Reference no: EM133238907

The couple Eric and Kim are enjoying their retirement and travel goals together. Eric was able to sold his business and receive the payout and Kim already retired and received the pension benefit. However, a big health problem came in were Eric had a stroke and was paralyzed on the left side of his body. The medical insurance payout is not enough to cover the cost of his physical therapy as it does not cover these medical expenses. Eric will stay at home with intensive medical care. They rely on their CPP, OAS, pension, and annuity as retirement incomes which only cover their medical expenses but not the therapy of Eric. if this continues, their 10 years worth of savings will slowly decrease as there is not enough cash inflows on their savings.

Their son Danny was married three years ago and just have their first and second child as they also moved to the same neighborhood. Danny and his wife has a business restaurant. It yield a great performance until the covid19 pandemic hits. Danny tried to remain the business stable so he took a bank loan but at the end the restaurant closes and leaves Danny a $250,000 outstanding debt with zero income. The bank tried to contact Eric for the loan payment in one month or they will foreclose the property to cover the loan and mortgage. Later, Kim found out about the financial situation of Danny and she is also worried about their son and their grandchildren. Usually Eric made the decisions in the house now it is all for Kim. Their option is to sell the house and downsizing to a small place. She inquire to a realtor for the market value and advices Kim to wait for the second half for the market as it goes. Kim also considering a reverse mortgage as she weighs everything else before making a tough decision.

Question - Provide Recommendation with explanation

This section provides strategies for the client to consider that address the issues or take advantage of the opportunities.

Each option should be based on evaluating the quantitative and qualitative factors and potential implications across financial planning areas.

You should discuss the advantages and disadvantages of each option presented.