Lynn should have little to worry about as she nears retirement. The health-care professional's children are grown up and out of the house.
She already collects one work pension worth more than $500 a month, and the 57-year-old currently works two government jobs, so she can expect two more defined-benefit pension payments when she retires at age 60 -- though she's uncertain how much she will receive.
Yet, Lynn is worried. Recently divorced, she is getting used to carrying the household budget on her own. She also has a mortgage of $150,000 on a home valued at $300,000.
Moreover, Lynn said she has a spending problem.
"I spend the money as it's coming in," said Lynn, who earns almost $100,000 a year.
"I think mostly where I spend money is with clothing and shoes, and dinners out -- and concerts. A big chunk of my money goes there."
Once retired, she estimates she won't spend as much on some costs.
"I get Tim Hortons every day. I get lunch everyday. I bet you I spend $100 a week just coming to work," she said, figuring those outlays will be reduced. "I also don't think I'll need as many shoes once I'm not working."
But any decreased expenses for fashion and double-doubles will likely be offset by her travel plans.
"I'd like to live in Mexico from January to April," said Lynn who has about $160,000 worth of investments and other savings.
"That's what I plan to do -- or at least somewhere away that's warm."
Her question for an expert is this: Can her retirement dreams live up to reality?
Certified financial planner MaryAnn Kokan-Nyhof with Desjardins Financial Security Investments Inc. said despite earning a high income, Lynn is potentially on a collision course for a financial meltdown when she retires.
"It sounds like she is the type who likes to have a lot fun, but she is going top speed at everything hoping to outrun her troubles."
The first order of business for Lynn is to nail down her work-pension payment amounts for her current jobs. This will provide her with an accurate snapshot of her retirement income and how it measures up to her goals.
Her work pensions will form the backbone of her retirement income, so it's important she contacts the providers of her pension plans to find out what she can expect as monthly payments at age 60.
Kokan-Nyhof estimates of Lynn's monthly pension income for her current jobs -- without knowing exactly her years of service and income history at her current jobs -- will be about $1,380 a month at age 60.
Combined with CPP and Lynn's other pension, she'll have a base income of about $2,300 a month if she retires at age 60.
That's a far cry from the $5,000 she currently takes home a month, and much less than what she spends.
In fact, Kokan-Nyhof says according to Lynn's budget, she is spending about $166 more a month than she earns right now.
"I guess it's safe to assume she spends every penny since she has no other debt," she said. "Lynn definitely needs to start keeping track of her expenses."
Kokan-Nyhof said she suspects Lynn has estimated most of the figures in her budget. On the bright side, she obviously is earning more or spending less than she realizes because she's not carrying any debt outside the mortgage.
If she expects to retire in three years, Lynn needs to track her expenses closely to find out exactly how much her lifestyle costs and then look for places to cut, so her retirement income is enough to support her needs and wants.
Kokan-Nyhof says retirement is likely going to be a bit of a shock for Lynn one way or another. Even with income from her savings, it's unlikely her gross retirement income will exceed $3,000 a month.
Another concern is if she retires at 60, she will still owe money on a mortgage.
"If she wants to retire at 60, she'll have mortgage payments for another 17 years until it's paid off."
That's $748 in cash flow that could be put to better use when she's retired.
All these numbers should stack up to Lynn deciding to delay retirement at least until age 65. Yet even if she holds off on retiring, she'll need to cut discretionary spending now to put her income to better use like increasing her mortgage payments.
"If she increases her payments by $1,100 a month she can have it paid off in seven years," Kokan-Nyhof said. "That means giving up lunches, $433 a month, and dinners out, another $700 a month."
The upside of this strategy is once the mortgage is paid in full, Lynn will have boosted her monthly cash flow by $1,800 a month ($748 in mortgage payments plus $1,100 in budget cuts).
Delaying retirement until 65 will also increase the amount of money she will receive from CPP and her work pensions. And she will also be eligible for OAS.
Furthermore, her RRSP will be able to provide more income.
Kokan-Nyhof says the current asset mix -- 75 per cent equities/25 per cent fixed income -- is a little risky for a near retiree. A more balanced portfolio could likely get Lynn to where she needs to go with less risk. If her investments can earn five per cent a year until age 65, for example, she can expect a gross monthly income from her investments of about $1,200 a month, or about $780 net.
"All this might just be the ticket she needs to buy her way to Mexico, if she can find a good rental rate for four months a year," she said.
"So if she can tighten the notches on her belt and cut out lunches and dinners now, Lynn just might be able to buy at least one new pair of shoes in retirement too."