Alistair and Teresa Murphy emigrated from Wales to Canada $35$ years ago. They were $29$ and $24$ respectively at the time, and recently married. When they left, Alistair had been working as an electrician for $11$ years, while Teresa had been a nurse for four years.

Upon arriving in Canada, Alistair continued to work as an electrician, while Teresa joined the local hospital as a nurse. During their time in Canada, the Murphys had three children, each of them born almost two years apart. Teresa took the maximum maternity leave when each child was born. After her third, she decided to work part$-$time until the youngest was six.

Ten years ago, Alistair was in a car accident while travelling to a customer$$s place of business. He was off work for almost two years. During his absence$,$ he received workers$$ compensation benefits.

Three years ago, when Teresa was $56,$ she was diagnosed with breast cancer. Although she has been in remission since completing her treatment, she has been suffering from depression and off work for the last two years. In addition to collecting long$-$term disability payments from her group insurance plan, Teresa was recently approved to receive the maximum Canada Pension Plan $($CPP$)$ disability benefit, which places her in the lowest income tax bracket. Teresa does not expect to return to work. Her workplace disability benefits will be replaced by her employer pension at age $60.$

Alistair, now $64,$ wants to begin working part$-$time so that he can take Teresa to her medical appointments, travel back to Wales to spend time with his $92-$year$-$old mother, and enjoy time with his grandchildren. While Alistair is healthy and leads a healthy lifestyle, he has seen first$-$hand that enjoying time with family is important, in light of Teresa$$s depression and his father$$s fatal heart attack at $67.$

The couple wants to be confident that their income and assets will be sufficient to meet their future needs. Alistair and Teresa also have an emergency fund to fall back on if their medical expenses increase. They want to know when they should apply for the CPP retirement pension and Old Age Security $($OAS$)$ pension. Neither will be impacted by the OAS recovery tax and Alistair expects to be in a higher income tax bracket than Teresa throughout their retirement.

Alistair has still not applied for CPP$.$ Both, want to know what to do next and how their retirement will be funded.

Alistair$$s projected CPP $80\%.$

Teresa$$s projected DB Pension $$1,800/$mo $($gross$)$

Simplified cash flow and net worth report for Alistair and Teresa based on the information provided:

Cash Flow Report $($Monthly$)$:

Income Amount

Alistair's Part$-$time Work $$1,500($net$)$

Company Disability Benefits $($Teresa$)$ $$1000($net$)$

Total Income $$2,500$

Expenses Amount

Mortgage$/$Rent $-$$$1,200$

Utilities $-$$$500$

Groceries $-$$$600$

Healthcare expenses $($Teresa$)-$$$200$

Transportation $-$$$300$

Entertainment $-$$$100$

Miscellaneous $-$$$100$

Total Expenses $-$$$3000$

$|$ Cash Flow $|(-$$$500)|$

Net Worth Report:

Assets Amount

Savings$/$Chequing $$15,000$

Retirement RRSP $($Teresa$)$ $$50,000$

Retirement RRSP $($Alistair$)$ $$250,000$

Home Value $$350,000$

Total Assets $$665,000$

Liabilities Amount

Mortgage $-$$$100,000$

Total Liabilities $-$$$100,000$

$|$ Net Worth $|$ $$565,000|$

If Alistair$$s car accident had of been on a weekend while driving to a movie would he still have been covered by workers compensation?

What are the requirements to qualify for CPP disability benefit?

Will Alistair & Allison qualify for $100\%$ OAS? Can they defer OAS?

Determine their retirement income.