Below you will find a real life case study of a couple who is looking for financial advice on how best to arrange their financial affairs. Their names and details have been changed to protect their identity. The Globe and Mail often seeks the advice of our Portfolio Manager & Senior Financial Planner, Matthew Ardrey, to review and analyze the situation and then provide his solutions to the participants.
Written by: Dianne Maley
Special to The Globe and Mail
Published September 12, 2025
The couple is planning a home renovation in a couple years, and they are wondering if they can help their two children pay for their postgrad education.
At the time of their first Financial Facelift in 2012, Halle and Hank were in their late 30s with two young children, “a typical family of four living in a home we own with the bank in downtown Toronto,” Halle wrote. Their combined income was $180,000 a year, but they always felt stretched, she added. Today Halle and Hank are 50 years old with two teenagers at home – one of them already in university. Their combined income is $378,000 a year, not including bonuses, and their assets are substantial. Halle cashed in her pension when she changed jobs.
Now they’re planning a $200,000 home renovation in a couple of years. They hope to retire at 58 with an after-tax spending budget of $110,000 a year.
“The kids both plan to do postgraduate work,” Halle writes in an e-mail. “What might we be able to contribute without risking our retirement? Or do we tell them to go it alone?”
We asked Matthew Ardrey, a certified financial planner and portfolio manager at TriDelta Private Wealth in Toronto. Mr. Ardrey also holds the advanced registered financial planner designation.
What the expert says
Hank and Halle are diligent savers and are aggressively paying off the last of their line of credit debt, Mr. Ardrey says. They have slightly more than $1.6-million in retirement savings and are adding $7,500 per month, with each putting $2,700 into registered retirement savings plans, $583 into their tax-free savings accounts and $467 into their non-registered investments.
They own a home worth $1.3-million with an $85,000 line of credit against it, which will be paid off by the end of 2026.
They are planning a $200,000 renovation in 2028. They plan to use the payments previously directed to pay off the line of credit, plus some debt, to finance the work. Any debt will be paid off before retirement, the planner says.
Halle and Hank expect that both their children will go on to graduate school. Their son will do a master of science at a cost of $50,000 over two years, and their daughter hopes to go to medical school at a cost of $250,000 over four years. “They are wondering if they could help their children with the costs for these degrees,” Mr. Ardrey said.
They also have $105,000 in a registered education savings plan. “They do not need the RESP savings for their son’s undergrad, but expect to use all of the RESP when their daughter goes to school in three years.”
In retirement, they want to spend $110,000 per year. In preparing his forecast Mr. Ardrey assumes Hank and Halle live to age 95. He assumes a rate of return on their investments of 6 per cent while they are still working and 5 cent after they retire.
The forecast also assumes that both Canada Pension Plan and Old Age Security benefits are taken at age 70 and that the couple will receive 85 per cent of the maximum CPP.
Next the planner looks at their investments. Their portfolio is 10-per-cent cash, 73-per-cent Canadian stocks, 11-per-cent U.S. stocks and 6-per-cent international stocks. “We assume they move into a balanced portfolio at retirement to reduce the volatility risk inherent in their current portfolio structure,” Mr. Ardrey said.
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Based on these assumptions, they can meet their retirement goal, he said.
“To truly understand the risk in this plan, we need to move beyond the straight-line projection, as we know that life and investments rarely ever move in a straight line,” the planner said. “To ensure the viability of this plan, we stress test it by using a Monte Carlo simulation, which introduces randomness to a number of factors, including return, to stress test the success of a retirement plan.”
“In this plan, we have run 1,000 iterations with the financial planning software to get the results,” he said. “We look at the 75-per-cent and 50-per-cent levels to determine where risk due to rate of return variance may affect the success of the plan.”
If Halle and Hank give no financial assistance to their children for their higher education, the Monte Carlo projection shows a 78-per-cent likelihood of success, Mr. Ardrey said. “This is a relatively strong level of success as it means essentially eight out of 10 times the plan will work for them.”
If Hank and Halle instead decide on funding the full amount of their children’s educations, the Monte Carlo projection shows a 65-per-cent likelihood of success. If they pay half the amount, the likelihood of success increases to 71 per cent.
“Looking at the stress test, I would suggest that they could help pay some level of their children’s postgraduate studies but would not suggest that they pay it all,” Mr. Ardrey said. They do still have their real estate to fall back on in the later years if need be.
“Halle and Hank should look at the structure of their current portfolio because there are some improvements they can make to increase return and reduce risk,” the planner said. “Most of the cash is not even invested in a high interest savings account, exchange-traded fund or similar investment. It is sitting idle and not earning interest. This money should be moved into performing assets.”
On the equity side, most of the investments are in Canadian stocks. These are typically the most familiar companies to most Canadian investors. “Though they should be part of the portfolio mix, more geographic and sector diversification is recommended.”
Finally, being seven or eight years away from retirement, they should be looking to start the transition toward a more conservative asset mix, Mr. Ardrey said. “Slowly and systematically de-risking the portfolio will help reduce the volatility risk in case markets have a sharp decline close to their retirement date.”
Client situation
The people: Halle and Hank, 50, and their two children, 15 and 18.
The problem: How much can they help their children with their postgraduate studies if they retire at 58 and want to spend $110,000 a year?
The plan: Take steps to lower investment risk as retirement approaches. Plan on paying less than the full cost of the children’s postgrad studies.
The payoff: Financial flexibility.
Monthly net income: $20,300, excluding bonuses.
Assets: Cash $21,000; non-registered stocks $30,000; her TFSA $120,000; his TFSA $100,000; her RRSP (including locked-in retirement account from previous employer) $865,000; his RRSP $520,000; registered education savings plan $105,000; residence $1,300,000. Total: $3,061,000.
Monthly outlays (residence only): Property tax $550; water, sewer, garbage $50; home insurance $120; electricity $100; heating $120; maintenance, garden $350; transportation $425; groceries $1,000; clothing $550; line of credit $4,500; gifts, charity $400; vacation, travel $1,000; dining, drinks, entertainment $550; personal care $150; pets $50; subscriptions $40; phones, TV, internet $250; RRSPs $5,400; TFSAs $1,165; non-registered savings $934. Total: $17,704.
Liabilities: Line of credit $85,000 at 5.45 per cent.
Want a free financial facelift? E-mail finfacelift@gmail.com.
Some details may be changed to protect the privacy of the persons profiled.
Presented By:
Matthew Ardrey
Portfolio Manager & Senior Financial Planner
matt@tridelta.ca
(416) 733-3292 x230