DLD FINANCIAL GROUP LTD

Lindsay

DLD Financial Illustrative Case Study

When does it make sense to purchase a primary residence? This case study shows two different financial snapshots – Lindsay (single) and Micheal & Alexis (a young family) – to determine if they should purchase a primary residence.

Meet Lindsay

Lindsay, 32 year old is a successful lawyer residing and working in Downtown, Vancouver.

At a recent review meeting, Lindsay inquired about whether it makes sense for her to purchase a condo. She made it very clear that she would like to retire with a decent retirement income and not have to work too much longer than her original goal of age 60.

Financial Snapshot

Lindsay makes $155,000, pays $1600/mth in rent and spends $4500/mth excluding savings.

Current net worth:

  • RRSP: $71,500 (Saving $1834/mth)
  • TFSA: $40,000 (Saving $458/mth)
  • Life insurance cash value: $30,000
  • Cash: $41,500 ($650/mth)
  • Total monthly savings: $2942

Based on the above savings, at age 61, Lindsay will be able to generate $75,000 after taxes indexed for inflation.

Comprehensive financial planning with DLD

Lindsay has asked us to put together a scenario if she were to make a home purchase of $500,000:

  • 20% down payment: $110,500 from liquidating all of her assets
  • Mortgage: $400,000 at 2.9%, ($1661/mth)
  • Savings ability is reduced to $850/mth to her RRSP and expenses are increased due to strata and property taxes.
  • Retirement at age 61: $37,500 after taxes indexed for inflation or she can work an extra 7 years to achieve an income of $75,000.

As a result, Lindsay has decided not to purchase a property for the time being and will reassess at a later time.

Due to our commitment to client confidentiality, we couldn’t provide a real-life example. Each client is unique. This illustrative case study is based on typical financial situations we manage. Contact us to learn more about what your financial recommendations might be, or to hear what real DLD clients have to say, read our testimonials.

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Category
Home Ownership