Okay, so it sounds depressing or foreign to start with the end in mind when thinking of retirement. Today, there are so many priorities to juggle such as housing costs, bills, education costs for children, vacation goals etc. Therefore, we can easily become overwhelmed by having to overlay the need to plan for retirement. It is so easy to just put it off until later while another year, that we will never get back, goes by.
 I confess that I have not met a single person who has professed that time goes by too slowly. To the contrary we lament the opposite. Just think of how often we see or hear a news report about an event or tragedy from the past and we think to ourselves, &ldquo;I remember that. That happened 5 years ago.&rdquo; Yet the report reminds us that it happened 12 years ago.
 This is where I can help simplify the process for you and get you started. Your initial investment may take courage-you need to act. From that point on however you will start building up your peace of mind and dismantling your regret.
You may be surprised to know that 47% of Canadians who are currently working believe they are at risk of outliving their retirement savings.1 Just look around you, at your colleagues in the office or in the field. That&rsquo;s nearly half! And not only that but 44% expect to be fully employed at age 66 with a full 66% of these people saying it would not be out of enjoyment.
Canadians are beginning to become disillusioned about the dream of retirement and many feel it may be well out of reach. For those Canadians fortunate enough to have already retired, 72% say their retirement is not what they were expecting.3 So how could a majority of Canadians be feeling so vulnerable about retirement?
 Well this final statistic from the Advisor&rsquo;s Edge Sun Life Barometer from 2019 may well explain why. Only 14% of retired Canadians said they had a financial plan prior to retirement.

Now, aside from personal goals for retirement, finance professors Ho and Robinson suggest three critical factors in the next image are critical factors in ensuring the basics of a good and happy retirement.
So, let&rsquo;s assume you agree with the 3 over-arching retirement goals mentioned above. This is a good place to start formulating a retirement plan to your design. Or if you already have a plan in place, are you comfortable that it is working for you or do you feel a need to re-evaluate elements of your plan to fit unforeseen circumstances or address a new personal goal you have set for yourself.
One approach that I use with my current and prospective clients is a very simple Personal Goals Checklist. It is something I would recommend that we go through together. It is also something that I would even suggest you and your partner go through before coming in to seek help in developing a retirement strategy. I only need to remind myself that some of the decisions I would like to have back were the ones that were made in haste or without the proper information to make that informed decision. This is why I would even suggest that you and your partner set aside some quality time, pour yourselves a glass of wine or a hot cup of coffee and meticulously go through the checklist. It&rsquo;s not a race so take your time. Be honest and realistic with your choices while still daring to dream. After all, goals are dreams and a roadmap to where you want to end up once you decide to leave your working career behind.

OLD AGE SECURITY (OAS) I know. What a way to start understanding what sources of income will be available to you when you retire than to talk about OAS&hellip;. old age security. I have read a number of articles on retirement planning where the author argues that the name for this Canadian Government safety net plan needs to change. Alas, we are still stuck with it.
 This &ldquo;old age pension&rdquo; was created as a federal government initiative to strictly provide Canadians with an anti-poverty level of income following their working years. The program has since become accepted and actually anticipated as a mainstream post-work income program. Enacted in 1927 and jointly financed by the federal and provincial governments in Canada because pensions were considered a provincial constitutional responsibility at the time, the pension paid $20 to British subjects aged 70 or older who had held residence in Canada for at least 20 years.
 It is not surprising that many recipients found the program to be humiliating for them because of the strict means test they had to pass to obtain the very basic measure of income. Thankfully an amendment to the British North America Act in 1951 enabled the federal government to operate a public pension program. Parliament subsequently passed the Old Age Security Act. This allowed Canadians aged 70 to receive a $40 monthly pension under more liberal residency requirements. The pension was also payable regardless of other income or assets owned by the individual.
A second piece of legislation enacted at the same time, the Old Age Assistance Act, provided a pension of $40 per month to retired Canadians aged 65-69. This program was cost-shared by the federal and provincial governments on a 50-50 basis and administered by provincial welfare departments, who used a needs test to determine eligibility. The elderly often saw the test as personally invasive and stigmatizing.
