1) Government pension plans like the Canada Pension Plan (CPP) and Quebec Pension Plan (QPP) provide retirement benefits that individuals are entitled to if they have lived and contributed in Canada. Benefits can begin between ages 60-70, with reductions for early receipt and increases for delayed receipt. 2) Registered Retirement Savings Plans (RRSPs) allow individuals to shelter retirement savings from taxes. At retirement, RRSPs must be converted to a Registered Retirement Income Fund (RRIF) or other income-generating options like annuities or cash. 3) Retirement income options involve balancing tax implications, longevity risks, and income needs over a potentially long retirement. Professional

1. Government pension plans
Retirement:
Making sense of it all
Alternatively, these amounts can be
transferred to a locked-in plan such
If you’ve lived in Canada and contri-
as a Locked-in Retirement Account
buted to the Canada Pension Plan
(LIRA), a Life Income Fund (LIF) or,
(CPP) or the Quebec Pension Plan
in some provinces, into a locked-in
(QPP), you’ll be entitled to benefits.
Retirement Income Fund (LRIF) or
a “Prescribed RIF” (PRIF). You can choose to start receiving
benefits at any time between the ages
LIFs and LRIFs are similar to RRIFs
3 5 years to go and counting
of 60 and 70. When benefits start
ED MADRO B.A. Econ., CPCA in that you are required to withdraw
prior to age 65, there is a reduction
a minimum amount each year,
SPECIAL REPORT
Consultant
in the benefit. However, if you
edward.madro@investorsgroup.com however, the withdrawals are also
choose to delay receipt of your bene-
capped. In other words, pension
Many of the financial decisions
(403) 220-9654
fits beyond age 65, your benefit will
legislation establishes a “band” or
you make as you ease into
increase. Talk with us to determine
range of income. You then decide
which option best suits your needs.
retirement will have far reaching
what amount, within that range,
implications that may be felt,
you’ll withdraw to meet your needs.
quite literally, for the rest of
This is intended to ensure the LIF
or LRIF is not depleted prematurely. It’s clear the road to retirement,
your life. In this Special Report,
which once seemed so long, is
we’ll guide you through the maze
If your company pension plan
getting shorter. Your “destination”
allows, you may be able to transfer
of issues you should consider as
is now within sight and, as you’ve
your accumulated pension benefits
retirement approaches.
seen, you have many decisions to
into a LIRA before ultimately moving
make. Will you be ready? Talk with
them into a LIF/LRIF. Some jurisdic-
us today.
tions provide for a “one-time” transfer
of a percentage of locked-in assets to
an RRSP or RRIF. Be aware that you
may forfeit other retirement benefits
™ Trademark owned by IGM Financial Inc. and licensed to its subsidiary corporations. Written and published by Investors
if you choose to make such a transfer.
Group as a general source of information only. It is not intended as a solicitation to buy or sell specific investments,
Still, the ability to control how one’s
nor is it intended to provide tax, legal or investment advice. Readers should seek advice on their specific circumstances
from an Investors Group Consultant.
retirement savings are managed
Commissions, fees and expenses may be associated with mutual fund investments. Read the prospectus before
makes this option an attractive one
investing. Mutual funds are not guaranteed, values change frequently and past performance may not be repeated.
for many people.
Insurance products and services offered through I.G. Insurance Services Inc. (in Québec, a Financial Services Firm).
Insurance license sponsored by The Great-West Life Assurance Company (outside of Québec). Investors Group/
Great-West Life segregated fund policies are issued by The Great-West Life Assurance Company.
“Retirement: 5 years to go and counting” © Investors Group Inc. 2012 MP1234 (11/2012)
Investors Group Financial Services Inc.
1-866-424-6392
Investors Group Financial Services Inc.

2. Sources and choices
for retirement income
Tax-Free Savings Accounts
(TFSAs)
Retirement can come as
a profound shock to many
newly retired people. Clearly,
Retirement Savings Plans
a fulfilling retirement requires
not only financial preparation,
but also a clear vision of what
kind of life you’d like to lead
during retirement.
you can’t afford to lose sight of the This means contributing the allowable payments. Your Investors Group from your non-registered assets
fact that you may require an income maximum to your RRSP every year Consultant can help you to select before accessing capital from your
for 20 years or more. As a result, and allowing the contributions to the term that's right for you. tax-sheltered assets may be advisable.
