For Tina, 38, and Brian, 37, life in British Columbia is a whirlwind of activity. With three children under the age of five, including a newborn, their days are full. Amidst the chaos of young family life, they are determined to look ahead, focusing on a critical long-term goal: building a secure retirement. However, the financial strain of recent years, marked by extended maternity leaves, has made saving a significant challenge.
Juggling Family Growth and Financial Goals
The couple's current monthly expenses run approximately $10,000, which includes a $2,200 mortgage payment. They own a home valued at around $1.1 million, with a mortgage of $506,000 at a low interest rate of 2.3% that is set to mature in the fall of 2027. While they hope to upgrade their home within five to ten years, they are unsure if accelerating that plan or focusing on paying down their existing mortgage is the wiser financial move.
Their aim is to retire by age 60. Online research suggested they would need to save $3,000 per month for two decades to generate a post-tax retirement income of $100,000 annually—a target that feels out of reach given their current cash flow. "How can we invest smarter and be more tax efficient?" Tina asked, summarizing their core dilemma.
Complex Income and Pension Picture
The family's income streams are multifaceted. Brian earns $78,000 annually after tax and has an employer-defined benefit pension plan. Tina's situation is more complex. Previously a full-time public sector employee, she now splits her time. She works two days a week for her public sector employer, earning $46,800 after tax, and runs a private consulting practice that brings in roughly $102,000 before tax. She is currently on maternity leave, receiving $30,000 in Employment Insurance benefits.
This hybrid arrangement leads to several questions. Tina wonders if maintaining her part-time public sector job for the benefits is optimal, or if she should incorporate her business and focus on growing it independently. She also contemplates scaling back work further while her children are young. Furthermore, having previously bought back pension time for a past maternity leave, she questions whether she should do so again for her current part-time period to boost her future retirement income.
Current Savings and Insurance Considerations
Despite the saving challenges of recent years, the couple has built a foundation. They hold $78,000 in Tax-Free Savings Accounts (TFSAs) and approximately $90,000 in Registered Retirement Savings Plans (RRSPs), all invested in stocks. For their children's education, they have a Registered Education Savings Plan (RESP) valued at $19,000, invested in exchange-traded funds (ETFs) and stocks. They also have $13,000 in cash set aside for Tina's 2026 income tax bill.
On the protection side, Brian has a $750,000 life insurance policy through work, while Tina has $230,000 in employer-funded coverage. As the primary earner, Tina is considering whether she needs to purchase supplemental life insurance. Their annual financial efforts include repaying Tina's RRSP Home Buyers' Plan withdrawal with a $3,000 contribution and attempting to make one extra mortgage payment per year to reduce the principal.
With their low-rate mortgage nearing renewal and competing priorities between investing in financial markets like ETFs or doubling down on real estate, Tina and Brian are seeking a clear path forward to turn their retirement dream into a achievable plan.