The OAS pension has progressed significantly to what is in place today and is now indexed to keep up with inflation however it cannot be taken prior to age 65. Federal policy toward old age pensions at this time appeared to be moving in the direction of limiting the public pension system to the antipoverty objective; that is, assuring a basic minimum of retirement income, while leaving the income-replacement objective to the private market and to individual responsibility.
 The maximum monthly basic OAS pension is currently $613.52. Benefits are indexed to the cost of living measured by the Consumer Price Index. OAS benefits are taxable by both federal and provincial governments. You should also know that if your income is $77, 58012 or higher you will have to pay back a portion of the benefits you received because of a clawback provision or pension recovery tax put in place by the federal government. If you earn more than $128,137 annually you will not qualify for any OAS benefits.
 Canadians can also opt to delay receiving their OAS pension by 5 years up to age 70. This would result in a higher monthly payment. For example, if you turned 65 in December 2019 and decided to delay receiving the Old Age Security pension for the maximum deferral period of 60 months, your monthly amount would increase by 36% at age 70 (0.6% x 60 months). If your payment amount was $549.89 per month, the increased monthly payment would be $747.85. Low-income seniors may also qualify for supplemental OAS benefits including the Guaranteed Income Supplement (GIS), the Allowance and Allowance for the Survivor which are not taxable. Because workers could not receive full retirement benefits for 10 years and to help low income retirees, the Guaranteed Income Supplement was introduced as a tax-free supplement in 1967. Although the original intent was to have this supplement phased out at some point, it has remained in place, once again to support seniors earning no or little income. The monthly benefit is available to those who are age 65, receive the OAS and earn less than $18,600 if you are single widowed or divorced. If you have a spouse or are common-law a combined maximum income level applies depending on whether the spouse also receives the OAS or other public Allowance payments. Basic information is always available on the Service Canada website. CANADA PENSION PLAN (CPP) The Canada Pension Plan is no doubt a quasi-public pension source that you are familiar with given that you have paid into the program all of your working life. In response to growing poverty levels in the senior population in Canada, the Canada Pension Plan was created through a federalprovincial negotiation in 1965. It was meant to cover 25% of a worker&rsquo;s average lifetime earnings up to a ceiling. The new pension plan covered workers across Canada except for Quebec where a parallel plan was created. Employers and employees were required to contribute on a 50/50 basis on a worker&rsquo;s earnings up to maximum eligible earnings cap. Reforms to the plan were introduced in 2016 largely due to the disappearance of corporate pension plans across the country. Unlike the OAS, you must apply for the CPP in large part because you can choose to start receiving the pension at age 60 or as late as age 70 although the standard age to draw the pension is 65. You must have also made at least one contribution to the CPP when working. The amount you will receive will depend on your average earnings throughout your working life, your contributions to the CPP while you worked and your age when you elect to take the pension. For 2020, the maximum monthly amount you could receive as a new recipient starting the pension at age 65 is $1,175.83. The average monthly amount for March 2020 is $696.56. Your situation will determine how much you&rsquo;ll receive up to the maximum. You can get an estimate of your monthly CPP retirement pension payments by contacting Service Canada. A calculator on the Service Canada website can be used to estimate what you can draw based on your circumstances and when you want to start receiving the pension. HISTORY OF REGISTERED RETIREMENT SAVINGS PLANS (RRSP) Most Canadians are familiar in some respect with RRSPs. In fact, of 14 million households, 65.2 per cent made a contribution to either a registered pension plan, an RRSP or a tax-free savings account (TFSA) in 2015, according to a statement by Statistics Canada and reported in a CBC news article dated Sept 13, 2017. The RRSP was first introduced in 1957 and extended to all Canadians in 1973 through changes to the Income Tax Act. Simply put what you contributed to the plan during the year could be deducted from your taxes. Originally the maximum you could contribute to the plan was 10% of your previous year&rsquo;s income up to a maximum of $2,500. Although the plan was devised to encourage Canadians to take personal responsibility for their retirement income and take the pressure off the government funding of public pension plans, many Canadians were disappointed with the beneficial impact on their income tax situation. In 1968, the first year contribution data was available, only 172,000 contributed according to an article that appeared in the Oct 6, 2016 issue of BenefitsCanada, written by Curtis Davis, Advisor. There have been a number of changes to the RRSP in terms of contribution limits, unused contribution room and various forms of plans since its introduction and we will deal with these in a subsequent chapter.
