Retirement

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Prioritize Income Objectives

Review your personal objectives and considerations

  • Age at retirement:
    • Younger retirees must plan for more years in retirement and purchasing power erosion due to inflation.
    • Choosing to defer retirement to age 65–70 will increase income from government pensions, benefiting those who haven't been able to save for retirement.
  • Risk tolerance:
    • Difficult trade-offs may be required to achieve income objectives if risk tolerance is low, given current low interest rates.
  • Probability of survival:
    • A subjective assessment, of how long you and your spouse/partner will need money for, impacts how large your savings must be.
    • An impact on pricing when buying annuities and other age-related financial products.
  • Desire to leave money to family versus your need for income:
    • Trade-off between assets and income.
      • Assets sold to generate life-long income are not available to leave to your children.
    • The importance you place on leaving an estate.
  • Desire to manage uncertainty (risk) and eliminate it:
    • Trade-off between keeping and managing investments (such as in an RRIF) versus selling them to purchase an annuity (income for life).
  • Risk-return characteristics of assets:
    • Establish a preferred asset mix and method of investing.
  • Point of time and timing:
    • Identify when specific investments will be bought or sold and trigger events.

Your Retirement Income Objectives

Identify and then prioritize features that will most satisfy your income objectives or your desire to reduce identified risks.

Prioritize Retirement Income Objectives

Complete the exercise to prioritize your income objectives by ordering the features from most to least important. Click the button below to begin.

Begin

Choose Sources of Retirement Income

Compare and contrast the following sources of retirement income by the features you prioritized and the types of income you are receiving. On your own, or working with a financial professional, adjust your current income streams if your income objectives are not being met.

 

Government Pensions: CPP/QPP and OAS

Employer Defined Benefit Pensions

Investment Portfolio, Including Defined Contribution Pensions, RRSPs etc.

Life Annuities

Term-Certain Annuities

Variable Annuities: Life and/or Term-Certain

Longevity Protection

Y

Y

Depends on asset mix/withdrawal rate

Life annuity only

N

If option selected

Control and Upside Potential

N

N

Depends on asset mix

N

N

Y

Downside Protection

Y

Y

Depends on asset mix

Y

Y

N

Inflation Protection

Y

Depends on plan

Depends on asset mix

Life annuities, if COLA option added

N, unless COLA option added

Depends on performance of underlying investments

Survivor Protection: Spouse/Partner

CPP/QPP: limited; OAS: none

Depends on plan; government legislation requires 60%

Assets are fully transferable, either tax-sheltered or after tax

Only if option is selected; government legislation requires 60%; if money originated in a pension plan

Commuted value of remaining payments

Only if purchased

 

Estate Payout

CPP/QPP: death benefit; OAS: none

Depends if a guarantee period was provided and still in place

Assets are fully transferrable, either tax-sheltered or after tax

Depends if a purchased guarantee period has not lapsed

Commuted value of remaining payments

Depends: commuted value of remaining payments or guarantee period

Income Certainty

Y

Y

Depends on asset mix/withdrawal rate

Y, for life

Y, for term

N

Money Management Flexibility

N

N

Y

N

N

Limited

Sponsor/Asset Solvency Protection

Y

Y, managed and monitored by government regulations and reporting requirements

Depends on investments chosen

Y, up to a limit

Y, up to a limit

Y, up to a limit

Cost/Price: Fixed and Transparent

Y

Y

Depends on investments chosen

N

N

N

More...

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