Can This Late Starter Get Her Retirement Goal On Track? A Boomer & Echo Financial Makeover

Is it possible to attain your retirement goal when the majority of your income producing years are behind you? It’s never too late to improve your financial situation.


Louise Gates (58) is the head of a marketing team for a small manufacturing company in Kelowna. After renting for most of her working life she purchased an older home five years ago using an inheritance from her father’s estate for the down payment.

Since then, Louise has become frustrated with the rising costs of her household expenses and she often spends her entire paycheque every month. Even though she doesn’t consider herself a big spender, she has accumulated a fair bit of debt mainly due to a vehicle purchase and some major repairs to her home.

Her only savings are through payroll deductions for a Group RRSP which are matched with a 50% contribution from her employer. The RRSP is currently invested in low- to medium-risk mutual funds. She will rely on this fund, CPP and OAS as income sources in retirement.

Louise likes her job so much she wants to continue working until she is at least 70.

Can this late starter get her retirement goal on track


  • Home – $485,000
  • Group RRSP – $172,000
  • TFSA – $1,300


  • Mortgage – $190,000
  • Line of credit – $27,000
  • Credit Card – $4,600


  1. Louise is contemplating selling her home and downsizing into a nearby retirement complex where housing is valued in the $265,000 – $315,000 range.
  2. Pay off her debts before retirement.
  3. She currently enjoys a couple of road trips a year with her lifelong friend, but she would like to take some time off in the winter to get away from the snow for a few weeks.

Here’s what she could do:

Louise is in a negative cash flow situation at times. She needs to get a handle on this right now.

Her home is rapidly becoming a money pit. Moving to a less expensive property would solve a lot of her issues. First, she needs to assess her cash flow to determine how much of a home she can comfortably afford.

Alternatively, she could consider selling her house and go back to renting. This will bolster her retirement savings and free up some cash for travel.

She needs to make paying off her debt her first priority.

Right now, she plans to work until age 70. If a person works past age 65 it should be because they want to not because they need to for financial reasons. She needs to consider that she may not be able to work in the future due to health reasons, company downsizing, or she just simply might not be inclined to any more.

If she doesn’t make some changes now, Louise could very well be forced to work for longer than she chooses to make ends meet.

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  1. Wendi on January 27, 2017 at 5:01 am

    Nobody goes back to renting once they have had a taste of freedom.


    1. Cancel cable tv and home phone, renegotiate cell phone service without data, call credit card co. to negotiate lower interest, shift use of electricity to time of use, ask her life long friend to move in with her to share housing costs or rent out her basement or extra rooms to students. Better yet when she does go on her winter vacation make her place an air bnb.

    She could ask for a raise or trade in her vehicle for a smaller one. Refinance her debts. Anything but renting. She is only in a negative cash flow because she had no discipline or plan.

    And no more coffee for me . . .

    • Mike on January 27, 2017 at 8:32 am

      I don’t agree with Wendy’s attitude to returning to renting. The days of owning your home being the best investment are rapidly ending. However, I do agree renting part of the home? Perhaps rent the whole house and move to smaller rental yourself? It seems the house has been a money pit, this may not change if you rent it out so it may still be wiser to downsize or sell and rent. Good luck!

      • Lucie on January 28, 2017 at 5:24 am

        Wendy is probably a realtor

        • Wendi on January 28, 2017 at 10:07 am

          Lol Lucy.

    • Robert Gignac on January 27, 2017 at 10:20 am

      Many people can (and do…) go back to renting when they realize that owning a home is often not what they thought it would be (or actually enjoy…) – especially in the case of owning a money pit. Yes, there are plenty things she can do – ditching the home phone for sure – dropping cable maybe – can be more complicated if you bundle your internet with them and are getting a better deal – but once cable is dropped – now you are signing up for Netflix or Crave or alternate entertainment source and don’t get me started about “streaming live sports” which sucks. Ditching an expensive car is also a great call. Sharing accommodations can be an idea to pursue as well.

  2. JohnnyStash on January 27, 2017 at 8:10 am

    Unload the money pit, take the equity and buy within the retirement complex. Any positive balance remaining goes directly to other debt and live happily ever after.

  3. Steph on January 27, 2017 at 9:24 am

    Wendy sounds as if she has never given a thought to fiscal planning. Surprising, because she doesn’t seem to married or have children. Only herself. And not doing well on that front. I say she should get out of home ownership as quickly as she got in. Go back to renting, in an envirment which is ‘turnkey’. These changes were too much at 58, and she sounds resentful.

  4. Malcolm Palmer on January 27, 2017 at 11:21 am

    A home gives you equity, but it also can be a boat anchor. Her plan should include no more work after approximately 65, i.e. can she live off her investments plus CPP, etc. at 65? Then, if she wants to work after 65, it’s all good. If she can’t retire at 65, then she really needs to cut her expenses.

  5. Wendi on January 27, 2017 at 11:30 am

    Lol Steph. I may sound like a jerk-a-saurus but selling and renting is a desperate move. Her father left her an inheritance and she wisely invested in property. Maybe too much property but what is done is done.

    There are so many cost saving things to be done before panic sets in. Let’s revisit her when she has implemented these measures.

    But for the sake of argument let’s say she chooses to sell. Does she want to get the property ready for resale or is it okay as it? Realtor fee, lawyer fee and any other fee or tax.

    Her inherited investment is lossing money just to get the place sold and she hasn’t officially left the building.

    Does she rent a condo or apartment? First and last, deposit, maintenance fee, parking fee etc.

    In the end both scenarios need to be looked at with as much financial information as possible. It was a great thought provoking post. Which, I think, was the intention in the first place.

  6. Maria on January 27, 2017 at 4:20 pm

    I think there is not enough information given here. “Even though she does not consider herself a big spender” – that’s not factual. An analysis of her net income and spending over the last 6 months would be helpful. Then have a look at all her options.

    Basically, I see very little analysis of her situation provided here for Louise to make an informed decision.

    • Michael on January 28, 2017 at 12:42 am

      I agree. The most immediate issue is the possible negative cash flow. Without a breakdown of income and spending, there is not sufficient information to really dig deeper.

  7. Mike on January 28, 2017 at 11:03 pm

    Typical Canadian move,get cash buy real estate,house rich cash poor(add in opportunity costs of about $24,000/yr on $300,000,property taxes $3500/yr maintenance and upkeep $ 10,000/yr,mortgage interest and insurance also needs to be factored in.Now if she sells there is realtor fees which she could save on as the market in the Okanangan is now depreciating ,lawyer fees,taxes,moving expenses,more fees to buy the smaller home.

    You run the numbers and see what home ownership costs per year and see the “financial freedom” owning a home gets you.
    She should sell and rent,invest cash for her retirement in non RRSP fund.

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