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Create a bright future

Eight stEps to a bEttEr rEtirEmEnt

What your advisor and thE sun LifE finanCiaL tEam Can do

We’re always striving to help you move your plan forward. We believe in working with you every step of the way. our retirement savings products may have helped you save for your retirement. now, we look forward to continuing our relationship by:

Listening to your retirement plans

Reviewing your “Eight steps to a better retirement” workbook

Ensuring all of your retirement income questions are answered

Helping you select and put in place the best possible retirement income option(s) for you.

things to remember

What doEs that mEan?here is a list of common acronyms used in this workbook. see the glossary at the end of this workbook for a more detailed explanation of each term.

DPsP - deferred profit sharing plan

giC - guaranteed investment certificate

gLWb - guaranteed lifetime withdrawal benefit

LiF - Life income fund

LirA - Locked-in retirement account

LriF - Locked-in retirement income fund

oAs - old age security

rPP - registered pension plan

rriF - registered retirement income fund

rrsP - registered retirement savings plan

2 E i g h t s t E p s t o a b E t t E r r E t i r E m E n t

E i g h t s t E p s t o a b E t t E r r E t i r E m E n t 3

getting the most out of your retirement

you’ve worked hard to save for your retirement, so it’s only natural to want to do what’s best when it comes to your retirement income. making sure you can afford the retirement lifestyle you want is not a simple task, and you’re likely to have some questions and concerns. no matter how much you’ve put away, it’s important to create a financial retirement plan for your future.

This workbook is designed to help you get the most out of retirement. It will guide you through each step of the

decision-making process to help you consider the major factors that could affect your retirement income.

Some of the steps include summary worksheets for you to record your personal financial details. Be sure to

complete these worksheets as this information is used to determine your expected total annual retirement income.

A glossary is also provided to help you understand the terms used in this workbook.

thE Eight stEps to a bEttEr rEtirEmEnt

stEp 1 Calculate how much you’ll need page 4

stEp 2 Review your income from employment, government and miscellaneous sources page 6

stEp 3 Summarize your current investments and assets page 9

stEp 4 Learn how you can turn your investments into retirement income page 12

stEp 5 Understand the advantages and disadvantages of your retirement income options page 14

stEp 6 Determine your total annual retirement income page 18

stEp 7 Assess if your retirement income meets your needs page 19

stEp 8 Round out your retirement plan page 21

Your advisor is also available to provide support, answer your questions and offer advice on the products you need

to retire in the way that’s right for you.

stEp 1Calculate how much you’ll need

before you determine if you’ll have enough money for retirement, you need to think about what expenses you’ll have. Complete the retirement expenses worksheet to determine how much money you’ll need to afford the retirement lifestyle you want.

tiPs

try to pay off your mortgage and other personal debts before you retire.

Consider how much it would cost to hire someone to do things you or your spouse might not be able to manage because of health issues (e.g. shovel snow).

Without the daily commute to work, monthly travel costs are likely to decrease. factor in any senior discount you may receive on public transportation.

your monthly health expenses can be unpredictable. Check if the health benefits provided by your last employer will continue for you and your spouse into retirement.

Life insurance can make a dream of leaving a legacy to your loved ones a reality.

Clothing costs may decrease as your emphasis shifts from business attire to casual wear.

budget for travel, hobbies, and other leisure activities if they’ll be an important part of your retirement lifestyle.



housing Mortgage or rent $

Utilities (heat, hydro, water) $

Telephone $

Cable television/satellite $

Internet service $

Property taxes $

Insurance $

Maintenance/repairs $

Condominium fees $

Other $

transportation Car payment/lease $

Insurance $

Licence/registration $

Gas/oil/repairs $

Parking/taxi/bus $

Other $

health Health insurance $

Life insurance $

Prescription/non-prescription drugs $

Doctor(s)/dentist/optometrist $

Long term care services $

Other $

Talk to your advisor about your health and life

insurance options.

Living expenses Groceries $

Personal hygiene (haircuts, etc.) $

Clothing (purchase, cleaning) $

Alcohol/tobacco $

Other $

Entertainment Dining out $

Movies/theatre $

Newspaper/magazines/etc. $

Sports activities/hobbies $

Travel/vacation $

Membership fees $

Tuition fees for continuing education $

Other $

miscellaneous Income tax $

Professional dues $

Dependant support $

Gifts $

Donations $

Savings $

Emergency fund $

Pet care $

Other $

totaL monthLy ExpEnsEs

monthLy ExpEnsEs at rEtirEmEnt

rEtirEmEnt ExpEnsEs WorkshEEt

Use your expected total household cost per month at retirement to fill in each applicable section below.

Convert expenses to a monthly figure and remember to increase expenses to account for inflation from now

until your expected retirement.

$


EmpLoymEnt-rELatEd sourCEsWhile working, you may have contributed to registered pension plans (rpps) set up by your employer(s). there are two types of rpps:

1 defined benefit 2 defined contribution

When you retire, you start collecting from your pension plans instead of contributing to them.

