Getting rid of risky property play will improve retirement

Situation: Couple has retirement portfolio with high risk investments that could fizzle
Solution: Get out of speculative investments, then invest for reliable income

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Reblogged from Andrew Allentuck

In Alberta, a couple we’ll call Frank, who is 57, and Ella, who is 51, emigrated to Canada decades ago to find work and build secure lives.

Starting with nothing but their will to work, Frank in a municipal civil service job, Ella in health care, they have built up about $705,000 of net worth, most of it in their $490,000 home. They worry, however, that their income from about $184,000 of financial assets plus two civil service pensions at 65 plus CPP and OAS may not be enough to sustain their retirement. The irony is that their Canadian assets would make them very wealthy in their countries of birth. In Canada, though, they worry that their liabilities could sink their retirement.

It is a legitimate concern, for they have a $70,000 line of credit to pay off at $1,200 a month, about 18% of their $6,500 combined monthly take-home pay. The line of credit was taken out to buy into a speculative land development in which they are co-owners of undivided land rather than sole owners of a defined parcel. It is a risky investment that produces no current income. Moreover, they have $37,500 in a mortgage fund in their RRSPs which yields 10% a year. That yield implies the mortgages carry more risk than banks and credit unions accept.

Family Finance asked Derek Moran, head of Smarter Financial Planning Ltd. in Kelowna, B.C., to work with Frank and Ella, who still have a daughter at home attending university.

“The good thing about the couple’s financial affairs is their dedication to their work and their home,” he says. “The not so good thing,” he notes, “is that they appear to have made investments in land and mutual funds on the basis of trust in advice.”

The interest on the loan to buy the property is not tax deductible, though it can be added to the adjusted cost base of the property, eventually reducing the taxable capital gain. Best bet: sell the land to pay off the line of credit and capture a capital gain which the couple believes to be about $30,000 or $20,000 after costs. We’ll assume they just get their money back, then invest in low fee mutual or exchange traded funds focused on producing dividends.

Read More … 596 more words

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Vancouver Launch Announced for Alture MidCity!

Alture MidCity – Visit the Project Summary page
– View Alture MidCity on Pinterest

Welcome to the Alture MidCity – Official Vancouver Launch event!
Hosted by Alture Properties at the Pan Pacific Hotel on November 23rd, 2013.
Please RSVP at http://www.midcitycalgary.ca or call 604-777-1808 ext.1

Why invest in the ordinary when You are Extraordinary? We invite you to learn more about and profit from Canada’s #1 Investment City. Our project featuring detailed proforma and competitive pricing – every unit in the building is designed to cash flow to an annual rental yield of ~7%. Units from $173,900 and located in the Midnapore area of Calgary, Alberta – walking distance to the LRT and 20 mins to Downtown Calgary. If you’d like to contact me for more information, feel free to use the contact form below to reach me directly by email.

MidCity logo on white

Alture MidCity Final Rendering

To see the full project details and follow development updates as they happen, please visit the project summary page.

Exciting announcement coming soon! Alture MidCity

Alture MidCity – Visit the Project Summary page
– View Alture MidCity on Pinterest

MidCity logo on white

Get ready for the announcement of our Grand Opening and Launch Party! Invitations and registration will be opening within the next week, tentative event date set for November 23rd, We know for sure there will be limited seating so reservations are required. Advance pre-sale registrations have already taken place – so to get your insiders discounts and first pick of available units, keep your eyes on the site here for updates to be posted or send me a quick email below!

Alture MidCity Final Rendering

To see the full project details and follow development updates as they happen, please visit the project summary page.

Courtyards Grand Opening and Phase I 90% sold!

Courtyards in Chestermere – Visit the Project Summary page

Thanks to everyone for checking out our townhouse project Courtyards in Chestermere, Calgary Alberta! Our grand opening was a great time, balloons, hot dogs, food trucks and radio stations in attendance. Mostly a great time for the kids, what’s better on a nice Sunday, come out for a good time, the kids are distracted and you get to tour the newest in show houses and suites!

Here are some of our finishing samples if you stop by our show suite, it’s the first on the boulevard as with construction schedule to start next week we don’t have a full showhome available yet. Phase I is technically sold out as we will be keeping one unit as a show suite, however we are planning to start construction on 1/2 of Phase II immediately in order to keep up with the demand. Please stop by or check out our website for more information on availability and details.

To see the full project details and follow development updates as they happen, please visit the project summary page.