Transcript Plan for life™ - Standard Life

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Plan for life
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Plan for life
Enrolling in your group program
Company name
Broker/Advisor and Logo
Date
Broker/advisor name
Plan for life
• xxxxxxxxxxxxxxxxxxx
• Xxxxxxxxxxxxxxxxxxx
• xxxxxxxxxxxxxxxxxxx
• xxxxxxxxxxxxxxxxxxx
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Key topics
Plan for life
• Enrolling today
• Contributions
• Investments
• Guidance
• Questions and answers
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How do you feel about your retirement?
Plan for life
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Did you know?
Plan for life
70% of employees
approaching
retirement are
concerned with
having enough
income to cover
essential expenses
(home, food and other
basic needs)
throughout their
retirement
Source: Crunch Research Insights & Advice
conducted for The Standard Life Assurance
Company of Canada, Retirement transition
needs, August 2012
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A dollar a day
Plan for life
$20,000
20000
$17,701
18000
16000
$15,000
14000
12000
$10,000
10000
$8,810
8000
6000
$5,000
4000
$3,351
2000
$0
0
10 years
20 years
30 years
*The calculations are based on 5% rate.
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How much do I need?
Plan for life
Experts suggest you will need to replace 70% of your salary.
Keep in mind, your income will come from three sources:
• Government programs (Old Age Security, Canada or
Quebec pension Plan)
• Your group savings and retirement program
• Your personal savings (real estate, other savings
plans or income)
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Advantages of payroll deductions
Plan for life
In the example below, saving $50 really only costs you
$30 on your take home pay. And you pay less in tax.
5% = $50
$50
$380
in taxes
$570
to spend
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How much am I allowed to contribute?
Plan for life
Limit set by Canada Revenue Agency (CRA)
• 18% of your current year’s earned income* or the dollar
maximum stipulated for the current year**
-
• Your Pension Adjustment (PA)
+
• Unused contribution room
Note: It is your responsibility to monitor your limits
Check your Notice of Assessment
* For RRSP, it’s the previous year’s earned income
** The yearly limit can be found via the following website: www.cra-arc.gc.ca
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Start now, save more. Regular contributions.
Plan for life
$100/month over 40 years
$148,856
$200/month over 20
$81,492
years
Same amount of money ($48,000), same investment return (5%),
longer period of time… the savings almost double!
You simply earn more by putting aside smaller amounts of money
over a longer period of time.
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Pay yourself first.
Plan for life
Nancy
Marc
$150
$400
$510
$600
$340
Take home pay
Tax payable
Take home pay
Tax payable
Savings program
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Your group program
Plan for life
Group retirement plan
Registered Retirement
Savings plan (RRSP)
Employee
contributions
Employer
contributions
Review the document in your enrolment kit that states the main provisions of your program for more
plan details and other important information.
.
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Your retirement program
Plan for life
Group retirement plan
Registered Retirement
Savings plan (RRSP)
Employee
voluntary
contributions
Review the document in your enrolment kit that states the main provisions of
your program for more plan details and other important information.
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Your retirement program
Plan for life
Group retirement plan
Deferred Profit Sharing Plan
(DPSP)
Employer
Contributions
No employee
Contributions
allowed
Review the document in your enrolment kit that states the main provisions of
your program for more plan details and other important information.
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Your retirement program
Plan for life
Group retirement plan
Defined contributions
registered pension plan (DC – RPP)
Employer
contributions
Employee
Contributions
(if applicable)
Review the document in your enrolment kit that states the main provisions of
your program for more plan details and other important information.
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Your retirement program
Plan for life
Group retirement plan
Simplified Pension Plan
(SPP)
Employer
contributions
Employee
Contributions
(if applicable)
Review the document in your enrolment kit that states the main provisions of
your program for more plan details and other important information.
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Your retirement program
Plan for life
Group retirement plan
Deferred Profit Sharing Plan
(DPSP)
Registered Retirement Savings
Plan (RRSP)
Employer contributions
Employee contributions
Review the document in your enrolment kit that states the main provisions of
your program for more plan details and other important information.
