can you solve the questionYou are a financial planner and have clients Tom and Sara. They have no firm plans yet to retire from their well$-$paying jobs in the health care sector, but they do have some questions about their financial future. Tom is $57,$ Sara is $51.$ They have one child, age $15,$ and a mortgage$-$free house in a desirable part of southern Ontario.

Tom earns $$118,000$ a year and is a member of a defined benefit pension plan. Sara makes $$75,000$ a year and contributes to a group registered retirement savings plan $($RRSP$)$ at work. They$$d like an assessment of their retirement readiness by the time Tom turns $60,$ the earliest age at which he can get an unreduced pension. He may decide to work longer. Sara plans to retire at the same time as Tom.

Do$-$it$-$yourself investors, Tom and Sara have built a substantial investment portfolio mainly of dividend$-$paying, blue$-$chip stocks. After they leave the work force, they would like to use their investment income for their living expenses and ideally never touch the principal.

They ask how to co$-$ordinate the drawdown of their registered accounts with the collection of government benefits. As well, they wonder what steps could be taken to preserve their estate for their son in the event they pass away while he is still young. They are both in good health.

Their retirement spending goal is $$130,000$ a year after tax $($other financial data is below$).$ They want a financial plan and advice given the above information.

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Monthly net income: $$11,035.$

Assets: Cash in bank $$30,000$; joint investment account $$900,200$; locked in retirement accounts $$302,200$; RRSPs $$863,200$; TFSAs $$260,000$; registered education savings plan $$53,000$; residence $$1-$million. Total: $$3\mathrm{.}4-$million.

Estimated present value of his DB pension $$1-$million. This is what a person with no pension would have to save to generate the same income.

Monthly outlays: Property tax $$300$; water, sewer, garbage $$100$; home insurance $$100$; electricity $$140$; heating $$200$; maintenance, garden $$150$; vehicle lease $$950$; transportation $$800$; groceries $$600$; clothing $$100$; gifts $$100$; charity $$450$; vacation, travel $$1,200$; other discretionary $$200$; dining, drinks, entertainment $$500$; personal care $$50$; club memberships $$100$; pets $$50$; sports, hobbies $$100$; subscriptions $$20$; other personal $$200$; disability insurance $$100$; phones, TV$,$ internet $$260$; RRSPs $$600$; TFSAs $$1,085.$ Total: $$8,455.$ Surplus goes mainly to saving.

Liabilities: None.Financial Planning for Tom and Sara: A Comprehensive Overview