CPA Partner and Retired Spouse

Clients:

Clients Jennifer and John are 51 and 59 years old, with 3 children. They have a net worth of approximately $4.4M between their investment portfolio and primary residence. Jennifer is a partner at a big four accounting firm earning over $500,000/year with $115,000 in a TFSA, approximately $420,000 in RRSP accounts. Jennifer expects her pension to pay around $182,000/year in retirement. John is retired teacher and has $115,000 in a TFSA and small RRSP. Together they own $1,200,000 in a joint non-registered investment account and estimate their current principal residence to be worth about $2M. Jennifer and John anticipate needing approximately $200,000/year before tax for living expenses. As a partner, Jennifer must retire by age 60. John expects to retire around age 65. John and Jennifer plan to travel the world in retirement and spend winters in a warmer climate. They have no plans to downsize their existing home. 

Issues to address:

  • John is not interested in investments and Jennifer has very little time to keep track of things due to her profession. Jennifer is very concerned about the complex independence restrictions on her portfolio as her firm audits many publicly traded companies, ETF companies and mutual fund companies.

  • Jennifer is unsure how her capital loss from work will impact her financial plan. 

  • John is feeling uneasy about how to efficiently take funds out of the RESP in a tax efficient manner. 

Our recommended path ahead:

  • Ensure Jennifer’s independence restriction protocols are followed properly so that she can focus her time on work and avoid any mistakes that could jeopardize her income and potentially her career. At the Pritchard Wealth Management Group, we have a thorough understanding of the independence restrictions faced by big four firm partners. We work directly with independence departments to ensure no violations are made and have tailored investment solutions that satisfy firm independence restrictions. 

  • Strategically trigger capital gains in Jennifer’s name at the right time to absorb her partnership capital loss. Opportunistically crystallize capital gains to absorb Jennifer’s capital loss to help mitigate future capital gains tax liabilities.  


After reviewing the clients outside account statements, tax returns and insurance policies we were able to create a new wealth plan to quantify the impact of our recommended strategies.