I had my mother over for dinner tonight with her new “boyfriend” who moved in with her a few  months ago.  She’s in her mid 50’s and he’s a little over 60 years old.  I’m happy that she  found someone after her last marriage kinda went the way of the dinosaur a few years ago.

When I was younger I was quite the spender.  I used to be the type that had to have the best  of everything.  TV? Had to be a nice flat screen when they first came out.  Stereo? Don’t  get me started.  But over the last 5 years I’ve curbed a lot of my spending and live a  pretty average lifestyle.  She’d hate me for saying this but I think I got my spending  habits from her

So now she’s looking at the possibility of retiring by the time she’s 60 and she’s come to  me to help her figure out how to do it.  We had a chat about what sort of expenses she  currently has and how much her and her boyfriend would need in order to retire and live in a  small city on Lake Ontario just east of Toronto.   Unfortunately, my mother didn’t have any  particulars for me but she promised she’d get them to me within a few weeks.

Because she’s like 98% of the general population, she has debt.  This debt comes from a  desire for instant gratification that most humans have.  You know, the one where we want something and we *have* to have it.  Now.  I myself have this desire, though I’ve  managed to keep it under control for years now.

So this is the plan that I have for her and her boyfriend.  When she comes back with her  expenses and income, I’m going to first figure out how she can use her existing savings to  offset her expenses as much as possible.  By producing income from her savings, she’ll  effectively be able to pay down her debt without having to worry about taking money out of  her work paycheque every month.   The investment I’ll have her in will not only produce  income, but will grow by a small rate every year so that after 5 years it’ll be worth more  than it was now.

After we’ve figured out what she can make in passive income immediately, I’ll calculate how  long it will take to get that debt paid off.  Hopefully with any luck I’ll have her paid off  within 2-3 years.  If it takes 3 years to pay off her debt, she’ll have 3 more years until  she hits 60 and wants to retire.  Plenty of time to create even more passive income.

At that point she will still have her assets in an income-producing investment.  After she  sells her house in the Greater Toronto Area, she’ll have a nice little chunk of money to add  into those assets and produce even more income.  The cost of living in the city that she  wants to move to is much less than Toronto so she’ll be able to either rent a place or buy a  place, depending on what she feels she wants to do most.

With the income she can produce from her assets, combined with their old age pensions, CPP,  and other pensions (her boyfriend is from Britain originally and will receive money from his  pension there), they should be able to live comfortably for the remainder of their lives.

Well thanks for listening everyone.  As soon as she brings over her income and expense sheet I’ll go over her situation in more detail and outline how I plan to get her to her retirement without having to dig into her RSP’s to do so.