Retirement Income Planning

In this day and age, planning for retirement is the responsibility of each individual. And as each of us reaches retirement, we expect that-according to our well-conceived retirement plan—our resources will easily fulfill our needs and desires.

While retirement planning is up to the individual, you don't have to go it alone; Capital Estate Planning is here to help. With a team of professional advisors to guide you, we offer many options to help you attain your personalized retirement goals.

To read about our retirement income planning services, please choose one of the options below:

» Choosing the Right Retirement Income Option
» Registered Retirement Income Funds (RRIFs)
» Annuities
» Retirement Income Projections
» Reducing Taxes at Death

Choosing the Right Retirement Income Option
At first glance, the retirement income options can be confusing. But they don't have to be. With a little planning and a financial strategy in mind, you will be able to choose the option or options that will best fit your needs.

What you decide to do with your retirement savings will depend on your needs and those of your family. Spending some time figuring out what those requirements are will help you determine which income option or combination of options will help keep your money working for you.

Registered Retirement Income Funds and Annuities are the "back end" of an RRSP. They all involve the withdrawal, over time, of the money invested into your RRSP. Each option has a number of different characteristics concerning investor control, withdrawal period, withdrawal amount, transfer of assets, tax concerns, and more.

Do you want complete control and flexibility of your retirement savings? If so, an RRIF may be your best choice for non-locked-in savings. Is it important to have a guaranteed and predictable retirement income during your lifetime and that of your spouse? If so, you may want to consider a life annuity. If you want some income that is guaranteed AND some that is flexible, a combination of income options could work out well. For instance, you may want to purchase a life annuity to cover your basic expenses including food and shelter and receive the rest of your money in a more flexible way.

The following information explains how the various options can meet your particular requirements at retirement.

Registered Retirement Income Funds (RRIFs)
An RRIF is a popular option for accessing non-locked-in savings, such as RRSPs, to provide income during retirement. An RRIF offers considerable income flexibility, while at the same time, your savings remain tax sheltered and under your investment control. You have the additional flexibility of being able to adjust how much income you receive, how often you receive it, and even how it is invested. (A minimum amount must be paid to you from your RRIF as taxable income each year after the year you set it up.)

In most cases you can establish an RRIF any time before the end of the year in which you turn 71 years. This is done by transferring some or all of your savings directly from an RRSP. Savings can include funds from a company pension plan (as long as the funds are not locked-in) or a deferred profit-sharing plan. No tax is payable when transferring RRSP or Registered Pension Plan (non-locked-in) savings into a RRIF. All RRIF investment income accumulates tax-free under the plan, and only withdrawals are taxable. RRIFS are very popular retirement income choices.

Annuities
Until recently, a life annuity was the only vehicle for providing retirement income for savings that have been locked-in. Annuities can ensure a guaranteed income for the rest of your life. Savings that are not locked-in may also be used to purchase an annuity.

An annuity will provide you with a series of payments for a specified number of years after retirement. Or, it will provide payments for your life, your spouse's life, or the lifetime of both you and your spouse. This guaranteed income offers both stability and security. For many, this is an easy, worry-free answer to retirement income needs. Different types of annuities are available, including the following:

• A life annuity, which provides income payable as long as you live, most often with a number of years of payments guaranteed to your beneficiary. The most common period selected by people is 10 years.
• A joint life annuity, which provides income payments for as long as you and your spouse live.
• A term certain annuity gives you a specified number of income payments. If you die before all the specified payments have been made, a death benefit is paid to your beneficiary. This option is particularly useful in situations where income is required for a specific length of time. For example, a five-year term may be selected to cover five years remaining on a mortgage.

A combination of different types of annuities will provide you with income flexibility.

If you want some income that is guaranteed AND some that is flexible, a combination of income options could work out well. For instance, you may want to purchase a life annuity to cover your basic expenses including food and shelter and receive the rest of your money in a more flexible way.

Retirement Income Projections
In addition to advisory services, Capital Estate Planning is happy to provide our clients with computerized personal retirement income projections to assist in decision making and wealth management.

This is a unique service that Capital Estate Planning is proud to offer on a fee for service basis. We use an innovative software tool that is exclusive to professionals only. The software is designed to perform the time-consuming calculations necessary to prepare a comprehensive financial plan for your personal circumstances. It shows where your finances are today and where they are projected to be at any time in the future, based upon whatever set of economic assumptions you choose.

Reducing Taxes at Death
You have a sizable amount built up in your RRSP or your RRIF.

What happens if you die before you can use that money? Or what if you want to leave some of that money to your children or grandchildren? If you have a spouse, you can transfer it to that person and it will stay intact. But if you don't have a spouse, your heirs stand to lose up to 40% of your hard earned money to taxes.

There is a way to ensure that the full value of your estate goes to your loved ones rather than to Revenue Canada. Talk to us about a Joint-Last to Die insurance policy, or the new 100% tax deductible charitable giving options. Talk to us about answering those "what if" questions.

Ensure that your loved ones, not Revenue Canada, are your major beneficiaries.