In addition to your pension plans, you may have also contributed to other savings plans through your employer(s), such as group

registered retirement savings plans (group RRSPs), deferred profit sharing plans (DPSPs) or other employee savings plans. When

you retire, you need to use these savings to purchase retirement income plans (like registered retirement income funds (RRIFs) or

payout annuities). Your options will vary depending on the type of savings plans the funds are taken from. A glossary is provided at

the back of this workbook to help you understand these terms.

Contact your employer(s) to determine how much you have in each plan and how much income the plan(s) will generate. Record

this information on the employment-related annual income section on the Annual income summary worksheet on page 8.

stEp 2review your income from employment, government and miscellaneous sources


govErnmEnt sourCEs

Canada pEnsion pLan (Cpp)/QuEbEC pEnsion pLan (Qpp)

Anyone who has contributed to the CPP or QPP is

eligible to receive a pension benefit from the plan once

they retire. The amount you receive depends on:

how much you’ve paid into the plan,

how many years you’ve worked, and

the age at which you started to receive the benefit.

There are three types of income benefits offered by

CPP/QPP:

retirement benefits – for retirees

Disability benefits – for disabled contributors and

their dependent children

survivor benefits – for a deceased contributor’s

estate, surviving spouse or common-law partner and

dependent children

oLd agE sECurity (oas)

The OAS pension is available to all Canadians age 65 and

older as long as certain eligibility requirements are met.

You must apply for it to receive it.

You’ll be taxed on any amount you receive. In fact, if you

are in a higher tax bracket upon retirement, some or all

of your OAS pension will be returned to the government

through taxes on your income.

The guaranteed income supplement is an additional

benefit of OAS. It’s available to pensioners who receive

little or no income aside from the OAS pension. It’s not

taxed and must be applied for each year. To estimate

how much you’ll receive from government sources:

Call the CPP office at 1-800-277-9914 or the QPP

offices at 1-800-463-5185 Visit the Government of Canada’s OAS and CPP/QPP

Web site at www.canadabenefits.gc.ca Choose your language

Under Life Events, select Retirement

Select your province or territory of residence

Select the program you want to learn about

Record this information on the government annual income section of the Annual income summary worksheet on the following page.

misCELLanEous sourCEs

Miscellaneous income sources may include things like:

Part-time work

Property rentals

Business income

Record this information on the miscellaneous annual income section of the Annual income summary worksheet on the following page.

Pension CheCkList

here are some of the questions you’ll need to ask your employer(s):

What will my pension amount be when i retire in x years?

at what age can i start receiving my pension?

at what age do i have to start receiving my pension?

is my pension amount fixed or does it go up each year? if it goes up, how are the increases calculated?

if i select a survivor benefit, does it reduce the pension amount i receive while living?

are my government benefits going to be reduced as a result of any pension payments i receive? if so, how does this work?


annuaL inComE summary WorkshEEtList the annual income you and your spouse expect to receive during retirement from employment-related, government and miscellaneous sources. not all sources may apply to you.

sELf spousE totaL

EmpLoymEnt-rELatEd annuaL inComE Company pension plans (Registered pension plans – RPPs) $ $ $

totaL EmpLoymEnt-rELatEd annuaL inComE $ $ $

govErnmEnt annuaL inComE Canada Pension Plan (CPP)/Quebec (QPP) Pension Plan $ $ $

Old Age Security (OAS) $ $ $

Other (e.g. Guaranteed Income Supplement, Widow’s Pension) $ $ $

totaL govErnmEnt annuaL inComE $ $ $

misCELLanEous annuaL inComE Part-time employment $ $ $

Property rentals $ $ $

Ownership interest in a business $ $ $

Other (e.g. foreign income or pension from another country) $ $ $

totaL misCELLanEous annuaL inComE $ $ $


over the years, you’ve accumulated a variety of investments and personal assets. now it’s time to look at how you can use those investments to provide a retirement income. but first you need a clear picture of what you have and where it is. you may want to contact your advisor or financial institution for a summary of your current investments.

use the investment summary worksheet(s) to summarize your current investments and assets. you may need to create your own expanded worksheet(s) if you have several investments and need more space.

invEstmEnt summary WorkshEEt(s)

Be sure to include all of your investments. A glossary is provided at the end

of this workbook to help clarify any confusing terms.

rEgistErEd invEstmEnts

These investments are registered with the Canada Revenue Agency. Both the amount

you put into a registered investment and the earnings from it are tax sheltered until

you withdraw them. Remember that the government requires that you convert all

of your registered savings to cash or move them into a retirement income product

by the end of the year in which you turn age 71. Some registered savings may not

be converted to cash because they are governed by pension rules. They allow the

investor to defer paying taxes on contributions and the income earned in the plan.

registered investment accounts include: Registered retirement savings plans (RRSPs)

Group RRSPs

Deferred profit sharing plans (DPSPs)

Employee profit sharing plans (EPSPs)

Life income funds (LIFs)

Locked-in retirement income funds (LRIFs)

Locked-in RRSPs/Locked-in retirement

accounts (LIRAs)

Registered retirement income funds (RRIFs)

Company pension plans

these registered accounts can be invested in: Guaranteed investment

certificates (GICs)

Accumulation annuities

Term deposits

Stocks and bonds

Mutual funds

Segregated funds

stEp 3summarize your current investments and assets

1 0 E i g h t s t E p s t o a b E t t E r r E t i r E m E n t

rEgistErEd invEstmEnt summary WorkshEEt

oWnErship (yourself or spouse)

invEstmEnt dEsCription

institution hoLding it

maturity datE (if applicable)

intErEst ratE (if applicable) %

CurrEnt vaLuE $

$

$

$

$

$

$

$

totaL rEgistErEd invEstmEnts $

non-rEgistErEd invEstmEnts

These investments are owned for general investment purposes. There are no tax deferral opportunities.

