Solution: Restructure car loan and line of credit to save interest, use B.C. property tax deferral
Family Finance asked Derek Moran, head of Smarter Financial Planning Ltd. in Kelowna, B.C., to work with Brent and Helen. Living in the house costs the couple $366 monthly for property taxes and $704 mortgage interest not including repayment of principal. Repaying the principal increases owner equity. It is shifting money from one pocket to another. If they sell and buy a condo, they would swap $366 monthly property tax for condo fees — or strata fees in B.C. terminology — depending on the property. They could make use of a B.C.
Adding up retirement incomeAt present, the couple’s income consists of two indexed pensions that total $49,344 before tax per year with 50 per cent survivor options for each partner; two bridges to 65 which total $24,204; and Brent’s Canada Pension Plan benefit of $8,520 per year started at age 60 due to health concerns. They add RRSP payouts of $4,800 each per year for total income of $91,668 before tax.