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Your retirement program
Plan for life
Group retirement plan
Defined contributions
registered pension plan (DC – RPP)
Employer
Contributions
Employee
Contributions
(if applicable)
Registered Retirement
Savings Plan (RRSP)
Employee
Contributions
Review the document in your enrolment kit that states the main provisions of
your program for more plan details and other important information.
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Your retirement program
Plan for life
Group retirement plan
Simplified Pension Plan
(SPP)
Employer
Contributions
Employee
Contributions
(if applicable)
Registered Retirement
Savings Plan (RRSP)
Employee
Contributions
Review the document in your enrolment kit that states the main provisions of
your program for more plan details and other important information.
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What is a DPSP?
Plan for life
• A simple, flexible arrangement whereby your employer
pays contributions, which amounts are based on the
company’s profits.
• You are not allowed to contribute to the plan.
• Group buying power – favourable interest rates and
lower investment management fees.
• Tax deferred compensation.
• Flexibility at termination and retirement – vesting to
occur no later than 24 months after participation began.
No locking-in rules.
Termination or retirement (DPSP)
Plan for life
• At termination or retirement assets can be:
–transferred to a RRSP
–cashed out (minus the applicable taxes)
–transferred to another DPSP or a Pension Plan (if
permitted)
–converted into an annuity, or a RRIF
What is a DC-RPP?
Plan for life
• Contributions made by the employer, and in certain cases, the
employee as well
• You are responsible for making the investment decisions within
the plan
• Account value used to provide retirement income
• Amount of income you can expect is directly related to the amount of
assets in your account at the time of retirement.
What is a DC-RPP?
Plan for life
• Contributions made in accordance to a pre-defined formula specified
in the plan rules
• Employee contributions are deducted from pay before income tax
• Employer contributions don’t constitute a taxable benefit for you until
benefit payment
• Employer and employee contributions are generally locked-in,
meaning that the assets can only be used to provided for a retirement
income. Under certain conditions, the assets can be non locked-in.
• Vesting rules may apply
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Termination or retirement (DC-RPP)
Plan for life
• No withdrawals allowed during employment.
• At termination or retirement, vested contributions can be:
– transferred to another Pension Plan (if that plan permits)
– for locked-in assets:
- transferred to a locked-in RRSP or LIRA
- used to generate a retirement income through a LIF*
– for non locked-in assets:
- transferred to a RRSP
- cashed out (minus applicable taxes)
- used to generate a retirement income through a RRIF
– converted into an annuity
*or other similar prescribed plans
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What is a SPP?
Plan for life
• Participation is voluntary or compulsory, as per plan rules
• Contributions made by the employer, and in certain cases, the
employee as well
• Contributions made in accordance with a pre-defined formula
specified in the plan rules
• Employee contributions are deducted from pay before income tax
• Employer contributions don’t constitute a taxable benefit for you until
benefit payment
• Employer contributions are locked-in
• In Manitoba, employee contributions are locked-in. In Quebec, they
are generally not locked-in unless specified in the plan rules.
• Immediate vesting
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Termination or retirement (SPP)
Plan for life
• At termination or retirement assets can be:
– transferred to another Pension Plan (if that plan permits)
– for locked-in assets:
- transferred to LIRA
- used to generate a retirement income through a LIF*
– for non locked-in assets:
- transferred to a RRSP
- cashed out (minus applicable taxes)
- used to generate a retirement income through a RRIF
– converted into an annuity
* or other similar prescribed plans
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What is a Group RRSP?
Plan for life
The advantages of a Group RRSP:
• A convenient, disciplined savings program through payroll
deduction
• Immediate tax reductions
• Dollar cost averaging reduces investment risk
• Group buying power – favorable interest rates and lower
investment management fees
• Income-splitting opportunities*
*If spousal account available under your program
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Termination or retirement (Group RRSP)
Plan for life
• At termination or retirement assets can be:
– transferred to another RRSP
– cashed out (minus the applicable taxes)
– converted into an annuity, or a RRIF
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Spousal RRSP account
Plan for life
Group RRSP
Employee account
• Your contributions
• Your tax deduction
• Account in your name
Spousal account
• Your contributions
• Your tax deduction
• Account in spouse’s name
Spousal RRSP account
Plan for life
Comparison of splitting retirement income
RRSP
Income
Taxes paid*
Money kept
Spouse #1
$50,000
$15,073
$34,927
Spouse #2
0
0
0
Spouse #1
$25,000
$5,096
$19,904
Spouse #2
$25,000
$5,096
$19,904
Total
$50,000
$10,192
$39,808
Income splitting
* We assume that the hypothetical tax rates are 30.146% and 20.384%.
