With three decades to go, this frugal B.C. server can ride her TFSA to a solid retirement

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She is likely to get full Old Age Security, currently $7,362 per year, and less than maximum Canada Pension Plan benefits. We’ll conservatively estimate she gets 25 per cent of CPP or $3,528 per year. We’ll estimate rent after costs at $12,000 per year. She will have $18,000 investment income. That’s a total of $40,890 before tax. After 13 per cent average tax, she would have $2,975 per month to spend. B.C. property tax subsidies may change so we’ll not include them in this analysis.

She would have a paid up house generating rent, income from her financial assets, no debts, and costs as low as $2,000 per month. Her discretionary income, $1,975 per month, would pay for $20,000 annual travel or a new or newer car as needed.

Over a three decade time period, Autumn may face unemployment, health or other issues. Maintaining a substantial rate of saving, as she is doing, is the least expensive way of having insurance for bad luck or bad times.

As Autumn’s mortgage is paid down, free cash flow should rise. She will have the choice of investing in property or financial assets. Her savings plan will support her retirement, Moran concludes.

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Retirement stars: Three retirement stars *** out of five

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