They can also be used to generate income.

non-registered investments can be invested in:

Chequing and savings accounts

Canada Savings Bonds

Guaranteed investment certificates (GICs)

Accumulation annuities

Term deposits

Stocks and bonds

Mutual funds

Segregated funds

Investment properties

Business investments and ownership

non-rEgistErEd invEstmEnt summary WorkshEEt


invEstmEnt dEsCription

institution hoLding it

maturity datE (if applicable)

intErEst ratE (if applicable) %

CurrEnt vaLuE $

$

$

$

$

$

$

$

totaL non-rEgistErEd invEstmEnts $

E i g h t s t E p s t o a b E t t E r r E t i r E m E n t 1 1

othEr pErsonaL assEts

Other personal assets are things you own that may be sold as you move into retirement, like your:

othEr pErsonaL assEts summary WorkshEEt


dEsCription LiQuidityCan it be sold quickly and easily? (yes/no)

gross rEsaLE vaLuE

nEt rEsaLE vaLuE (gross resale value minus selling costs, commissions, tax payable on the sale and outstanding loan)

$ $

$ $

$ $

$ $

$ $

$ $

$ $

totaL pErsonaL assEts $

totaL invEstmEnts and assEts for housEhoLd (rEgistErEd + non-rEgistErEd + othEr pErsonaL assEts)

home

recreational property

automobile

personal and household items

cash value of life insurance

$

your invEstmEnts at rEtirEmEnt

In order to understand what your

investments could be worth when

you retire, you’ll need to do some

calculations. Take the values of

your registered and non-registered

investments from the investment summary worksheet(s) to project

what these might be worth at retirement

and record the information to the right.

Your advisor is also available to help

you estimate your retirement income.

invEstmEnt projECtion CaLCuLator Registered investments: $

Non-registered investments: $

Planned retirement age:

Age to project to:

during your retirement Expected rate of return of your investments %

Expected inflation rate %

Marginal tax rate %

totaL projECtEd vaLuE at rEtirEmEnt (aftEr tax): REGISTERED $

NON-REGISTERED $


how you turn your investments and assets into a retirement income depends on the source of your savings. this step helps you understand what income options are available to you.

stEp 4Learn how you can turn your investments into retirement income

if your monEy is Coming from rEgistErEd non-LoCkEd-in vEhiCLEs:

The money has been contributed to

plans like an RRSP, a spousal RRSP, or a

DPSP. These investments are registered

with the Canada Revenue Agency.

These savings can be used to provide a

retirement income or withdrawn in cash

before or at retirement.

your retirement income options include:

Cash

RRIF

Payout annuity

if your monEy is Coming from rEgistErEd LoCkEd-in vEhiCLEs:

The money originated from a company

pension plan sponsored by an

employer. If the employee terminates

employment, the money may be

transferred to a:

New employer’s pension plan (RPP)

Locked-in RRSP

LIRA

Generally, the money cannot be

converted to cash in most provinces

and must be used to purchase a payout

annuity or locked-in retirement income

product. Many pension jurisdictions

have revised their pension legislation

to allow some unlocking of pension

assets. The balance must remain in

locked-in income options.


Payout annuity

LIF. Not available in all provinces.

LRIF. Not available in all provinces.

if your monEy is Coming from non-rEgistErEd invEstmEnts:

Includes money held in non-registered

savings accounts, Canada Savings Bonds,

GICs/term deposits, stocks/bonds,

mutual funds, etc., as well as money from

the sale of personal assets, including your

home, recreational properties, etc.


Continue to invest or reinvest these

investments.

Purchase a payout annuity to

provide an income for life or for a

specific number of years.

Use the cash to supplement your

income. This can be done through

interest income options or systematic

withdrawal plans or through a

guaranteed withdrawal option.


dECidE WhiCh rEtirEmEnt inComE option is right for you

The following chart outlines the benefits of each product and may help you decide

what features are important to you. You may want to consider a combination of

products (e.g. a RRIF plus a payout annuity).

fEaturE

rrif

payout annuity

guarantEEd LifEtimE

WithdraWaL bEnEfit

provides potential income growth through market exposure.

gives control over a selection of market opportunities.

allows you to reduce your exposure to the market.

provides income that can fluctuate from year to year, depending on your needs.

provides access to additional funds to cover emergencies.

**

allows you to set a regular income frequency.

provides a value on death or a death benefit.

*

provides a regular level income.

offers an option for guaranteed lifetime income.

offers a joint life option

offers indexing to keep up with inflation.

