Couple shy of retirement goals with $2.1 million portfolio

financialpost.com:

Tom and Amanda, both 60, self-employed and semi-retired, plan to spend $115,000 to $120,000 a year after-tax in 2024 dollars to age 95-plus. Are they on track to generating enough income to meet their lifestyle goals? Their current annual spending is nearly $109,000, and their biggest expense is travel, something they love and plan to do as long as possible.

Both Tom and Amanda left full-time employment behind in 2022 and now work as a small business consultant and health and wellness consultant, respectively, earning about $1,000 a month each after expenses and before tax. At this point, they plan to continue working part-time until December 2027.

The bulk of their annual income comes from their self-directed, equity-focused investment portfolio valued at just shy of $2.1 million. “We are not panic buyers or sellers. We buy for the long term and adjust as appropriate,” said Tom. Their portfolio generates about $80,000 in dividends through a mix of dividend-generating equities and high-interest savings account exchange-traded funds (HISA ETFs).

They withdraw $70,000 of dividends from their registered retirement savings plan (RRSP) and non-registered accounts, and reinvest the $10,000 of dividends generated within theirtax-free savings accounts (TFSAs).

Their portfolio includes: $264,000 in TFSAs, $1,206,000 in RRSPs, $110,000 in guaranteed investment certificates (GICs), $63,000 in a locked-in retirement account (LIRA), $411,000 in non-registered accounts and a residual balance of $34,000 in registered education savings plans (RESPs) they will likely collapse in the near future.

Tom and Amanda are debt-free and own a home in Southwestern Ontario valued at $1.9 million. “Ideally we’d love to stay here for as long as