What the Financial Planner said

We had another meeting with the Financial Planner at our new credit union, and I am very pleased. What I liked most about her was that she was encouraging rather than discouraging (like the loan person was last week).

The basic picture is this:
Liabilities- 80k in debt, 231k mortgage
Assets- 275k house, 10k in paintings/other assets, and about $2k in savings and RRSPs

We assumed 4% inflation (I have seen this range from 2-4% so I guess it was on the higher end)

We assumed Mr Wooly and I each will inherit 150k from our parents when they die in 30+ years. This is the part I am the least comfortable with. Who knows how much you will ever inherit? But it was part of the future projection. I can relate this to my work - we were doing a Life Model just like I do Forestry Models. You make your best guess to the future and then revisit and refine every few years as things change.

Once our debt is paid off in 4 years (she gave us a year's grace from our 3 year goal) we will be putting $30k a year into RRSPs and savings earning about 8.9% interest. I think about 1/3 was in savings for purchases, and 2/3 in RRSPs.

We will live on 36k a year in retirement, which would more than maintain our current lifestyle.

Our goals:
Mr Wooly to retire at 60 (16 years), me at 55 (21 years)
We want to travel yearly if possible
We would like to buy a vineyard in 10 years
We would like to pay for our children's (we have none now) university education.

The results:
We CAN retire when we would like too! Yay! I know many people want to retire sooner than we have estimated, but I am just pleased that we can reach some of our goals now.

We can pay for our theoretical children's university.

We can travel probably every other year or every 3 years right now.

We can buy the vineyard in 10 years as long as we assume some of the amount in a mortgage (we won't have enough savings to pay it all outright).

My thoughts for future:
I think we would like to retire sooner. Our incomes are certainly going to be increasing, and I expect we will be able to save more than we have projected. Also, I know I overestimated in how much we could live off in retirement- this could be lowered perhaps in the future.

The best part is that DESPITE our debt, we can reach our goals if we get the debt paid off in 3 years.

1 Comment:

  1. SavingDiva said...
    Good luck paying off your debt sooner...how old do you want to be when you retire? Do you want to retire earlier to spend time with your husband or are you just not a fan of working?

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