Find solutions with unique benefits to meet your retirement challenges
There are three important considerations to keep in mind when you’re building a retirement income strategy:
Annuities
Systematic Withdrawal Plans
Guaranteed Lifetime Income Benefits
To determine what's right for you, you’ll need to look at how each of the following could impact or influence how you want to invest.
Retirement risks:
Inflation – The rising cost of goods and services could erode your savings
Sequence of market returns – Poor market returns in the first few years of retirement could deplete your savings faster
Longevity – Will you outlive your savings?
Retirement preferences:
Liquidity – You may need access to your savings for unexpected expenses or emergencies
Behavioural risk – Market volatility may cause you to make rash decisions that can undermine your financial plan
Estate aspirations – The size of the inheritance you want to leave will impact the amount of money you can spend in retirement
Annuities, Systematic Withdrawal Plans and Guaranteed Lifetime Income Benefits offer unique features and benefits to meet each challenge so you can design a plan that works for you.
Annuities and other sources of guaranteed lifetime income, such as Defined Benefit Pension Plans, the Canada Pension Plan (CPP), and Old Age Security (OAS):
Guaranteed income, typically for life
Pre-determined regular income
Market volatility protection
Interest rate fluctuation protection
Not liquid
No control over how assets are invested
Retirement Risks Retirement Preferences
Inflation Sequence Longevity Liquidity Behaviour Estate
LOW MED HIGH LOW HIGH LOW
Systematic Withdrawal Plans (SWPs) linked to portfolios of mutual funds, stocks, bonds, GICs, cash, etc.
Control over how assets are invested
Flexible monthly income
Growth potential to help keep up with inflation
Income not guaranteed
Retirement Risks Retirement Preferences
Inflation Sequence Longevity Liquidity Behaviour Estate
HIGH LOW LOW HIGH LOW HIGH
Guaranteed Lifetime Income Benefits, including Guaranteed Minimum Withdrawal) Benefits (GMWBs)
Guaranteed income possibly for life
Growth potential to help income keep up with inflation
Control over how assets are invested
Predictable, sustainable and potentially increasing income
Incur additional fee for guarantee
No control over how assets are invested
Retirement Risks Retirement Preferences
Inflation Sequence Longevity Liquidity Behaviour Estate
MED HIGH MED MED MED MED
Based on your specific needs and preferences, a financial advisor can help you determine how much of your money you should invest in each of these categories, taking into account the costs and the benefits of these products and how they interact with each other.
Doreen Yeow Tel: (778) 895-8010 E: yeowlfd@shaw.ca
(Courtesy of Equitable Life of Canada)
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