2 explore the various sources of retirement income income before retirement (ibr) income at...

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Page 1: 2 Explore the Various Sources of Retirement Income Income before retirement (IBR) Income at retirement (70% of IBR)
Page 2: 2 Explore the Various Sources of Retirement Income Income before retirement (IBR) Income at retirement (70% of IBR)

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Personal savings / Group plan

QPP/CPP

OAS

Explore the Various Sources of Explore the Various Sources of Retirement IncomeRetirement Income

Income before retirement (IBR)

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Page 3: 2 Explore the Various Sources of Retirement Income Income before retirement (IBR) Income at retirement (70% of IBR)

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Income before retirement: $ 20,000 $ 40,000 $ 60,000 $ 80,000 $ 100,000

Income needed at retirement (70%): $ 14,000 $ 28,000 $ 42,000 $ 56,000 $ 70,000

Sources of income at retirement:

OAS $ 6,204 $ 6,204 $ 6,204 $ 6,204 $ 5,654

QPP/CPP $ 5,000 $ 10,000 $ 11,208 $ 11,208 $ 11,208

Personal savings $ 2,796 $ 11,796 $ 24,588 $ 38,588 $ 53,138

$ 14,000 $ 28,000 $ 42,000 $ 56,000 $ 70,000

In percentage:

OAS 44% 22% 15% 11% 8%

QPP/CPP 36% 36% 26% 20% 16%

Personal savings 20% 42% 59% 69% 76%

100% 100% 100% 100% 100%

Explore the Various Sources of Explore the Various Sources of Retirement IncomeRetirement Income

* Applicable rates as at January 2010

Page 4: 2 Explore the Various Sources of Retirement Income Income before retirement (IBR) Income at retirement (70% of IBR)

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Plan HighlightsPlan Highlights

Type of plan:Type of plan: Group RRSP

Plan objective:Plan objective: Accumulation for retirement

Eligibility to plan:Eligibility to plan: Immediate

Spouse eligibility :Spouse eligibility : Permitted

Participation:Participation: Optional

* Please refer to the "Plan highlights" document included in your enrolment kit

Page 5: 2 Explore the Various Sources of Retirement Income Income before retirement (IBR) Income at retirement (70% of IBR)

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Contributions :Contributions :

0 – 5 years of service: Voluntary: your choice

+ 5 years of service:

Employee: 3.5% of salary

Employer: 3.5% of salary

Voluntary: your choice

Transfers from other plans: Transfers from other plans: Permitted

Plan HighlightsPlan Highlights

Page 6: 2 Explore the Various Sources of Retirement Income Income before retirement (IBR) Income at retirement (70% of IBR)

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Benefits upon retirement:Benefits upon retirement: Annuity, RRIF

Benefits upon termination:Benefits upon termination: RRSP, cash

Benefits upon death:Benefits upon death:Payable to beneficiary. Can be rolled over to the surviving spouse's RRSP

Withdrawals while employed: Withdrawals while employed:

Employee and voluntary contributions: permitted

Employer contributions: not permitted (except for the HBP or the LLP)

Plan HighlightsPlan Highlights

Page 7: 2 Explore the Various Sources of Retirement Income Income before retirement (IBR) Income at retirement (70% of IBR)

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Advantages of Your Pension PlanAdvantages of Your Pension Plan

Employer contribution Immediate tax break Very competitive management fees Simple and effective investment solutions Easy member access for information and

assistance

Page 8: 2 Explore the Various Sources of Retirement Income Income before retirement (IBR) Income at retirement (70% of IBR)

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Immediate tax savings!Immediate tax savings!A contribution of $50 a weekreally only costs you: $35really only costs you: $35

Without a Without a ContributionContribution

Gross weekly salary $400 $400

Contribution $50 $0

Taxable balance $350 $400

Tax (marginal rate of 30%) $105 $120

Net Salary $245 $280

Difference of net salary after deduction of a $50 contribution: $35$35

Advantages of Your Pension PlanAdvantages of Your Pension Plan

Immediate tax savings!Immediate tax savings!

Page 9: 2 Explore the Various Sources of Retirement Income Income before retirement (IBR) Income at retirement (70% of IBR)

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Time is on Your Side!Time is on Your Side!

0

20 000

40 000

60 000

80 000

100 000

120 000

140 000

160 000

180 000

200 000

25 35 45 55 65

Estimated annual return of 6.5%

126% more in savings !

Investment of $20 x 52 weeks x 40 years

Investment of $40 x 52 weeks x 20 years

Acc

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val

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Age (accumulation period)

Page 10: 2 Explore the Various Sources of Retirement Income Income before retirement (IBR) Income at retirement (70% of IBR)

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Setting Your Retirement NeedsSetting Your Retirement Needs

The "Setting Sail for the The "Setting Sail for the Future" softwareFuture" software

CompassCompass

A detailed assessment of A detailed assessment of your retirement savings your retirement savings needsneeds

Page 11: 2 Explore the Various Sources of Retirement Income Income before retirement (IBR) Income at retirement (70% of IBR)

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You are now readyYou are now readyto reviewto reviewthe third Port of callthe third Port of call