 TAX FREE SAVINGS ACCOUNT (TFSA) This savings vehicle was introduced in 2009. Just as its title implies, it provides a way for Canadians 18 years or older to set money aside tax free for their lifetime. The plan was created by the federal government as a way to allow Canadians to increase their savings rather as opposed to the income replacement intent of the RRSP, without any kind of tax clawback. Treated differently from an RRSP, you earn no tax deduction for the amounts contributed to the TFSA and there is no tax impact when you withdraw an amount from the account. We will examine the elements of the TFSA in a subsequent chapter suffice it to say, the account was described by a Canada Revenue Agency spokesperson as. &ldquo;An RRSP is primarily intended for retirement. A TFSA is like an RRSP for everything else in your life&rdquo;.
 As we get into more detail on the retirement savings vehicles we just touched on, surprisingly while RRSPs have been around for over 60 years, many Canadians have less than a solid understanding of how the plan works. In a survey conducted by Ipsos for TD Bank from Dec 17-19, 2019, and reported in the Investment Executive on January 27, 2020, 1500 Canadians aged 18 or older were polled on their understanding of how RRSPs and Tax Free Savings Accounts (TFSA) work (we will talk about TFSAs next). Fifty-nine per cent of respondents to the TD survey said TFSAs are crucial to their savings, and 57% said the same for RRSPs. But more than a quarter of Canadians (27%) said they don&rsquo;t know the differences between the two investment accounts with 30% of respondents saying they didn&rsquo;t understand the tax implications. I hope to be able to give you a clearer understanding of each offer and the critical features and strategies you can employ to design the best retirement possible for you.

The Federal Government philosophy on retirement for Canadians is that the Old Age Security (OAS) benefit is akin to the foundation of a home.19 If you qualify to receive the benefit you can expect an annual income of $7,217 based on current 2020 numbers. Provided you worked most of your life in Canada, the Canada Pension Plan (CPP) benefits are available to you which the government equates to the main floor of that home. Based on what you earned during your working years and whether you start drawing on this benefit at age 60 or wait until you are older, you can draw a maximum annual benefit of $14,109 again based on current 2020 figures. Our government then sees private pension plans and personal savings as supplementing what a Canadian can draw upon to fund their retirement years.
 You can see that in the best of circumstances, an annual income of some $21,326. would be available to you live on for the duration of your retirement and again subject to the pressures the government would face in continuing to fund the programs in their current form. Government of Canada website, 2020 So why does the illustration on the next page show that for most seniors in Canada the percentage of total income from the CPP benefit is actually lower than the OAS benefit?
 Many Canadians begin to draw CPP benefits at age 60 and are penalized under the sliding scale of reductions in benefits for early payment. We will review this in more detail later. Also, for some parents they did not work outside the home. Some new Canadians did not earn enough income or work enough years to qualify for the maximum benefits. We are indeed fortunate to live in a country where a level of income protection is there for us however it goes without saying that as you think about your current standard of living and your retirement dreams, this will hardly be enough. Source: ESDC, Statistics Canada, 2011
I began this book with a bold statement&mdash;It is never too early! I say this because we are all creatures of habit. Most of us are procrastinators and retirement planning is a subject matter that like death and taxes (yes, we will talk about these later) we seem to need help with getting started. I have heard many of my family, friends and now clients say that they did not know where to start. Some spent much time doing research and analyzing published strategies and trying to understand the number of retirement products and options, so much so that out of analysis paralysis, they ended up deferring any action on their retirement planning. What we have covered so far is a brief history on the public pension and savings plans made available to Canadians in an effort to raise as many residents above the poverty level. We have also observed that the direction all of this has taken is for Canadians to be able to take increasing responsibility for their retirement income planning all while benefitting from some measure of safety net income protection. Retirement income and assets come in many forms. We touched on the OAS and CPP which are the basics for most Canadians. There are however many more ways and strategies to save for retirement and we will delve into these in more detail next.

