Watson Investments is proud to celebrate our Managing Partner, Jennifer Watson, recipient of the Cogeco Business Leader Award presented by the Oakville Chamber of Commerce.

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Case Study

Individual approaching retirement

Their situation

Age: Late 50’s

Overview: An individual planning to retire in the next 4-5 years, with three young adult children, without a pension plan.

Net Worth

$1.6 million

Assets

Home valued at $1.25 million Investment Account: $600K

Liabilities

Mortgage: $250K remaining Car loan: $15K

Their Goals

  • Secure the desired lifestyle in retirement.
  • Pay off debt before retirement.
  • Support children’s post-secondary education.
  • Support children with home purchase.
  • Assisted with aging parents’ care.

Watson's Solutions

1
Retirement Strategy
  • Examined current lifestyle and engaged in an in-depth discussion of future retirement lifestyle with our retirement experts.
  • Conducted cashflow projection analysis to assisted with action plan to meet retirement goals.
  • Developed a portfolio and tax plan that maximizeds savings during working years and throughout retirement.
2
Debt Management Strategy
  • Prioritized high-interest debt by increased monthly payments and allocated windfalls such as tax refunds to accelerate debt repayment.
  • Considered refinancing or consolidating loans to lower interest rates and simplified repayment.
  • Created a budget to optimized cash flow and establish an emergency fund.
3
Withdrawal Strategy
  • Managed RESP withdrawal strategy.
4
Assisted Children with First Home Purchase
  • Encouraged children to open a First Home Savings Account (FHSA) and contributed up to $8,000 annually. Highlighted FHSA benefits, including tax-deductible contributions and tax-free withdrawals for a first home.
  • Explored co-signing to help children qualify for a mortgage, considering risks to credit and borrowing capacity.
  • Contributed to TFSA to provide tax-free support for a down payment while maintaining retirement savings.
5
Explored Support Strategies for Aging Parents
  • Encouraged parents to work with a trusted financial planner to ensure future cash flow needs were managed effectively.
  • Assisted in connecting parents with support services, such as extra support workers, to ensure they received the help they needed while maintaining independence.

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FAQ

Cash Flow

Will my cash flow be disrupted?

An Education Savings Plan in Canada supports your child’s student education plan with tax benefits and CESG grants. A Registered Education Savings Plan (RESP) offers tax-sheltered growth with a $50,000 maximum RESP contribution limit, while a TFSA provides additional savings for education in Ontario and beyond, reducing financial stress when tuition payments begin.

Combine RESP savings, TFSA contributions, and family gifting options to maximize grants and grow funds tax-efficiently.

It’s best to start as early as possible to take advantage of compounding returns, RESP grants, and long-term growth.

A solid education plan includes RESP contributions, CESG maximization, gifting options, and effective budgeting to meet education costs.

Tax Efficiency

How can I effectively save and gift for my children's weddings while minimizing tax impact?

An Education Savings Plan in Canada supports your child’s student education plan with tax benefits and CESG grants. A Registered Education Savings Plan (RESP) offers tax-sheltered growth with a $50,000 maximum RESP contribution limit, while a TFSA provides additional savings for education in Ontario and beyond, reducing financial stress when tuition payments begin.

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