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Winding down self-employment and planning for retirement

August 18, 2020 Special to MoneySense
Winding down self-employment and planning for retirement

Photo by cottonbro from Pexels

Q. I am a 60-year-old female, working full-time employed/self employed on a 100% commission basis and averaging between $107,000 and $140,000 gross annual income.

I own my home, with a $70,000 balance left on my mortgage. My mortgage payment (not including property taxes) is $457 biweekly. The current market value of my home is about $325,000. 

In terms of investments, I have $39,000 in two RRSPs (current employer plan and a small amount from a prior employer), plus about $250,000 in RRSPs with my bank.

I have no TFSA.

I would like to retire at 63, or at least reduce my work hours, and I have no idea if either is possible. I can work as long as I like, even past 65 if I choose. I recently started taking Fridays off but keeping my production the same, with no decrease in earnings. I am considering reducing to three days this fall, and continuing with that schedule until I retire.

While I’ve considered downsizing, I’m not really ready to sell my home: I love outdoor space and my pool, and I’ve redone the entire house over the last 17 years. I do have extra space for sharing or renting out (a possibility for one of my sisters, who is around my age). I have also wondered about buying an income property or going in with my youngest son, who is 25. My eldest, at 37, has a full-time career, while my middle child, at 29, attends nursing school out of town. I have no grandchildren and don’t expect any in the next few years.

I contribute about $15,000 to $18,000 to RRSPs at tax time. The tax refund (which ranges $10,000 to $12,000) goes all or mostly towards my highest line of credit, which was as high as $52,000 but is now at $26,000. I also have about $8,000 in credit card debt, and another LOC at about $8,000.

In addition, I have $5,000 in savings, which I have thought to put towards paying down my LOC, or tax owing on my 2018 return (which I have yet to file).

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