* The death benefit applies during the guaranteed period.** Additional withdrawals may reduce future income.

your advisor has the expertise to answer any questions you have and offer sound personalized advice on the product or combination of products that best help you meet your retirement income needs.

tiPs

Withdrawing cash could mean you lose up to 46 per cent of your savings in tax.

if you’re age 71 or under, you could transfer your dpsp money to your rrsp on a tax-sheltered basis; then purchase a rrif. alternatively, you can use your dpsp to purchase a payout annuity.

keep in mind, withdrawing money in cash from a spousal rrsp may trigger tax in the hands of the contributor rather than the owner.

the government requires that you convert all of your registered savings including locked-in retirement investments into a retirement income or cash (non locked-in) product by the end of the year that you turn 71.

if you are 71 or under and are eligible to make rrsp contributions, you could maximize those contributions. then purchase a rrif and/or a payout annuity to provide an income.


in step 4, you’ve seen that when you retire, you turn some or all of your investments into an income by purchasing retirement income products. the following information helps you consider the advantages and disadvantages of the various retirement income options available to you.

your advisor is always available to provide you with support, answer your questions and offer advice on products available to you.

stEp 5understand the advantages and disadvantages of your retirement income options

disadvantagEs

Any amount you withdraw from registered investments is treated as taxable income during that income tax year. You could pay tax of up to 46 per cent on the amount you withdraw (applies to registered funds only).

It may not provide a steady stream of income.

Depending on the amount of money invested and your rate of withdrawals, you may end up exhausting your capital earlier than you would like or impact future income amounts.

WithdraW your invEstmEnts in Cash

advantagEs

This option gives you access to a lump sum of money whenever you need it. The money can be used any way you choose (e.g. for travel, household improvements or for nursing or medical costs incurred by you or your spouse).

things to remember

for rEgistErEd invEstmEnts (non-LoCkEd-in)remember that the government requires you to convert all registered investments to cash or move the funds into a retirement income product by the end of the year in which you turn 71. your retirement income options include:

Cash payout annuity (as outlined on page 15) (income for life or until age 90) registered retirement income fund (rrif)


purChasE a payout annuity

advantagEs

A payout annuity offers you the security of a guaranteed income. You have peace of mind knowing exactly how much that income will be.

When the plan is set up, you can choose to receive a lower initial income with annual increases to help offset inflation.

Several types of payout annuities are available. You can choose the one that offers the features that best meet your personal situation.

The amount of income you receive depends on your age, the amount of money invested and the type of payout annuity you choose. There are two types of payout annuities to choose from.

Life annuity – You have the option to receive an income for as long as you live or that lasts for your and your spouse’s lifetime (joint life annuity). You can also select a guaranteed period. During this period, payment will be made regardless of whether or not you (or your spouse in the case of a typical joint life annuity) are alive. If you die before the end of the guaranteed period, the income will continue or a death benefit will be paid to your beneficiary(ies) for the payments remaining in that period. If the funds are registered, the maximum guaranteed period available is to age 90. You’ll continue to receive income if you live beyond this period.

term certain annuity – This guarantees you with an income for a select period of time. If you die before the end of the term, your beneficiary is entitled to receive the balance (the present value) of the income stream remaining in the annuity. With the proper beneficiary designation, this death benefit may bypass probate and solicitor’s fees and be paid directly to the beneficiary.

The proceeds are taxable in the hands of the estate.

disadvantagEs

Once the plan is set up, you can’t make any changes to the amount of income you receive.

Cash withdrawals to cover emergencies are not permitted.

With a life annuity, the death benefit for your beneficiary is generally equal to the present value of any income remaining in the guaranteed period. There is no death benefit after the guaranteed period.

With a term certain annuity, your income payments finish at the end of the term.

purChasE a guarantEEd LifEtimE WithdraWaL bEnEfit*

advantagEs

It provides you with a guaranteed level of income for life

while maintaining a growth-oriented investment strategy.

You have full access to funds if you need them.

During the first 15 years, your income base will be

guaranteed to grow by 5% regardless of negative

investment performance as long as you do not make any

withdrawals, including income payments, during that time.

It resets every three years during the income stage which

allows you to potentially increase your guaranteed

withdrawal income.

* You purchase a segregated fund contract which provides a guaranteed

lifetime withdrawal benefit. Available through SunWise Essential Series

Income class funds.

disadvantagEs

Excess withdrawals above the guaranteed amount may

exhaust the plan earlier than you would like and will

affect future income amounts.

Invested assets could be impacted by negative market

performance, which may not affect the income

guarantee but could reduce future estate value.

However, the estate value cannot be less than the

guaranteed death benefit.

It does not have inflation indexing.


purChasE a rEgistErEd rEtirEmEnt inComE fund (rrif)

advantagEs

A RRIF gives you control over the income you receive. You must withdraw the legislated minimum amount each year, but have the option to increase your income or withdraw extra money to cover emergencies, vacations etc.

Only the amount you withdraw each year becomes taxable income. The remainder of your capital will remain tax-sheltered as it grows.

Keep your money working for you by choosing from a wide range of investments that provide security, income and growth to help protect against inflation.

If you decide you prefer the security of a more guaranteed retirement income, a RRIF can be converted to a payout annuity.

