Building a financial plan after a hardship

Finding your financial footing

By Jason Heath, CFP on May 17, 2016
Estimated reading time: 3 minutes

After the death of her spouse and having left her job due to her health, Georgia is left wondering—what's next?

Q: A little over 3 years ago, I became a widow very unexpectedly with two kids. About five months ago, I had to leave my job due to Parkinson’s disease. I am an owner of a house which I’m trying to downsize without success due to bidding wars. I do have a small CPP pension and a little money from life insurance which I would like to invest somehow. How do I plan for the long term? —Georgia L. A: As a financial planner, one of the things I do all day long is build financial plans that show people how long they have to work to retire comfortably at age 62 and fund the rest of their lives through age 95. I often tell people, however, that life is rarely so linear. Yours is a situation that drives that point home, Georgia. I’m sorry to hear about your misfortune. Life events like this are definitely a time to re-evaluate financially. Ask a Planner: Leave your question for Jason Heath » I think it could be helpful for you to build a retirement plan. Based on your current assets, income and expenses, you could use a long-term financial projection to determine things like:

How much of a downsize do you need to do?

How much can you afford to spend each month?

What rate of return do you need on your investments?

How much financial support will you be able to provide for your children, for post-secondary education, for example?

Do you need to plan to return to work at some point?

You mentioned that you left work due to your Parkinson’s. Did you quit or go on disability, Georgia? If you had disability insurance coverage at your employer, I would have thought that you may have qualified for disability benefits under your plan. You should make sure you have applied for all potential government benefits, including the CPP disability benefit for you and your children, which may be payable over and above your CPP survivor’s benefit for your late husband. You may also qualify for the Disability Tax Credit on your tax return, which will generate tax refunds and qualify you to invest and save in a Registered Disability Savings Plan, which will result in grants from the government on your deposits. It’s tough to invest for the future without perspective, Georgia. An assessment of your risk tolerance would be a helpful start, but beyond that, what rate of return do you need your money to earn in order to outlast you? And how much can you afford to withdraw from your investments each year? I caution you from investing your savings with just anyone. Many so-called financial planners are mutual fund salespeople in disguise and push products that make them and their companies money—at the expense of your long-term savings. With average mutual fund fees in the 2% range and bonds paying 2%, conservative or balanced mutual funds are destined to pay paltry returns. There are more alternatives to investing these days regardless of how much money you have to invest, ranging from wholesale mutual fund providers to online or robo-advisors to DIY exchange-traded fund portfolios. In summary, Georgia, I think you should start by developing an objective financial plan from someone who isn’t trying to sell you something. Then balance your risk tolerance and your required investment return before selecting the most appropriate investment solution at a fair value. I encourage you to reach out to a professional financial planner to help make both of those things happen for you. Good luck. Ask a Planner: Leave your question for Jason Heath » Jason Heath is a fee-only, advice-only Certified Financial Planner (CFP) at Objective Financial Partners Inc. in Toronto, Ontario. He does not sell any financial products whatsoever.

About Jason Heath, CFP

Jason Heath is a fee-only, advice-only Certified Financial Planner (CFP) at Objective Financial Partners Inc. in Toronto. He does not sell any financial products whatsoever.

Linkedin Twitter Facebook Website

Comments Cancel reply

Columns

Why I’m optimistic about the markets in 2025–tariffs or no

This advisor isn’t losing any sleep over the markets. In fact, looking back at 2024 and forward into 2025,...

Why I’m optimistic about the markets in 2025–tariffs or no

A car steering wheel and a bowl of pasta, as symbols of how to get the best auto loan interest rate.

loans

Car loan interest rates: What’s the best Canadians can get?

Car loan interest rates can be as confusing as a complicated recipe, and just as daunting to navigate. This...

Car loan interest rates: What’s the best Canadians can get?

Newcomer to Canada buying their first car at the dealership asking questions of the sales person about getting a car loan.

Newcomers to Canada

Auto loans for newcomers—questions to ask when buying your first car in Canada

Buying your first car in Canada is like any other major purchase. Ask a lot of questions, not just...

Auto loans for newcomers—questions to ask when buying your first car in Canada

A woman using the MoneySense Finder tool at her work-from-home desk

ETFs

Buying ETFs in Canada Tool: The MoneySense ETF Screener

Which ETFs should you invest in? Which ones best suit your risk tolerance? What about personal ethics? Check out...

Buying ETFs in Canada Tool: The MoneySense ETF Screener

Budgeting

What is the Canada Carbon Rebate? Plus, dates and amounts for 2025 rebates

The Canadian government is sending out the last carbon rebate of 2024. See who’s eligible and how much you...

What is the Canada Carbon Rebate? Plus, dates and amounts for 2025 rebates

Canadian woman buying a car, as she learns to manage her money.

loans

Personal Finance For Canadians For Dummies excerpt: How to manage money and stop overspending

Learn how to manage your money, understand your earnings, invest wisely and more, from this excerpt of Personal Finance...

Personal Finance For Canadians For Dummies excerpt: How to manage money and stop overspending

Save

How much money should I have saved by age 40?

Sponsored By

CIBC

How much money should I have saved by age 40?

Save

How much money should I have saved by age 25?

Sponsored By

CIBC

How much money should I have saved by age 25?

Real Estate

How changes to the Home Buyers’ Plan could affect your down payment

Sponsored By

EQ Bank

How changes to the Home Buyers’ Plan could affect your down payment

FHSA

Unsure about buying a home? Why you should open an FHSA now anyway

Sponsored By

EQ Bank

Unsure about buying a home? Why you should open an FHSA now anyway

Finding your financial footing

About Jason Heath, CFP

Comments Cancel reply

Related Articles

Why I’m optimistic about the markets in 2025–tariffs or no

Car loan interest rates: What’s the best Canadians can get?

Auto loans for newcomers—questions to ask when buying your first car in Canada​

Buying ETFs in Canada Tool: The MoneySense ETF Screener

What is the Canada Carbon Rebate? Plus, dates and amounts for 2025 rebates

Personal Finance For Canadians For Dummies excerpt: How to manage money and stop overspending

How much money should I have saved by age 40?

How much money should I have saved by age 25?

How changes to the Home Buyers’ Plan could affect your down payment

Unsure about buying a home? Why you should open an FHSA now anyway

Auto loans for newcomers—questions to ask when buying your first car in Canada