Couple with $3-million portfolio still need 'what-if' advice for the 'long journey' of retirement

financialpost.com:

Married Newfoundland and Labrador-based couple Patrick, 54, and Sheila, 51, effectively retired in 2019 when he started winding down his small business and they’ve been living off its cash reserves, but that is coming to an end soon.

Since they retired, they have been “practising” what it will be like to live on investment income. Specifically, they have been drawing dividends from the corporation’s cash reserves (currently $100,000). In January 2025, these funds will be depleted and they plan to start living on their personal investment savings.

The couple are debt free and in addition to their primary residence (valued at $400,000), they own land and a cabin ($195,000) in their home province. They recently sold a rental property for $285,000 (minus a $24,000 mortgage) and used those funds to purchase a second vacation property in Florida for their three adult children and grandchild.

A lifelong saver, Patrick has for the past eight to 10 years transitioned out of mutual funds into a self-directed investor, buying dividend-paying stocks.

“My approach has always been to save first, spend the rest,” he said.

That approach has helped him build a healthy portfolio, largely composed of blue-chip stocks held in tax-free savings accounts ($408,541), registered retirement savings plans ($1.36 million), a locked-in retirement account ($116,851) and a non-registered joint account (about $1.1 million). The portfolio generates $146,000 each year in dividends, all of which are reinvested.

The plan is to start drawing about $137,000 in dividends from each of their personal investment accounts next year, but Patrick is considering options to extend his current dividend reinvestment plan to continue to grow his and Sheila’s portfolio