At the time of your death, the balance remaining in your RRIF can be:

used to provide an income to your surviving spouse, transferred, tax-sheltered, by your spouse to a personal

RRSP or RRIF, or paid to your beneficiary. With the proper beneficiary

designation, this death benefit may bypass probate and solicitor’s fees and be paid directly to the beneficiary. RRIF proceeds to a non spouse are taxable in the hands of the estate.

disadvantagEs

There is no upper limit on the amount of money you may withdraw from a RRIF. Depending on the amount of money invested and your rate of withdrawals, you may end up exhausting your RRIF earlier than you would like or affect future income amounts.

Money coming from a spousal RRSP must be transferred to a spousal RRIF within the first few years after the last spousal contribution. Withdrawing more than the minimum required annual amount may trigger tax for the contributor rather than the owner of the spousal RRIF.

Depending on the investments you choose, the value of your savings could be impacted by fluctuations in market conditions.

Over time, the capital in your RRIF decreases and your

income amount may decline.


purChasE a LifE inComE fund (Lif) or a LoCkEd-in rEtirEmEnt inComE fund (Lrif)

advantagEs

Tailor the income you receive to meet your needs.

You must withdraw the legislated minimum each year,

but can increase your income up to the maximum

annual withdrawal limit.

The maximum annual withdrawal limit ensures that

there will be sufficient funds to provide income for

the rest of your life.

You’re able to withdraw extra money to cover

emergencies, vacations, etc., provided you don’t

exceed the maximum annual withdrawal limit.

Only the amount you withdraw each year is

taxable income.

Choose from a wide range of investments that

provide security, income and growth to help protect

against inflation.

Depending on pension legislation, at the time of your

death your surviving spouse may receive the remaining

balance in cash or be able to transfer it on a tax-

sheltered basis depending on his/her age, to a personal

RRSP, RRIF or payout annuity.

With the proper beneficiary designation, the remaining

balance may bypass probate and solicitor’s fees and be

paid directly to the beneficiary. The proceeds to a non

spouse are taxable in the hands of the estate.

Down the road, if you prefer the security of a more

guaranteed retirement income, you can convert your

LIF or LRIF to a payout annuity.

disadvantagEs

There is a limit to the amount of money you can

withdraw each year.

Depending on the investment vehicles you choose,

the value of your savings could be impacted by

fluctuations in market conditions.

LIFs and LRIFs are not available in all provinces.

In Newfoundland and Labrador, a LIF must be used to

purchase a payout annuity by the end of the year in

which you reach age 80.

your advisor can help you choose the appropriate income plan that would work best for you and determine how much income the plan will generate.

things to remember

for rEgistErEd invEstmEnts (LoCkEd-in)

your retirement income options include: payout annuity (as outlined on page 15) Lif Lrif

for non-rEgistErEd invEstmEnts

your retirement income options include: Cash withdrawals (as outlined on page 14) payout annuity (as outlined on page 15) guaranteed lifetime withdrawal benefit (as

outlined on page 15)

things to remember


in step 2, you recorded income amounts from various sources. in steps 4 and 5, you learned more about retirement income plans. in this worksheet, you’ll list the annual income you and your spouse (if applicable) expect to receive from all of these sources of retirement income.

annuaL rEtirEmEnt inComE WorkshEEt

sELf spousE totaL

various sourCEs Employment-related annual income (from page 8) $ $ $

Government annual income (from page 8)

Miscellaneous annual income (from page 8) $ $ $

rEtirEmEnt inComE pLans RRSP – periodic withdrawals $ $ $

RRIF $ $ $

LIF $ $ $

LRIF $ $ $

Payout annuity $ $ $

Guaranteed Lifetime Withdrawal Benefit $ $ $

othEr (if not usEd to purChasE an inComE pLan)

Non-registered investments cash withdrawals $ $ $

totaL gross annuaL rEtirEmEnt inComE (bEforE tax) $ $ $

totaL gross monthLy rEtirEmEnt inComE $ $ $

(annuaL rEtirEmEnt inComE ÷ 12)

stEp 6determine your total annual retirement income


now that you’ve determined your expected gross retirement income in step 6 and expenses in step 1, use the tally worksheet to calculate if you’ll have enough income to afford your desired retirement lifestyle.

taLLy WorkshEEt

totaL gross monthLy rEtirEmEnt inComE (from pagE 18) $

minus totaL monthLy ExpEnsEs (from pagE 5) – $

surPLus or shortFALL = $

if you have a surplus, this could help you live your retirement your way.

you may find that the income you expect to receive isn’t enough to cover the expenses you anticipate. this shortfall could keep you from reaching your retirement lifestyle goals. you may want to consider part-time work, or one of these possible solutions:

inCrEasE your invEstmEnt rEturn

When investing your money, you may have tried to minimize risk by investing in safer, lower-yield investments. The

effects of inflation are much stronger on lower long-term returns, and the result could be that you won’t have enough

income. Take a look at your investment mix to determine how you can best keep your money working for you. Your

advisor can help you decide what approach works best for you.

sELL pErsonaL assEts

In Step 3, you learned how money from the sale of personal assets like a house, recreational property, cars and other

valuables can be invested or used to supplement your income.

stEp 7assess if your retirement income meets your needs


doWnsizE to a smaLLEr housE

One of the biggest benefits of downsizing to a smaller

house is that you will free up some capital to generate

income. Maintaining a house can be costly, but living in a

smaller house can reduce your maintenance costs. If you

can decrease maintenance costs by $1,000 a year, it’s like

putting an additional $1,700 into your pocket (depending

on your tax bracket).

