Facing transitions

Eva is raising two children—ages 10 and 13—and wants to pick up the career she’d put on hold to care for her late husband. She left her career as a physiotherapist when her husband first got sick, and she’s now considering a home-based physiotherapy business as a way to transition back to work.

She’s meeting her day-to-day spending needs through the cash flow from her husband’s critical illness policy and the death benefit from his life insurance policy—but those sources of income won’t last forever. She has $100,000 in her RRSP.

Although she is planning to return to work to generate income, she also wants to understand how the other pieces of her broader financial situation fit together. What strategies should she consider in order to meet her financial needs today and tomorrow? 

 

How we helped

✓ Business planning: First we looked at how Eva’s self-employment income can fit into her financial picture and integrated in tax planning.
✓ Other income: Both Eva and her children are eligible for monthly benefits from the Canada Pension Plan as a result of her husband’s early passing. So, we helped her understand and incorporate these amounts into her financial plan.
✓ Housing expenses: We reviewed her existing mortgage and how it can accommodate the flexibility she might need due to irregular self-employment income. 
✓ Income protection: Eva wanted to be sure that both she and her children were protected and provided for, so we reviewed her insurance needs and completed a Needs Analysis for Death, Disability and Critical Illness.
✓ Investment portfolio: She was non-registered invested in a very conservative 1% account—currently leaving only 78% of her retirement goals funded. We realigned some of her investments to 50% equity and 50% fixed income to provide a better balance of predictability and growth.

Results

Because of her IG Living Plan, Eva:

  • Understands where her income is coming from now, and how to fold her future income from self-employment into her plans
  • Can count on the protection from fluctuating income that her mortgage now provides for her
  • Has peace of mind that she will be able to meet the financial needs of her children as they grow, as well as her own needs as she moves toward retirement

Best of all, with some changes to her financial strategies, we increased the probability of a fully funded retirement from 78% to 92%.