Your group program - savings
Plan for life
Group savings plan
Tax-Free Savings
Account (TFSA)
Employee
voluntary
contributions
Review the document in your enrolment kit that states the main provisions of
your program for more plan details and other important information.
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What is a TFSA?
Capital gains and other investment income earned
will not be taxed – even when withdrawn!
• Started January 1, 2009 with a contribution limit of $5,000 per year, indexed to inflation
and rounded to the nearest $500 on a yearly basis
• TFSA withdrawals do not affect your eligibility and/or calculations for federal incometested benefits and credits
• Carry forward unused contribution room for an indefinite period
• Choose from a variety of investment options much like those in your group retirement
program
• TFSA assets can be transferred to a spouse upon death
• Effective savings vehicle for both short term and long term goals
Investments
Plan for life
Guaranteed funds
• Little or no risk
Compound Interest Accumulator
(CIA)
• Lower rate of return over
the long-term
Daily Interest Account (DIA)
Market-related funds
Fixed Income Funds
• Investments are not guaranteed
• Invest in a variety of securities
Balanced Funds
Equity Funds
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Investments
Plan for life
• Fixed Income Funds
-Invest in interest generating investments
-Treasury bills, bonds, mortgages
• Equity Funds
-Invest in equity or shares of corporations
-Canadian equity, American, International
• Balanced Funds
-Invest in a mixture of stocks and bonds
-Portfolio changes as market conditions change
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Your investor profile
Plan for life
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Avenue Portfolios
Plan for life
Example:
24% Canadian equity funds
13% International equity funds
13% U.S. equity funds
50% Fixed income funds
Investment period
Investor profile
Conservative
>25 years
Moderate
>25 years
Aggressive
>25 years
Conservative
20 - 25 years
Moderate
20 - 25 years
Aggressive
20 - 25 years
Conservative
15 - 20 years
Moderate
15 - 20 years
Aggressive
15 - 20 years
Conservative
10 – 15 years
Moderate
10 - 15 years
Aggressive
10 - 15 years
Conservative
5 – 10 years
Moderate
5 - 10 years
Aggressive
5 - 10 years
Conservative
<5 years
Moderate
<5 years
Aggressive
<5 years
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Systematic Asset Rebalancing
Plan for life
• Rebalances your portfolio to ensure your level of risk always
remains aligned to your investor profile.
• Activated when you pick an Avenue Portfolio but you can
deactivate it at any time.
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Lifecycle Movement
Plan for life
• Ensures that your investment
mix remains appropriate as
your investment period
shortens
• Activated when you pick an
Avenue Portfolio but you can
deactivate it at any time
More than 25
20-25 years
15-20 years
10-15 year
5-10 year
Less than 5
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Target Date Funds (TDF)
Plan for life
TDF 2015
Anticipated retirement date
• Series of funds based on
anticipated retirement
date
• Automatically riskadjusted as you age
Retirement Fund
TDF 2020
TDF 2025
TDF 2030
TDF 2035
TDF 2040
TDF 2045
TDF 2050
TDF 2055
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Automatic risk adjustment
Plan for life
Sample illustration to show the general trend
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Is a TDF the right investment for you?