Well after all of the subject matter we discussed in this book, we finally get to the &ldquo;elephant in the room&rdquo;. Yes, taxes. You no doubt are quite familiar with the age old idiom attributed to death and taxes as the only certainties in life. Death and taxes are a common reference to the famous quotation: Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes. &mdash; Benjamin Franklin, in a letter to Jean-Baptiste Le Roy, 1789. However, Franklin&rsquo;s letter is not the origin of the phrase, which appeared earlier in Daniel Defoe&rsquo;s The Political History of the Devil.28 In the first chapter I highlighted some disturbing facts about the Canadian Retirement Dream: 47% of Canadians who are currently working believe they are at risk of outliving their retirement savings. 44% expect to be employed full-time at age 66&hellip; and 65% of those said it was not out of enjoyment. ▪ ▪ ▪ ▪ 72% of Canadians who are already retired say their retirement is not what they were expecting. Only 14% of retired Canadians said they had a financial plan prior to retirement.&rdquo; (endnotes 1-7) I also already mentioned a common concern shared by many retired Canadians-a concern that they will outlive their retirement savings. Tax lawyer and author Christine Van Cauwenberghe rightly points out that we have to be very strategic in our tax planning once we hit the age of 65 due to clawbacks on social benefits. It is also the reduction of net income for tax purposes, not necessarily the reduction of the amount of tax you pay, that is of most concern to seniors and retirees, due to clawbacks on: the Guaranteed Income Supplement which is no longer paid after earned income of $18,600 for a single person the Age Tax Credit that starts to be clawed back at an income level of $37,790 and is fully clawed back at $87,750 ▪ ▪ ▪ Old Age Security (OAS) where the clawback starts at an income level of $79,054 and is fully clawed back at $128,137 Nursing care costs where in Ontario, income testing determines the non refundable tax credits you get The clawbacks that apply are mostly calculated at 15% of every dollar you earn above the minimum threshold for the income source. There are reasons why taxes play such a dominant role in Canadian life and why it plays an even more dominant role during your retirement. We can mitigate against tax increases during our working years through efficient investment strategies and of course anticipated salary increases can help offset part of the pain. In retirement, our sources of income are often fixed so planning for the impact of taxes on our hard earned savings is paramount because no one is offering us a raise. We could debate all day whether Canadians are taxed relatively more or less than other countries in the free world and frankly, there is a wide divergence between tax rates for different kinds of Canadian households. According to a newly released study by the Organization for Economic Cooperation and Development (OECD), depending on who you are, your burden may be relatively high or relatively low in comparison with other countries. What is much less debatable is the fact that taxes in Canada have shown a steady increase. The Canadian Consumer Tax Index tracks the total tax bill of the average Canadian family from 1961 to 2019. Including all types of taxes, that bill has increased by 2,226% since 1961. Taxes have grown much more rapidly than any other single expenditure for the average Canadian family. Expenditures on food over the same period has gone up 639% ▪ ▪ clothing increased 769% shelter increased 1,593% Over the same period, the Average Consumer Price Index increased 750% while average cash income grew by 1,677%. The noted figures come from a Fraser Institute study and when you look at the data in visual form, it really brings the impact of taxes on our lives and retirement planning into sharp focus. Despite this history, when asked, most Canadians say they are willing to pay their fair share of taxes&hellip; they just want to know that it&rsquo;s being spent wisely and appropriately. A subsequent Fraser Institute study blamed Ottawa for $158 to $197 billion in waste since 1988 according to estimates from the Auditor General.&rdquo; And despite the claims of the present government working to help the middle-class&hellip; the numbers suggest otherwise. Although the middle-income personal income tax rate was reduced from 22% to 20.5%&hellip; 81% of middle-class families are paying $840 more taxes on average per year! We lose a lot of our income to many forms of taxation&hellip; some direct, like income taxes&hellip; some embedded and invisible. Source: Fraser Institute: Taxes versus the Necessities of Life: The Canadian Consumer Tax Index, 2019 edition Source: Fraser Institute: Taxes versus the Necessities of Life: The Canadian Consumer Tax Index, 2019 edition Source: The Fraser Institute&rsquo;s Canadian Tax Simulator, 2019 What the Fraser Institute really shows us is that we&rsquo;re working with 56 cent dollars after all forms of taxation take their toll. 56 cent dollars!!!!34 Source: The Fraser Institute&rsquo;s Canadian Tax Simulator, 2019. For us to do any kind of tax planning, we need to understand how we&rsquo;re taxed. We need to understand the basics of how our governments first of all tax our incomes through the marginal tax rates at the combined federal and provincial levels. The following tables show the current combined Federal and Provincial Marginal Tax Rates: Source: Ernst &amp; Young Electronic Publishing Services Inc., 2019. Source: Ernst &amp; Young Electronic Publishing Services Inc., 2019. You can see why we have to work with these marginal tax brackets so that we optimize our tax-effective strategies. In fact, Canada is one of few countries in the world that does not have an estate tax. We have what is called &ldquo;deemed disposition&rdquo; rules meaning your estate is fully taxed at date of death. This means, potentially, that if your estate holds more than $220,000 of taxable assets like RRSPs or RRIFs, it could be driven into the top marginal tax bracket, which in Ontario, is 53.53%.36 This means you have to consider both your retirement and estate taxation together, when making tax planning decisions. The last thing you want to do is to die with a lot of registered money!&nbsp;

Well, you have made it! You planned your retirement, ensured that you have enough income coming in and life is good. Are you curious what will be left in the end? Does it matter? Has your thinking or priorities changed now that your retirement plan is delivering on the hard work you put into ensuring a comfortable retirement? If I told you that should your taxable assets at death exceed 220,000 (2020 figures) your estate will be paying 53.53% tax in Ontario, and that does not include probate fees that can add up to 1.5% more tax based on the value of your assets.
