Can Tom and Pat, both in their early 40s, retire by 50 and still spend $200,000 a year?

financial facelift

Tom and Pat are wondering how much they will need to save to generate an income of $200,000 a year after tax in eight years or so. Will they have to work longer to reach their goal?

Tom is 42 years old and operates a successful consulting business, drawing a salary of more than $200,000 a year and investing the surplus through his holding company. His spouse, Pat, is 43 and earns about $100,000 a year as a realtor. They have two children, ages four and six, and a house with a mortgage in the Prairies.

Ideally, they’d like to retire together by the time they are 50 or so.

With the lion’s share of his retirement savings in his holding company, Tom is wondering about the tax implications of withdrawing it once he retires.

“Given that most of my retirement savings are i