Plan for life
Yes if :
•You are not interested in selecting investment funds
yourself
•You have little knowledge about investing
•You want the risk of your portfolio to decrease automatically
as you approach retirement
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Your investor profile
Plan for life
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Picking your own investments
Plan for life
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Your Investment options
Plan for life
To find out more…
• Consult the back of your enrolment form for a complete list
of fund options
• The “rates of return” and “fund summaries” can provide
useful information to compare investment performance
and any fees charged by the investment manager
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Your Investment options
Plan for life
To find out more…
• Consult the back of your enrolment form for a complete list
of fund options
• The “rates of return” and “fund summaries” can provide
useful information to compare investment performance
and any fees charged by the investment manager
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One page fund summaries
Plan for life
• Information on fund manager
• Objective, style of fund
• Top 10 holdings
• Portfolio composition
• Gross rates of return
• Fund summaries
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Your VIP Room and Retirement Calculator
Plan for life
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Education Centre
Plan for life
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Know your rights and responsibilities
Plan for life
It’s your right to receive information about:
•the features of your group program
•the investment options available to you
•the tools and services we offer
It’s your responsibility to:
•use the information and tools provided by your employer and Standard Life
•seek information about the rules and features of your plan(s)
•choose contribution amounts and investments when and where applicable
•seek financial and legal advice
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Key sections of your form – Personal information
Plan for life
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Key sections of your form - Beneficiary designation
Plan for life
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Key sections of your form – Payroll deduction
Plan for life
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Key sections of your form – Sign and date
Plan for life
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Key sections of your form – Investment instructions
Plan for life
Sample illustration
your form may look slightly
different
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Key sections of your form - Signature
Plan for life
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Key sections of your form – Investment instructions
Plan for life
Sample illustration
your form may look slightly
different
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Key sections of your form - Signature
Plan for life
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Online enrolment
Plan for life
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Online enrolment
Plan for life
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Online enrolment
Plan for life
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Online enrolment
Plan for life
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Online enrolment
Plan for life
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Online enrolment
Plan for life
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Online enrolment
Plan for life
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Online enrolment
Plan for life
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Online enrolment
Plan for life
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Account statements
Plan for life
• Summary of your account, detailed
information about your plans
• Includes your Retirement checkup
• Sent directly to your home or available
online in your VIP Room
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What you need to do?
Plan for life
• Read through the enrolment material provided
• Complete the investor profile questionnaire
• Choose an Avenue Portfolio or pick your own “à la carte” funds
• Complete the enrolment form(s) by the date set by your employer, who
will then take care of forwarding the form(s) to Standard Life.
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What you need to do?
Plan for life
• Read through the enrolment material provided
• Complete the investor profile questionnaire
• Choose a target date fund or pick your own “à la carte” funds
• Complete the enrolment form(s) by the date set by your employer, who
will then take care of forwarding the form(s) to Standard Life.
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What you need to do?
Plan for life
• Read through the enrolment material provided
• Complete the investor profile questionnaire
• Choose an Avenue Portfolio or pick your own “à la carte” funds
• Complete the online enrolment and return the beneficiary designation
form(s) to Standard Life
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What you need to do?
Plan for life
• Read through the enrolment material provided
• Complete the investor profile questionnaire
• Choose a target date fund or pick your own “à la carte” funds
• Complete the online enrolment and return the beneficiary designation
form(s) to Standard Life
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What you need to do?
Plan for life
• Read through the enrolment material provided
• Complete the investor profile questionnaire
• Choose an Avenue Portfolio or pick your own “à la carte” funds
• Complete the enrolment form(s) or the online enrolment, as well as the
beneficiary designation form(s), by the date set by your employer.
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What you need to do?
Plan for life
• Read through the enrolment material provided
• Complete the investor profile questionnaire
• Choose a target date fund or pick your own “à la carte” funds
• Complete the enrolment form(s) or the online enrolment, as well as the
beneficiary designation form(s), by the date set by your employer.
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Questions?
Plan for life
[email protected]
www.standardlife.ca
1-800-242-1704
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Plan for life
All digital assets such as images, sounds, footage and fonts contained in which were created by, licensed to or owned by
Standard Life Canada and its affiliates are subject to license restrictions. Use of these assets outside of their original
authorized purpose is prohibited without the written consent of the GDS, and may involve the disbursement of additional
licensing fees. Failure to obtain this approval may result in legal action. Any additional usage of the asset from what was
disclosed should be discussed with GDS to assure that the asset rights permit this use.
GDS must be advised before transferring assets such as images, sounds, footage and fonts to a third party regardless of
if they are original to Standard Life or purchased from an online bank.
Questions? [email protected]
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