Sounds crazy? That&rsquo;s Canada not much we can do about it right? Wrong! Just like your retirement estate planning can and should be planned, in fact when making tax planning decisions you should always consider your estate taxation when planning your retirement taxation. This chapter could and just might fill a whole other book. I wanted to touch on it to at least start the conversation, because I think it is too important to be ignored. https://www.quoteinspector.com/media/investing/estate-planning-charts-sm.jpg
Findings from a Decima Research study done in 2005 showed a troubling picture as it relates to Canadians and planning for their estates. A full 62% of Canadians did not have a Last Will and Testament. The study also found that 12% of Canadians did not have an up to date Last Will and Testament. As well the study noted that only 27% of adult Canadians living with their parents had taken the time to have any kind of family estate discussions. While these statistics might shock you, in perspective they are explainable. Like retirement planning, so many Canadians don&rsquo;t take concrete action because they just don&rsquo;t know where to start. A larger problem is that most of us don&rsquo;t like thinking about our eventual passing so we put estate matters off. After all, &ldquo;I don&rsquo;t care what happens after I am gone&rdquo; is something you hear other people say.
If you are reading this, it is because you are a client or prospective client, you care about your retirement and family who will outlive you and you have or are taking action to ensure the hard work you put into your retirement plans will not be destroyed because some basic estate planning was not considered and completed.
First and foremost, an appointment with a lawyer specializing in the drafting of Last Wills and Living Wills is essential. If there have been significant life event changes in your life or there have been important changes to tax laws that could impact your savings or estate plans, updating a Last Will is equally important. Choose your estate trustees and power of attorneys with care. This is not a popularity contest nor is it a &ldquo;I&rsquo;m related issue&rdquo;. There are so many responsibilities that need to be executed to settle an estate it is vital that the right person or people be selected. Just because they might be our children or a family member, it does not mean they should be your default power of attorney or trustee. These people need to have the abilities to do the job right.
Drawing on my experience with clients over the years, touching on questions like these have prompted a serious re-examination of estate issues to consider. For example, should you not be able to get out of bed tomorrow, other than leaning on your Power of Attorneys would you have a cash reserve to take care of things while you were unable to look after yourself? Do you have insurance in place to protect your income such as disability insurance and if so, do you have the right amount? Do you need health insurance? Do you have critical illness insurance to generate cash in case someone gets severely ill?
If (shudder) you don&rsquo;t wake up tomorrow? We spoke about wills, but do you have life insurance to pay off liabilities such as a mortgage, or to replace lost income to your household? How about money to fund your children&rsquo;s education and of course pay your last tax bill, legal fees and funeral costs. Adds up quick doesn&rsquo;t it? After these basic necessities are taken care of do you want to leave any gifts to children, grandchildren, family members or charities or organizations?
You might already own life policies personally or through work, which is great. Just make sure it&rsquo;s enough. A licensed insurance agent can help you make sure it&rsquo;s enough and review your current policies by doing a needs analysis including ensuring you have proper beneficiary designations. We can go on and on and on. There is so much to cover with estate planning, such as blended families, unexpected issues that arise, disabled children and the special care that goes with that.