inComE spLitting

You and your spouse may apply for an “assignment” of

your Canada Pension Plan (CPP)/Quebec Pension Plan

(QPP). The pension you earned during the marriage is

split equally, allowing you to take advantage of income

splitting in retirement. Income splitting works best when

income that would have been taxed at a higher rate in

one spouse’s hands is taxed at a lower rate in the other

spouse’s hands. To be eligible for an assignment of your

CPP/QPP, both spouses need to be at least 60 years of

age and earn an employment income of less than the

maximum CPP/QPP benefit payable in that year. To apply

for assignment, contact the Income Security Program,

Canada Pension Benefits at 1-800-277-9914, or QPP at

1-800-463-5185.

takE onLy What you nEEd

Income tax is only payable on the money you withdraw.

So when withdrawing money from a RRIF, LIF, or LRIF,

take only what you need each month. This allows your

money to accumulate tax-sheltered for as long as

possible. At the end of the year, you can withdraw any

additional income required to bring your total income

up to the legislated minimum.

WithdraW monEy at yEar End

If you’re not dependent on the income you’ll receive from

a RRIF, LIF or LRIF, withdraw your money at the end of the

year to keep it tax-sheltered for as long as possible.

WithhoLd morE tax during your rEtirEmEnt

When withdrawing money from a RRIF, LIF, or LRIF, the tax

withheld by the institution may be less than your personal

tax rate. To avoid being hit with a large tax bill at income

tax time, you can request to have more tax withheld. To

have additional tax withheld, contact your advisor.

non-rEgistErEd savings

Over the years, you’ve probably accumulated a mix of

registered and non-registered savings. Drawing an income

from your non-registered savings first allows you to keep

your registered money intact – and defer taxes – for

as long as possible. However, as time goes on and you

are left with only registered savings to draw from, you

may find yourself paying tax at a very high rate. A better

solution may be to take a blend of income from both

registered and non-registered savings throughout your

retirement to enjoy a more moderate tax rate. By keeping

some non-registered savings on hand at all times,

you’ll have the funds available to cover unexpected

emergencies or even for taking that trip of a lifetime!

tiPs

tax is payable on the retirement income you receive. if tax is not deducted at source, be sure to set aside enough money to pay the tax bill in april.

an emergency fund helps cover unexpected or occasional expenses (e.g. new roof, dream vacation).


here are some additional steps to help you get the most out of your retirement.

stEp 8round out your retirement plan

ConsidEr your hEaLthWe’re all vulnerable to accidents, illnesses, and the effects of aging that can change the way we live and seriously impact our income and savings.

While government health care programs pay for basic in-hospital care and visits to the doctor, many other health-related expenses aren’t covered. If this concerns you, it’s good to know there are different kinds of private

health insurance.

pErsonaL hEaLth insuranCE

If you’ve had drug, dental and supplementary health coverage through your employer, you know how valuable it is. Be sure to ask whether that same coverage will be available to you in retirement. If your coverage won’t continue, you still have options with personal health insurance. Personal health insurance provides coverage for many ongoing health-related services not covered by

government plans.

Long tErm CarE insuranCE

If you’re unable to care for yourself because of an illness, accident or deteriorating physical or mental abilities, long term care insurance helps bridge the gap between your personal finances and government sponsored services. There are more costs than you might think: from hiring a personal support worker or someone to perform

chores around your home to paying for accommodation in a retirement home or long term care facility. A long term care insurance policy can help you obtain the quality of care you want in the setting of your choice, without having to deplete your savings. Different types of long term care insurance policies exist. Some provide reimbursement for eligible expenses; others provide you with cash to spend as you choose.

When it comes to protecting your retirement plan, know the facts and consider the benefits of health insurance as part of your overall financial plan. Personal health insurance and long term care insurance are geared towards your needs in retirement. Disability insurance and critical illness insurance are other forms of health insurance that may also be applicable to your personal situation. Your advisor can help clarify your options and provide advice about the solutions that best suit your needs and financial situation.

tiP

find out what long term care costs in your region. a long term care cost of $2,000 per month could deplete $200,000 of savings in about 10 years.*

* Impact of removing $2,000 per month

from savings of $200,000, earning 6%

interest with inflation of 2%.


prEsErvE your EstatE

Life insurance helps you round out your financial

picture by:

replacing the capital you used for your retirement

income to provide an estate for your heirs

maximizing your retirement income by eliminating the

need to set aside funds for gifts, inheritances, income

tax, capital tax, capital gains tax and other fees

associated with your estate, etc.

replacing or supplementing any group life insurance

provided by a previous employer that may reduce or

terminate upon your retirement

providing the funds necessary to pay the taxes due on

your estate upon death, ensuring your heirs receive

their full inheritance

covering funeral and burial expenses which can range

from $7,500 to $20,000. Add to that legal fees, executor/

liquidator fees and probate fees, which are usually based

on a percentage of the value of your estate.

tiPs

WiLLa properly prepared will is critical to successful estate planning. it gives you the opportunity to put the right person in charge as executor and to designate who will inherit your assets. remember to update your will as changes in your life occur.

