June/July Newsletter

This article was first distributed by Canada Life several years ago. Since it’s been a while, we thought that it would be useful to republish for your convenience.

You’ve worked hard to save for retirement. Now that you’re Getting Close, you will likely have many questions about the transition from saving for retirement to receiving income in retirement. For example:

• Will I have enough money to make it through retirement?
• What do I have to do with my savings plans?
• Are there guaranteed payments?
• What option is right for me?
• How can I get help that I can trust?

This can be one of the most complex financial decisions that you’ll have to make. Canada Life’s Investment and Retirement Specialist team can help. They will walk you through the process and make it simple for you, so you can retire in comfort and with confidence.

Here’s what to expect when you speak to one of the investment and retirement specialists
First, they provide a great source of expertise that can help you understand your retirement options, navigate through complex legislation, and create a strategy that will make your income last through retirement. And once you have connected with an Investment and Retirement Manager, that personal contact can continue. You can build a relationship with an expert that you can trust, before and after you retire. Canada Life’s IRMs are salaried employees with an average of 20 years’ experience in the financial services industry. Among their many qualifications, our IRMs are life insurance licensed and have their CERTIFIED FINANCIAL PLANNER® designation. So you can be confident that we are providing your members with retirement income solutions based on sound, objective guidance and investment education.

Guiding you to your retirement destination
Our objective is to educate and help you develop a retirement income strategy that best suits your needs. To do this, our IRMs follow the steps below.

Stage 1—Engaging the member
Contact the plan member: An IRM will either respond to a member’s request for assistance via our client service centre, or reach out to a member who has recently retired and received an option package. This contact will be either by phone or email, or both, using the phone number and email provided by the plan member.

Determine if the member needs income immediately: One of the first questions an IRM will ask a plan members is whether they need to convert their savings to retirement income immediately, or if they intend to continue accumulating their assets for a while. If income is not needed immediately, the IRM will review the member’s other options. These include remaining in the CEIRP, transferring to Canada Life’s NextStep program, or transferring to another financial institution. The IRM will describe the benefits of each option to the member. If members plan to convert their savings to income immediately, the IRM will follow the stages outlined below to determine the best approach.

Stage 2—Gathering the facts
Review retirement goals: The IRM will engage the plan member in a review of their goals, concerns and expectations in retirement, such as their:

• Target income in retirement
• Expected expenses, both fixed and variable
• Lifestyle expectations and activities (e.g. travel)

Review current retirement savings: During this step, the IRM will become familiar with the member’s accounts at Canada Life and determine factors that influence the member’s income options (e.g. plan type(s), provincial legislation, size of assets, locking-in, marital status, etc.). In addition, the IRM will ask the member for details of their total retirement savings, not just those in the group plan(s) at Canada Life. This will help to determine the best overall retirement income strategy for the member.

Review government benefits: The IRM will review the income that the member expects to receive from government benefits such as CPP and OAS. This is extremely important, as it impacts how much income the member will need from other sources, such as the group retirement savings program and other retirement savings.

Stage 3—Reviewing their options
Review income options and strategies: Once all the facts are gathered, the IRM will identify and describe the different income options and strategies available to the member, depending on the specific plan(s) they are currently invested in, marital status, age, assets, etc. The IRM will describe the income options available at Canada Life and highlight their pros and cons based on the member’s specific situation. The most common income options* we offer at Canada Life include:

• Annuities
• Registered Retirement Income Funds (RRIFs)
• Life Income Funds (LIFs)

Along with the above options, the IRM may also discuss different income strategies that may be available to the member, such as income splitting, unlocking and temporary income. If the plan member has additional retirement savings plans with other financial institutions, the IRM will explain the benefits to the member of consolidating their retirement savings, to reduce fees and simplify their retirement income strategy. *Annuities are offered through Canada Life. Depending on the jurisdiction’s legislation, we also offer LRIFs, PRIFs and RLIFs.

Discuss investment options and strategy: An important part of this process involves reviewing the member’s investments both before and after retiring. The IRM can review the member’s current plan (s) with Canada Life and suggest some ways to adjust the portfolio before converting to income, if needed. This strategy will depend on which type of income product the member chooses to transfer to in retirement (e.g. annuity vs RRIF/LIF). If the member is planning to transfer to a RRIF/LIF, the IRM will also offer some investment strategies for those plans.

Stage 4—Providing retirement illustrations
Provide retirement illustrations and education materials: Based on the discussions above and the member’s account details, the IRM will then arrange to have a retirement illustration package prepared and sent to the member. This package can include details such as income projections, the available investment options and applicable fees, relevant forms, and the IRM’s own contact information. This stage can involve several conversations or emails between the member and IRM to review the options. The IRM can also produce more illustrations based on different member details, if needed.

Help member complete documentation: Once the member has selected which income option(s) to convert to, the IRM will help the member complete the required documentation. Examples of forms that need completing include: annuity and/or RRIF/LIF application forms, spousal waiver forms and government forms. The IRM will review the completed documentation and will advise the member if any items are incomplete or outstanding. Once this is done, the IRM will provide the documentation to the Retirement Income Administration team to process the member’s documentation and set up his/her account.

Stage 5—Continuing service
Provide ongoing assistance after retirement: We encourage members to contact our Access Line client service centre for help with their day-to-day inquiries and changes once their income plan is set up. However, retired members are welcome to continue contacting their IRM to review their investment portfolio and retirement income payments, and to make adjustments as needed over time.

When it’s gorgeous outside, the last thing you want to think about is the holiday season when it gets dark at 4pm and everyone is stressed out while they rush around getting their last minute items for the festivities. But, there is a way to make the season less stressful if you start planning for it now.

Did you know that there are approximately 29 weeks until the holidays? So, you could set aside $20 a week for a total of $580! If you keep your present and food budget modest, you might find that you won’t have any holiday debt hangover in January!

If you automate this savings habit for the whole year, you could potentially save over $1000. This is a great way to turn holiday savings into an emergency savings habit without too much effort.

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