Having a goal without a plan is like embarking on a journey

without a map. Creating a financial roadmap is the first

step to ensuring you are on the right path in reaching your

financial goals. And, at different life stages, your roadmap

will need to evolve to meet your changing needs.

CREATING YOUR FINANCIAL ROADMAP

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WHY BUILD A FINANCIAL ROADMAP?At different life stages your financial plan will need to emphasize different aspects of your financial focus. For example:

Life stage Financial focus

Early career • paying off debt (such as student loans)• purchasing a home• first child

Mid-career • raising children• paying off debt (such as paying off your mortgage)• increasing savings

Late career • caring for elderly parents• retirement planning• estate planning

FINANCIAL PLANNING PERIODS

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HOW TO CREATE YOUR FINANCIAL ROADMAPWhen you think of your financial plan, think of it as a pyramid: a strong base, with many layers built upon the base. Before you can build the top part of your pyramid, you need to address the base.

THE FINANCIAL PYRAMID

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Step 1: Building a strong base

A strong base is important for your plan to be sustainable, just like a good route is necessary to map out a road trip.

To build a strong base, it’s important to start with a current will. A will helps ensure your personal wishes are followed, and that any assets or personal possessions are distributed according to your wishes.

Having a will:

• Cuts down on potential costs associated with your estate (for example, during probate)

• Places people in charge of your assets, with clarity on how to distribute them upon your death

• Can be simple or complex depending on the nature of your assets and the terms in which you choose to distribute them

When you have a will, you maintain control over who will receive your property and assets, your personal effects and family heirlooms. You also choose who will serve as executor (also known as an estate trustee) to carry out your wishes. If you have children, a will outlines your personal wishes for a guardian – and though a will is not legally binding, the courts will consider your wishes in light of the best interests of the child.

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Step 2: Addressing non-controllable events

There are often unforeseen bumps along the way, both in life and financial planning. By taking proactive steps for your future, you can help mitigate the impact of some of these bumps.

Conducting a financial needs analysis will help identify your sources of income and potential gaps that you may face in the event of an unforeseen tragedy.

This analysis should include your assets and sources of income versus expenses, such as final expenses like paying off your mortgage, car loan, credit cards and other debts; replacing your income; and/or funding children’s future education.

Be sure to also incorporate protection against disability, critical illness, long-term care and personal health. If you suffer a critical illness, for example, you may need to use a significant amount of savings to get through this stage in life. Taking precautions, through planning for non-controllable events, will help ensure that your savings aren’t derailed by a personal or health crisis.

Once you have a financial plan in place, it’s just as important to consider that your needs and priorities will change over time. Be sure to revisit your plan regularly.

WHEN DETERMINING YOUR NEEDS, CONSIDER:

■ expenses that will need to be covered

■ sources of income

■ amount of insurance required

■ types of life insurance available: permanent, term and universal life

DID YOU KNOW…

• Life insurance ensures your family will be taken care of in case of tragedy.

• Eighteen of every 100 25-year-olds will die before age 65.

• Most households depend on two incomes and carry debt.

• Sources of income on death include:

– Canada Pension Plan (CPP)/Quebec Pension Plan (QPP)

– Survivor benefit – A company benefit plan – Personal life insurance

Working years

Long-term care insurance

Critical illness insurance

Disability insurance

Personal health insurance

Retirement years

25 30 40 55 65 75 85 95

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Step 3: Addressing controllable priorities

While life will always have its ups and downs, there are things you can do to help anticipate and plan for those priorities and pit stops along the way.

Some ways to meet your savings goals may include:

• Develop a monthly budget to determine where your money is going now.

• Use credit cards with caution: pay down more than the monthly minimums and consolidate with other loans for lower rates.

• Pay down your mortgage principal each year, increase your monthly mortgage payment frequency, or choose a shorter amortization period.

• Set up an emergency fund – the general guideline is six months’ salary.

• Know your savings options, which may include tax-deferred, tax efficient and non-registered savings.

Your savings may include:

Tax-deferred plans Registered Retirement Savings Plans (RRSP)Deferred Profit Sharing Plans (DPSP)Defined Contribution Pension Plans (DCPP)

Tax efficient plans Tax-Free Savings Accounts (TFSA)Registered Education Savings Plans (RESP)

Other savings Non-registered savings

Your employer-sponsored retirement program, which may include tax-deferred accounts, such as RRSPs, DPSPs, or DCPPs, is a great way to achieve your long-term retirement goals. The key benefit of these options is the advantage of tax deferral. Tax-deferred accounts allow your money to grow tax-free until you begin to make withdrawals – which means significant savings to you over the long term.

DID YOU KNOW…

The average Canadian consumer’s total non-mortgage debt continues to rise. Take credit cards out of your wallet and only use them in time of need to help reduce your debt.

Assumptions:

• $2,000 yearly contribution

• 5% return on investment

• 40% marginal tax rate

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In addition to tax-deferred plans, other tax efficient plans include a Tax-Free Savings Account (TFSA) and Registered Education Savings Plan (RESP).