these changes may include: a death, birth, marriage, divorce of your heirs your divorce or marriage a change in the value of your property a change of residence, or acquisition of property in

another province or country a major unexpected increase or decrease in your

net worth (or net assets) a major change in your insurance program changes in tax laws affecting inheritances.

invEstmEnts

Whether you’re saving for a large purchase, the vacation

of a lifetime, or want to leave an inheritance for your

family, an investment account can help you achieve

these goals. To learn more about the benefits of specific

investment products and getting the most out of your

retirement savings, contact your advisor.

basE your rrif rEtirEmEnt inComE pLan on your spousE’s agE

As you get older, the minimum amount of income that

you’re required to withdraw from a RRIF increases. If your

spouse is younger than you, you may be able to reduce

the minimum amount of income that you need to take

from your RRIF each year. Basing the plan on your spouse’s

age may allow you to reduce your taxable income.

gEt ExpErt adviCE

Contact your advisor if this workbook has left you with any

questions about the right retirement income plan for you.

poWEr of attornEypeople often arrange their financial affairs for retirement and death, but seldom consider administrative requirements should they become temporarily or permanently incapacitated. by appointing another person under a power of attorney, you allow someone you trust to manage your property (e.g. home and/or your personal care, such as medical treatment) if you become unable to act, due to illness or disability. many provinces have made or are in the process of making changes to regulations regarding power of attorney. your lawyer or legal advisor can assist in the preparation of a power of attorney.


gLossary of tErmsassEt

Property or investment that has cash value.

CapitaL gain

Profit from the sale of assets such as investments or

property that must be reported as income.

dEfErrEd profit sharing pLan (dpsp)

A profit sharing plan under which the employer makes

tax deductible contributions; employee contributions

are not allowed. Contributions are not taxable to

the employee until they are withdrawn. The plan is

registered under the Income Tax Act.

divErsifiCation

A strategy that helps reduce the risk associated with

investing by spreading investments over a range of

funds or investment type to balance risk exposure.

EQuitiEs

Ownership interest in a corporation in the form of

common stock or preferred stock.

ExECutor/ExECutrix

An individual or institution appointed in a will to settle

the estate of the deceased.

guarantEEd invEstmEnt CErtifiCatE (giC)

A fixed-dollar deposit with a bank or other financial

institution with a pre-determined rate of return and

term (e.g. one-year, five-year, etc.). Funds in a GIC can

be typically accessed prior to maturity but a penalty

or market value adjustment is generally applied.

guarantEEd LifEtimE WithdraWaL bEnEfit (gLWb)

On SunWise Essential Series segregated funds the GLWB

can provide a secure annual income beginning as early

as age 55. In the years before retirement, the 5% annual

bonus helps you to build your guaranteed income

(assuming no withdrawals are made during those years).

guarantEEd pEriod

The time that the death benefit is guaranteed in

a payout annuity. If the annuitant dies within the

selected guaranteed period, the beneficiary will

receive a death benefit. If a guaranteed period isn’t

selected, there will be no death benefit.

inComE spLitting

A tax planning strategy where the higher income

earner arranges for income to be transferred to a

family member(s) in a lower tax bracket, thus reducing

taxes for the higher income earner.

infLation

The overall general upward price movement of goods

and services in the economy, usually measured by the

Consumer Price Index (CPI).

LEgisLatEd maximum

Based on a legislated formula of the various pension

jurisdictions that stipulates the maximum amount that

an individual can withdraw each year from a life income

fund (LIF) or locked-in retirement income fund (LRIF).

LEgisLatEd minimum

An Income Tax Act requirement that stipulates the

minimum amount an individual must withdraw each

year from a registered retirement income fund (RRIF),

life income fund (LIF) or locked-in retirement income

fund (LRIF).

LifE inComE fund (Lif)

One of the retirement income options available for

locked-in money in a registered retirement savings

plan (RRSP), a registered pension plan (RPP) or a

locked-in retirement account (LIRA). Tax and pension

legislation regulates the minimum required and

maximum allowed to be withdrawn each year.


LoCkEd-in monEy

This is money originating from a registered pension

plan (RPP) sponsored by an employer. The employer

makes contributions to the RPP. The employee may or

may not be required to make contributions to the RPP.

After a certain number of years, the money becomes

“locked-in,” meaning it can’t be withdrawn in cash. If the

employee terminated employment, he/she may be able

to transfer the money to his/her new employer’s RPP,

a locked-in registered retirement savings plan (RRSP), a

locked-in retirement savings plan (RSP) or a locked-in

retirement account (LIRA). Ultimately, the money must

be used to purchase a retirement income product,

e.g. a payout annuity, life income fund (LIF), locked-in

retirement income fund (LRIF).

LoCkEd-in rEtirEmEnt aCCount (Lira)

A registered plan for employees who leave a company

with a pension plan. The LIRA shelters pension money and

investment earnings from taxation on a locked-in basis.

LoCkEd-in rEtirEmEnt inComE fund (Lrif)

A registered plan that shelters pension money and

investment earnings from tax on a locked-in basis

while generating retirement income for the fundholder.