As I mentioned earlier, a proper treatment of estate planning would fill another book. I just wanted to get you started on the basics. To protect yourself, talk with your advisor to discuss your specific needs and objectives and the professionals like lawyers, insurance agents or accountants you should be including in your plans.

Back in Chapter 1 I talked about a number of references that speak to the procrastination Canadians demonstrate towards taking action to establish and execute on a retirement plan. We touched on some of the reasons such as not knowing where to start and the daunting task of trying to become as informed as possible in order to make informed choices. In fact, retirement planning has become more difficult and complex over time but there are ways it can be simplified. In the past, more workers were covered by Registered Pension Plans (RPPs) that we reviewed earlier. More than 46% of workers had an RPP in 1977 compared to only 37% in 201747 and this percentage is shrinking steadily every year as employers can no longer afford the cost to offer such a benefit to their workers. We also saw earlier how retirement is now longer than it used to be. The appeal of Defined Benefit Plans was that it was simple, often automatic. There were no investment decisions to make. Unfortunately, less than 25% of Canadian workers have a Defined Benefit Plan today. This means most people must accumulate and calculate their retirement incomes on their own or seek help. Regrettably, seeking help is something people are not good at doing. Case in point: a 2019 study called &ldquo;How Much to Save? Decision Costs and Retirement Plan Participation&rdquo; (Goldin, Homonoff, Patterson, Skimmyhorn) looked at the retirement planning decisions of a pension plan for 300,000 active duty U.S. Army service members. One of the key findings was that if the decision to participate in a pension plan required too much thought, people may not contribute at all.48 There are many other studies that point to a similar impact on consumer behaviour with the key findings being-keeping it simple and introducing support and nudges to influence financial decisions. Another factor contributing to the paralysis is the deluge of articles and media stories that talk about how much a person needs to save for retirement. &ldquo;Almost all Canadians seem to be told that they should be saving as much as humanly possibly all of the time&rdquo; says retirement expert Malcolm Hamilton. And that is a wild exaggeration and generalization.&rdquo;49 I would argue that your standard of living should determine your savings. The goal is to maintain in retirement the standard of living you were able to afford up to that point. If you have the confidence, education or experience and the time to make and follow investment decisions, then perhaps you are a candidate to build your own retirement strategies. Being honest however, if you are time starved, less confident in financial matters then a certified financial planner (I have been using the term &ldquo;advisor&rdquo; interchangeably) may benefit you in the short and long run. There is not one answer. It depends on you. Now, you have perhaps seen the hard-hitting ads on tv from robo-advisor Questrade, where the featured investors lament having paid some 30% of their retirement savings in fees to their advisor. The advertising implies that you can save a significant amount of your savings by going it alone or letting your advisor go in favor of a do-it-yourself approach. As I said earlier, if you have the skills and time to be your own money manager, then that may be the best course of action for you. But contrary to what the ads imply, there is a lot of evidence that advisors often add plenty of value that might far outweigh fees in certain situations. It is one thing to research and decide on investing in a low risk Guaranteed Investment certificate or blue chip mutual fund or trying to manage non complex assets within a discount brokerage account and yet another thing to ensure your investment portfolio is adequately balanced and diversified as economic cycles change, let alone keeping track of the most favorable tax treatment you can get. The true value of engaging a financial planner or advisor rests upon some very fundamental principles. First is trust. Asking an advisor to set up a course and strategy for your hard-earned savings must be predicated on a high trust relationship, that is, you trust your advisor to always have you and your needs at the heart of everything so this means ensuring the sale of investment products are not in and of themselves a prime focus. Second is total honesty in declaring your risk tolerance and making sure your tolerance underpins your investment decisions. This is supremely important because the risk reward relationship is not easily understood or appreciated by many non-sophisticated investors. In the beginning it is not intuitive for someone to understand why they can only earn .5% on a GIC versus a much larger return on a stock. The appeal of investing in equities for example because of their historical growth can be quite strong and gratifying when their value increases, however as soon as a paper loss occurs, you can expect to be stressed or disillusioned. A Certified Financial Planner can offer clients value by improving your financial literacy and developing your saving and investment habits and improving your investment decision making. These are value-adds over and above the traditional notions that an advisor can build and implement a personalized retirement plan and select appropriate financial strategies and products for you. Here are some striking findings from a well-supported study conducted professors Claude Montmarquette and Nathalie Viennot-Briot of the Montreal-based Centre for Interuniversity Research and Analysis Organizations (CIRANO). The study offers strong evidence of the link between the presence of financial advice and the accumulation of wealth.
