is the health of her mother, 90. She is currently in a nursing home but is growing increasingly forgetful. Thankfully, Janet's mother is in good shape financially and Janet can afford the extra nursing help that she may need in the future. Their concerns about the future
What needs to be thought out The Blanchards must begin to face their long-term goals, and create a plan that would satisfy unforeseen setbacks. The following will give you a sense of the types of considerations that would be addressed when Margaret meets with a BMO Investment Representative:
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