Tax-Free Savings Account:

The TFSA works almost opposite to the RRSP. You don’t get tax breaks for contributing, but you can make withdrawals without being taxed at all. This is a great option for short-term savings or tax-free income in retirement. Another feature of the TFSA is that any withdrawals you make can be re-contributed in later years without affecting that year’s contribution limit.

The annual contribution limit is set each year by the Canada Revenue Agency, and if you don’t contribute to the maximum allowed each year, you can carry forward the unused amount indefinitely. Check your personal limit by visiting the Canada Revenue Agency (CRA) website at www.cra-arc.gc.ca.

Registered Education Savings Plans:

An RESP is an education savings account that is registered with the Government of Canada.

There are two types of RESPs available to help you save for your children’s education: individual and family.

Depending on your province, you may have access to additional government incentives and financial support for your child’s education that you may be eligible for, such as the Canada Education Savings Grant (CESG). To learn more about additional government incentives, visit www.canlearn.ca.

Creating a financial plan that considers your eligibility and factors in these programs will ensure that you don’t miss out.

Assumptions:

• $200 monthly contribution

• 5% ROR

• 20 year investment

• Based on an annual income between $40,000 and $79,999*

Tax savings $9,421

Source: Government of Canada: www.tfsa.gc.ca/cal-eng.html

* Your annual income is used as a basis for estimating the federal income tax rate applicable to the investment income accruing in the taxable account. Your actual tax rate may be different depending on the amount and type of deductions you claim. The provincial income tax rate applicable to investment income accruing in the taxable account is equal to half of the federal income tax rate.

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What are other sources of retirement income?

Other savings

In addition to tax-deferred and tax efficient plans, you may also have other non-registered savings. Although no tax benefits exist, non-registered savings are an important piece of your overall savings plan. Be sure to factor these savings into your financial roadmap.

Remember: your controllable priorities will change over time

Your plan should include annually reviewing your priorities and making adjustments, during your working years and throughout your retirement.

Working years

RRSPs, DPSPs, DCPPs

TFSAs

RESPs

Non-registered

Retirement years

25 30 40 55 65 75 85 95

Convert to alternative income optionsÚ

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Step 4: Pursuing growth opportunities

Once you have established a strong base and charted your financial roadmap, you can consider other growth opportunities such as real estate, collectibles, or investing in the stock market.

Also consider the unique position of life insurance in Canadian tax laws. Using life insurance can be a good way to accumulate retirement savings and financial growth. Some of these tax benefits include:

• Cash value accumulates on a tax-deferred basis

• At death, the death benefit is paid out to the beneficiary tax-free

Common mistakes

Not having a plan in place is similar to driving a long distance without a map. Without a clear direction, you can fall into some common – but avoidable – mistakes.

Common mistakes people make

• not taking an active role in their financial planning investments

• accepting advice without questioning its wisdom

• not knowing where their money is going (not tracking expenses)

• not knowing what they want their money to do

• procrastinating

• failing to keep financial records

These types of mistakes can lead to:

• inefficient use of resources

• not meeting financial objectives

• unprepared for catastrophes

• higher taxes than necessary

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HAVING A ROADMAP AND REVIEWING IT FREQUENTLY WILL HELP YOU NAVIGATE YOUR PATH TO FINANCIAL SUCCESSConsidering your priorities is the foundation of your roadmap, but monitoring and updating your roadmap is just as important so that if you get off track, you can quickly redirect yourself before you get lost.

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RESOURCESAs you move through different life stages, you’ll have more specific questions and you may need some additional support.

Here are some resources and tools to get you started.

You may wish to contact… How to get in touch… Find out about…

Government of Canada cra-arc.gc.ca Your total personal limit for Registered Retirement Savings Plans (RRSPs) and Tax-Free Savings Accounts (TFSAs)

canlearn.ca A helpful government website and an RESP source of interactive information and tools designed to help you save, plan and pay for post-secondary education.

hc-sc.gc.ca Canadian health-related news, including Canada’s FoodGuide.

Sun Life Financial sunlife.ca/advisormatch To connect with a Sun Life Financial advisor.

mysunlife.caYou will need your access IDand password

Online retirement planning tools• Retirement planner• Investment risk profiler• Pre-retirement calculators• Videosto help you determine if you’re on track,make decisions, and understand your income needs, government benefits and retirement income products.

sunlife.caNo access ID or password is needed

Comprehensive Insurance, Investments and Learn & Plan sections. Take advantage and subscribe to our Money for Life newsletter with FREE tips on money and health.

1-866-224-3906Any business day from 8 a.m. to 6 p.m. ET. Select option 1.

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QUESTIONS?If you would like to speak with a Sun Life Financial Retirement Consultant* to ensure that you are taking full advantage of the benefits of your company’s program, or if you have

any questions about your retirement income options, please contact 1-866-224-3906 (option 1) any business day from 8 a.m. to 6 p.m. ET.

*Registered as Financial Security Advisors in the province of Quebec.

The information provided is of a general nature and should not be construed as personal financial or legal advice. Neither the advisor, Sun Life Financial or its affiliates guarantees the accuracy or completeness of any such information. The information should not be acted on without obtaining counsel from your professional advisors applicable to your particular set of facts.

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