Jamie Lee and Ross, now 55 and still very active, have plenty of time on their hands now that the twins are away at college. They realize that time has just flown by since they married!

Looking back over the past years, they realize they have worked hard: Jamie Lee as the proprietor of a cupcake caf and Ross self-employed as a Web page designer. They have enjoyed raising their family and striven to make financially sound decisions. Now they are looking forward to a retirement that is just around the corner. They saved regularly and invested wisely over the years. They have rebounded nicely from the recent economic crisis, as they watched their investments closely and adjusted their strategies when they felt it necessary. They purchase vehicles with cash and do not carry credit card balances, choosing instead to use them for convenience only. The twins are pursuing their master's degrees and have tuition covered through work-study programs at the university.

Jamie Lee and Ross are just a few short years from realizing their goals of retiring at 65 and purchasing a home at the beach!

Current Financial Situation

1. Assets (Jamie Lee and Ross combined):
2. Chequing account: $8,500
3. Savings account: $53,000
4. Emergency fund savings account: $45,000
5. House: $475,000
6. TFSA Balance: $115,000
7. RRSP: $500,000 invested in diversified portfolio
8. Life insurance cash value: $125,000
9. Investments (stocks, bonds): $250,000
10. Car: $12,500 (Jamie Lee) and $16,000 (Ross)

• Liabilities (Jamie Lee and Ross combined)
• Mortgage balance: $63,000
• Credit card balance: $0
• Car loan: $0

Income:

1. Jamie Lee: $45,000 gross income ($31,500 net income after taxes)
2. Ross: $135,000 gross income ($97,200 net income after taxes, etc)

Monthly Expenses:

• Mortgage: $1,542.77
• Property Tax: $400
• Homeowner's Insurance: $200
• TFSA contributions: $1,000
• Utilities: $350
• Food: $600
• Gas/Maintenance: $485
• Entertainment: $400
• Life Insurance: $475

Question:

1. Looking over Jamie Lee and Ross's assets, which ones could be valuable to them for income as retirement approaches?
2. What government pensions will they be entitled to at retirement? What is the earliest they can collect these government pensions, and how would taking it early impact the pension?
3. Assuming they continue to contribute the above amounts to the RRSPs and TFSAs, how much will they have in assets to use for retirement at age 65 (include the non-registered investments as well in your calculations)? How much Jamie Lee and Ross withdraw each month and still leave their nest egg intact? How much they can withdraw each month that will reduce their nest egg to zero assuming they live until they are 90 years old? Assume the portfolio assets in the various investments (RRSPs, TFSAs, and non-registered assets) earns an average of 5 percent APR compounded monthly for investment accounts and 1 percent APR compounded monthly for the savings/emergency accounts
4. What are some issues that they may need to contend with when it comes to their retirement plans?