Plan to stay active – Many people
you’ll need to protect yourself from grow uninterrupted for as long 4. Convert your RRSP to a The fact that RRIF withdrawals
believe retirees do most of their
Company pensions
the danger of outliving your savings. as possible. If you have unused Registered Retirement Income are fully taxed provides an added
major spending within the first few
and locked-in accounts
years of their retirement, arguing Your plan could include stocks contribution room available, you’ll Fund (RRIF): RRIFs are very much incentive to leave as much of your
this eliminates the need to prepare (equities) or equity mutual funds. want to be sure to take advantage like RRSPs, with two exceptions: registered assets sheltered as long as
financially for a lengthy – and expen- of it in these last few years leading you cannot contribute previously you possibly can. Further, depending
Generally speaking, these kinds of
sive – retirement. Don’t believe it. up to your retirement. If necessary, unregistered money to your RRIF; on how you invest outside of your
investments have consistently provided
consider an RRSP catch-up loan to and you are required to withdraw a RRSP or RRIF, non-registered assets
The fact of the matter is Canadians better returns than those available on
ensure that contribution room minimum amount each year. may receive preferential tax treatment,
are living longer, and staying active interest-bearing accounts over longer allowing you to keep more of what
is not wasted. The advantages of RRIFs – The
TIPS FOR PLANNING BEYOND RETIREMENT
longer, than ever before. Many periods of time. Your plan should you earn.
people who once anticipated being also guard against market volatility, Your retirement income options – minimum amount you’re required
able to enjoy travel and various especially a market decline early in You’ll have to convert your RRSP to to withdraw from your RRIF each
leisure activities only in their early something that produces an income year is a percentage of the value of
retirement that could significantly
retirement years are now finding by December 31st of the year in which the RRIF. It can be based on either
reduce your retirement income.
they’re able to continue that level you turn 71. When you choose to your age or that of your spouse and A TFSA can be used as another
of activity well into their 80s. Essentially, your portfolio needs to convert your RRSP, you’ll have four the percentage increases each year. source of retirement funds as it is
3 Make your maximum RRSP contribution for 3 To minimize the amount of RRIF income
include a mix of investments that help basic options: If you have a younger spouse, you designed to help Canadians save for
as long as you can. You can contribute to you’ll be required to expose to tax, base
At the same time, inflation, even with protect against market downturns may find it advantageous to base important goals and reduce their
your RRSP until the end of the year in which your RRIF withdrawals on the age of the
annual increases in the two to three 1. Cash in your plan: This is the least your withdrawals on your spouse’s
you turn 71 – whether you’re working or not younger spouse.
while also delivering a cash flow that overall tax bill.
per cent range, can whittle away your advisable route, as you’ll likely pay
– if you have contribution room available.
will sustain your retirement lifestyle. age, as the required minimum
3 To get the most tax-deferred growth from
savings’ purchasing power if you’re tax on the entire sum at the highest You put money in, you get the money
withdrawal will be smaller, thereby
3 Since RRSP contribution room is based on your RRIF, withdraw only the minimum
not careful. Be aware that the cost of marginal tax rate. and growth back out tax-free; you can
previous year’s earned income, you will have amount required and choose December 31
allowing you to shelter more of
withdraw funds at any time and for
RRSP contribution room the year after you of each year as the date you’ll receive your
commodities and services that affect 2. Buy a life annuity: A life annuity your wealth from tax.
retire. Be sure to make an RRSP contribu- annual income. You’re not required to
retirees the most–such as prescrip- You’re already familiar with the any purpose without incurring tax.
will pay you a specified income,
tion the year after you retire. If you intend to receive any RRIF income until December 31
tions and health care–often rise more You can withdraw any amount
work beyond age 71, you can still contribute of the year following the year that your RRIF
benefits of Registered Retirement usually monthly, for the rest of There are also no age restrictions
beyond the minimum each year,
to a spousal RRSP if your spouse is younger was established.
dramatically than the conventional Savings Plans (RRSPs). In general, your life. on withdrawals and your eligibility
including lump sums should a
than you. If this is not possible, consider
“family” living costs used to measure it’s usually a good idea to shelter for federal income-tested benefits,
making an over-contribution to your RRSP in
broad movements in consumer prices. 3. Buy a term-certain annuity : This special need arise.
such as Old Age Security (OAS), the
December of the year in which you turn 71.
as much of your savings from tax type of annuity guarantees payments
Building a portfolio for your as possible. You can hold virtually all the same Guaranteed Income Supplement
for the duration of the term selected. investments in your RRIF as you
retirement – While your retirement (GIS) and the Age credit, will not
The longer the term, the smaller the currently hold in your RRSP.
may now be less than five years away, be affected.
You can split your RRIF income, for
tax purposes, with your spouse if you value of the member’s flex account
are at least 65 years of age. Talk to can be used to purchase one or more
us before considering this option. Defined Benefit (DB) plans – ancillary benefits, such as some form
With all this flexibility, it’s no As the name suggests, DB plans of cost of living increase, a bridging
surprise most people choose RRIFs. “define” the pension benefit payable feature – which provides a higher
upon retirement based on a formula income prior to receipt of CPP/QPP
Non-registered investments – that reflects your earnings and years and OAS benefits – or an unreduced
You may choose to supplement of service. pension for early retirement.
the income you receive from your
registered investments with income Flexible benefit (flex) plans – Some Defined Contribution (DC) plans –
from your non-tax sheltered savings DB pension plans contain a flexible With a DC plan, the member’s
and investments. In fact, because of benefit (or “flex”) feature. These give contributions, together with their
the powerful effect of tax-deferred, members the option of making employer’s contributions and the
compounding growth on your additional voluntary contributions plan’s investment earnings, are used
registered assets, drawing income to the plan. Upon retirement, the to purchase a life annuity contract.