CHART 1: FINANCIAL ASSETS HELD BY ADVISED AND NON-ADVISED HOUSEHOLDS* *Non-advised households include all Non-Advised households, including Passive Non-Advised and Traders. In Chart 151, the finding show that advised households had four times the assets of those without an advisor. In chart 2 on the next page, you can see that the longer a household worked with an advisor, the greater the increase in financial assets.
CHART 2: GROWTH IN FINANCIAL ASSETS OVER TIME OF HOUSEHOLDS THAT RECEIVED ADVICE COMPARED TO THOSE THAT DID NOT RECEIVE ADVICE Chart 3 from the same study shows that advised households earned a 3% better investment return (the curved line) but the actual increase in assets was far greater. After just 4-6 years of working with an advisor, the average household had 58% more assets that a non-advised household. CHART 3: PERCENTAGE INCREASE IN THE NET WORTH OF ADVISED PARTICIPANTS OVER NON-ADVISED PARTICIPANTS WITH THE SAME LEVEL OF INITIAL ASSETS The most important benefit of working with an advisor appears to be a better savings habit. The study found that advised households save at almost twice the rate of non-advised households, so an advisor plays a crucial role in motivating people to save and invest for their future. At Retirement by Design our mission is to educate you, advise you and serve you in a way you find valuable. We believe in a holistic planning approach. We believe in the value of advice and relationships. We help you identify and achieve your objectives by asking the right questions and keeping in constant contact with timely information and support. To give you an idea of how everything we have talked about in this book comes together, let&rsquo;s look at some examples or case studies from my practice.

CASE 1: WE ARE CLOSE AND NOW NEED HELP BACKGROUND John and Jane are loving life, they have worked hard for 25 years both have Defined Benefit Plans and have been with the same employers their whole working lives. They would like to retire in 5 years and enjoy spending time down south during the winters. They have RRSP&rsquo;s invested in GIC&rsquo;s Mutual funds and cash. They both have not started investing in their TFSA&rsquo;s. They own their home and will have the mortgage paid off by the time they are retired.
FIRST MEETING They never really sat down with an advisor, just did things on their own and now have no idea if they are going to be ok or not. They came in to meet us because they wanted to have a written retirement plan done to see where they stood. After establishing their goals: Making sure they have sufficient income for the rest of their lives. Take advantage of any strategies to minimize taxes Set up their estate to minimize taxes after they are gone. We asked John and Jane to send us the following documents to prepare for our meeting: CPP statement of contributions Pension info Current investment statements Notice of assessments to establish RRSP contribution room 1. 2. 3. Budget form.
RESULTS With this information we were able to formulate a retirement plan that was able to help them achieve their 3 goals. The highlights were as follows: If they both live into their later years (90 yrs. plus) they have sufficient income to live the lifestyle they want. However, there is a danger if one of them dies earlier into retirement as their retirement depends on their 2 Defined Benefit pension plans, CPP and OAS. To offset this risk, we suggested an insurance policy to replace the potential early loss of these incomes. We recommended that they start investing in TFSA&rsquo;s this year to start saving tax free retirement income that can be used to sprinkle tax free income during retirement, and this can help reduce jumps in tax brackets and avoid some social benefit clawbacks. We will use an insurance policy later on in life used for income replacement during early retirement years to name their favorite charity as beneficiary to generate a donation tax credit to offset taxes on the last living spouse&rsquo;s terminal tax return. Now every year we sit down and discuss any changes to their situation and determine how much money to withdrawal from their RRIF&rsquo;s and TFSA to minimize taxes and social benefit clawbacks.
CASE 2: I NEED TO CATCH UP
BACKGROUND Harold came to see us at age 50 wanting to retire at age 65. He had not started saving for retirement. He came in not knowing where to start. His goal was to maintain his same lifestyle during retirement.
