Retirement Plan Information Session
Today’s meeting • Why plan for retirement? • Your Plan • Your investment options • GWL Services and support
Why plan? “Someone is sitting in the shade today because someone planted a tree” – Warren Buffet
Why plan? • Your hopes and dreams?
Sample lifestyles - Conservative Item Single Couple Food $3,321 $5,084 Housing $5,744 $6,291 Household operation $2,790 $3,349 Clothing $ 832 $1,252 Recreation / leisure $ 633 $1,489 Travel $ 650 $1,000 Transportation $3,157 $4,982 Health & personal care $1,650 $2,400 Gifts and donation $1,255 $2,418 Tobacco and alcohol $ 514 $ 685 Savings $ 199 $ 851 Interest paid and miscellaneous $ 335 $ 277 Estimated personal income taxes $3,720 $5,729 Total Annual Ret. Income $24,800 $35,807
Sample lifestyles – Above Average Item Single Couple Food $ 4,982 $ 7,893 Housing $ 9,334 $10,616 Household operation $ 4,534 $ 5,861 Clothing $ 1,631 $ 2,848 Recreation / leisure $ 1,662 $ 4,579 Travel $ 2,730 $ 5,440 Transportation $ 6,630 $11,770 Health & personal care $ 3,094 $ 3,750 Gifts and donation $ 2,610 $ 4,570 Tobacco and alcohol $ 907 $ 1,541 Savings $ 1,679 $ 4,361 Interest paid and miscellaneous $ 804 $ 738 Estimated personal income taxes $18,239 $31,506 Total Annual Ret. Income $58,836 $95,473
Why plan?
Government Benefits Canada Pension * = $10,905/yr** MAX – Available as early as age 60 if you are retired – Reduced if you start to collect before 65 – Taxable Old Age Security * = $6,204/yr MAX – Available at age 65 – Must meet residency requirements – Taxable * 2009 benefits **Payout varies depending on years of service, salary, amount of contributions, etc.
Government Benefits Government benefits - Average • Old Age Security = $ 5,874 /yr AVG* • CPP/QPP** = $ 6,018 /yr AVG at age 65* = $ 4,212 /yr AVG at age 60* For more information visit the Service Canada web site at www.servicecanada.gc.ca *March 2009 stats from www.servicecanada.gc.ca
Your Plan
Your Plan Defined Contribution Pension Plan • The contributions made to the plan by you and your employer are defined • Your benefit in retirement will depend on the contributions made to the plan and the investment returns earned by those contributions
Your Plan ELIGIBILITY Full-time employees • after 1 year of continuous employment Part-time employees • after 2 years of continuous employment with earnings at least 35% of YMPE and 700 hours worked in each of the 2 years prior to joining
Your Plan CONTRIBUTIONS Employee required (i) 7.5% of gross monthly earnings, or (ii) 5% of gross monthly earnings Employee voluntary contributions are allowed but not matched by the employer Employer • 100% match of employee required contributions
Your Plan IN-SERVICE WITHDRAWALS • not allowed VESTING • 2 years of continuous plan membership • Locked-in after one year of continuous plan membership INVESTMENT OPTIONS • You decide for your contributions • Employer contributions are invested in a five-year GIC • default investment option is the Continuum Balanced Fund
CRA Limits and Pension Adjustments • RRSP contribution limit is 18% of earned income to a maximum of $21,000 (2009) and $22,000 (2010) • Notice of Assessment includes your RRSP limit and any carry forward room • Pension contributions affect your limit • T4 discloses the total as a Pension Adjustment
Your Plan Benefits of your group plan • Employer contribution • Preferred investment fees • Easy payroll deductions • No front end or back end loads
Your investment options
Risk vs. return
What kind of investor are you? Investment personality questionnaire • How do you make choices within your plan? • Sixteen questions can help you • Determine your own risk profile
What kind of investor are you? You’ve determined your investment personality….. now what “approach” will you take? Hands On? Hands Off?
Continuum – the hands-off approach Asset Allocation Funds Balanced * Conservative Moderate Advanced Aggressive Equity: 25% Equity: 40% Equity: 60% Equity: 80% Equity: 100% Fixed income: 75% Fixed income: 60% Fixed Income: 40% Fixed income: 20% * Default fund
The hands-on approach Investment personality questionnaire Conservative investor Moderate investor Balanced investor Advanced investor Aggressive investor Fixed income Foreign equity Canadian equity Balanced Special equity Note: If your plan sponsor has not selected any funds in the Special equity class, it’s suggested that you fulfill the recommended percentage with funds from another asset class.
The hands - on approach 10 Professional Investment Managers 20 Market Based Funds to pick from plus 1 and 5 year GIAs
The hands-on approach • Fund Details • Portfolio by Sector • Major Holdings • Fund Composition • Fund Performance
GWL Services and support
Services and support • Check out your enrolment kit
Services and support Smart tools CD • Library of articles • Flexible retirement calculators • Glossary of terms
GRS Access • Account balances • Provide or change investment instructions • Process inter-fund transfers • Retirement planning tool • On-demand statements www.grsaccess.com
Client Service Centre 1-800-724-3402 • Provide or change investment instructions • Process inter-fund transfers • Get assistance with your application • Update information • 8:00 am to 8:00 pm (ET)
Statements • Mailed quarterly • Personalized net rates of return • Custom messages • Also available on GRS Access
Questions
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