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ee, 60, and Mira, 64, have amassed substantial wealth through timely investments in real estate. Their combined net worth is $2.25-million, with rental properties generating about $50,000 a year before tax. They plan to retire this year and want to give their two children, both in their late 20s, $350,000 each for a down payment on a first home.

    Lee has a defined benefit pension plan that will pay him $2,500 a month at age 60. Their retirement spending target is $130,000 a year after tax, less than they are currently spending. They have $380,000 in cash, $220,000 in guaranteed investment certificates, and a non-registered stock portfolio of $400,000.

    Financial planner Kaitlyn Douglas analyzed their situation, exploring different scenarios to determine the best strategy for funding their children's gifts and achieving their retirement goals. She considered various factors, including inflation rates, average annual returns on investments, and the couple's life expectancy.

    In Scenario 1, Lee and Mira take Canada Pension Plan and Old Age Security benefits at age 65 and hold onto their rental properties. Their "goal coverage" – the likelihood of success of their financial plan – would be 136 per cent, with $11.4-million in assets remaining. The final tax bill would be about $1.6-million.

    In Scenario 2, they take CPP and OAS at age 70 instead, resulting in a 42-per-cent increase in Lee's guaranteed benefit and a 36-per-cent increase for Mira. This scenario yields a goal coverage of 138 per cent, with $11.6-million in assets remaining.

    Scenario 3 assumes the couple needs more cash flow than anticipated – $156,000 net annually. Their plan would still succeed, but they would need to draw down on their registered assets sooner, lessening the impact of taxes for the estate. In this scenario, Lee and Mira have a goal coverage of 108 per cent, with $8.77-million remaining in their estate.

    Scenario 4 considers what happens if one spouse dies earlier than expected – in this case, Lee dying at age 75. The goal coverage slips to 97 per cent, with about $6.84-million remaining in the estate. Mira would need to draw more income from her investments to meet the same income requirement.

    Douglas notes that various factors could affect the value of their estate, including changes in interest rates or stock market performance. She suggests considering selling their rental properties sooner rather than later and investing the proceeds in a tax-efficient investment.