Legislation requires a minimum and maximum

withdrawal amount be taken each year from the plan.

marginaL tax ratE

The rate of tax paid on the highest band of earnings of

a taxpayer. The rate indicates how much tax would be

paid on each additional dollar of income at that band

level reported on the tax return. For example, if the

marginal tax rate is 43%, the amount actually pocketed

is 57 cents of each dollar earned after taxes.

markEt-basEd funds

Investments that derive all or most of their growth

from securities that are actively bought and sold on

the stock market. Unit value fluctuates with the market

value of the underlying securities.

maturity datE

When an investment becomes available for

reinvestment at the end of a term.

mutuaL funds

Combines the assets of many investors into a single pool,

and is managed by a professional investment manager.

non LoCkEd-in monEy

This is money that has been contributed to things like a

registered retirement savings plan (RRSP), a spousal RRSP

or a deferred profit sharing plan (DPSP). These savings

may be used as a source of retirement income. Non

locked-in money may also be withdrawn in cash prior to,

or at retirement, to fund a special purchase, trip, etc.

non-rEgistErEd invEstmEnts

Investments that are owned for general investment

purposes. The savings are after-tax dollars and the

interest growth earned is taxable in the year it’s earned.

payout annuity

A retirement income plan that provides a guaranteed

income stream for life or for a specified period of time.

portfoLio

The entire combination of securities or investments an

individual or institution holds. A portfolio can contain

a variety of government and company bonds, preferred

and common stocks from different businesses and

other types of securities and assets.

poWEr of attornEy

A legal document designating an individual to act on

another’s behalf.

rEgistErEd invEstmEnts

This is money that has been contributed to things like a

registered retirement savings plan (RRSP), a spousal RRSP

or a deferred profit sharing plan (DPSP). These savings

may be used as a source of retirement income, and allow

the investor to defer paying taxes on contributions and

the income earned in the plan. These investments are

registered with the Canada Revenue Agency.


rEgistErEd pEnsion pLan (rpp)

An employer-sponsored plan registered with the

Canada Revenue Agency, established to provide

pension income benefits for its employees when they

retire. Both employee and employer contributions to

the plan are tax deductible.

rEgistErEd rEtirEmEnt inComE fund (rrif)

A tax deferral retirement income plan available when

registered money is converted to an income. It’s available

for non-locked-in money in a registered retirement plan

(RRSP), a spousal RRSP, a registered pension plan (RPP)

or a deferred profit sharing plan (DPSP). The plan holder

invests in funds within the RRIF, and must withdraw a

predetermined percentage of the total assets legislated

by the Canada Revenue Agency each year.

rEgistErEd rEtirEmEnt savings pLan (rrsp)

A savings plan set up in accordance with the Income

Tax Act to hold certain investments intended for

retirement income. The investments and any interest

earned won’t be taxed as long as it’s left in the plan.

rEtirEmEnt inComE pLan/options

When it comes time to draw on registered retirement

savings for income, retirement income plans provide access

to some of this money while continuing to tax-shelter

the remaining investments. All of the money in registered

retirement savings vehicles must be transferred to an

income plan by the end of the year an individual turns 71.

sEgrEgatEd funds

Segregated funds are pooled investments separate from

the assets of an insurance company. The purchaser is

allocated notional units of the fund. The value of the units

fluctuates according to the value of the securities held

in the pool. Segregated funds are available by purchasing

a segregated fund contract, which is a type of annuity

contract. These contracts have maturity and death benefit

guarantees and may have an income guarantee. Because it

is an annuity contract, the death benefit may be excluded

from probate with a proper beneficiary designation and

creditor protection may be available.

spousaL rEgistErEd rEtirEmEnt savings pLan

This is an RRSP owned by the spouse of the person

contributing to it. The contributor can direct up to

100% of eligible RRSP deposits into a spousal RRSP

each and every year. Contributing to a spousal RRSP

reduces the amount one can contribute to one’s own

RRSP, however, if the spouse is a lower income earner,

it’s an excellent way in which to split income for a

lower taxation in retirement years.

sunWIse EssEntiaL sEriEs*

By investing in Income Class, you receive the

Guaranteed Lifetime Withdrawal Benefit, that can

provide a secure annual income beginning at the age

of 55, regardless of the investment performance of the

portfolio. With the first 15 years providing a 5% annual

bonus as long as no income is taken, this product can

help you build income in the years before retirement.

* This is Sun Life Financial’s current segregated fund contract.

WiLL

A written legal document directing the disposition of

property to designated individuals upon death.


notEs

© Sun Life Assurance Company of Canada, 2012.

810-3562-02-12

Create a bright futurebuild. Protect. enjoy!

Your advisor and Sun Life financial are here to help.

Some call it retirement, others think of it as the start of something new. When it comes to preparing for life after work, an advisor and Sun Life Financial can help you figure it all out. We’ll work with you to build a plan that suits your life’s goals, and evolve that plan as your needs and situation change. This is your time. Together, we’ll help you get the most out of it.

Sun Life Financial (TSX:SLF) is a leading international financial services organization providing a diverse

range of insurance and investment products and services to individuals and corporate customers.

We’re dedicated to helping you achieve lifetime financial security.

talk to an advisor about sun Life financial today! for more information and resources:

Visit www.sunlife.ca/myretirement

Call 1 877 sun-LifE (1 877 786-5433)

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