FIRST MEETING We asked Harold to prepare the following information: CPP statement of contributions Pension info Current investment statements Notice of assessments to establish RRSP contribution room Budget form.
RESULTS We prepared a written retirement plan that showed Harold what he needs to contribute to his investments to ensure that his objective is met to maintain current lifestyle. We recommended he begin investing his disposable income into an RRSP given he had had plenty of unused contribution room and take the tax refund he will receive every year from the RRSP deduction to invest into a TFSA.
His risk tolerance is medium risk. We recommended an appropriate investment that would help him achieve his goal and ensure that he does not erode his capital too quickly. It was important to consider the rate of inflation and not only taxes when looking at how fast Harold started redeeming your investments during retirement. One consideration we brought up with Harold was the risk that he become ill and might need to fund certain health care costs. (he is single and does not have children), Harold would need to be self sufficient for these costs. We discussed Critical Illness insurance and Long-Term Care insurance.
CASE 3: LIFE IS GOOD BUT&hellip;
BACKGROUND Andy and Sandy have been clients of our firm for 15 years. They have been retired, very happy, healthy and active. They have done everything we recommended with regards to savings, pension splitting and investment selection.
FIRST REVIEW MEETING During our annual review we discussed now that they were retired, in a great groove and enjoying all the years of hard work, did they have any concerns? We identified at a previous meeting together that they were not likely spend all of their money during their lifetime. That was a great problem to have however, when asked if they were interested in reviewing the potential tax liability for their estate at death, they agreed this would be important to them at this point of their lives. When looking at their written retirement plan it shows their pensions, CPP, OAS all indexed as well as their mandatory RRIF minimum payments. We determined Andy and Sandy would have a significant amount of RRIF money and non registered capital gains triggered at death. The amount would be over the current $220,000 maximum in income therefore attracting the maximum Marginal Tax Rate of 53.53%. To Andy and Sandy this is not acceptable. They wanted to have their children and grandchildren inherit as much as possible and minimize what the estate would have to pay out in tax.
RESULTS We proposed that the clients consider a joint &ldquo;last to die&rdquo; participating whole life policy that would pay a tax-free amount to their beneficiaries when the second spouse died. Where does the tax savings come in? Andy and Sandy would be redeeming more money from their RRIF&rsquo;s than the minimum amount they were currently redeeming. By doing so we took great care to make sure that we did not put the clients into a position where they start experiencing clawbacks on social benefits. They are taking RRIF money now, paying tax at a lower Marginal Tax Rate than 53.53% and using it to pay the premium on a policy that will distribute a tax-free amount to their beneficiaries upon the death of the last surviving spouse. With this new strategy, the clients&rsquo; beneficiaries will have much less worry about setting the estate tax bill with Canada Revenue Agency and receive a larger share of the estate assets. * Alternate names were given for these case studies to protect the identity of the persons mentioned

Someone once said to me, &ldquo;Life comprises of a period of time where you grow up and go to school. Next comes some 40 years that will be labelled as &ldquo;work&rdquo; and you will find that you have so many things on your plate at once like your many family needs, housing, education, your job and promotions and the need to provide for your post work years that it will go by in a blur. The next and final phase of your life can be labelled as retirement. Here you will sow what you reap!&rdquo; This is a rather clinical assessment of life that can make you somewhat fearful of lost opportunities. I on the other hand would view the statement as a call to action and an opportunity to use the roughly three quarters of the years in our lives to methodically plan and prepare for our final years. With the help of your financial advisor you will be able to take concrete action towards realizing the best retirement you can. I would very much like to be on that journey with you as your trusted financial advisor. Together let&rsquo;s get started

CHAPTER 1 Advisor&rsquo;s Edge, Sun Life Barometer, November 19, 2019 Advisor&rsquo;s Edge, Sun Life Barometer, November 19, 2019 Advisor&rsquo;s Edge, Sun Life Barometer, November 19, 2019 Statistics Canada: Labour force survey estimates, Table 282-0051, 2015 Statistics Canada, CANISM Tables, 2016 Statistics Canada, CANISM Tables, 2016 Statistics Canada, Canadian Demographics at a Glance, 2nd Edition, 2016 CHAPTER 2 Ho, Kwok and Chris Robinson; Personal Financial Planning, 5th ed. (Concord: Captus Press, 2012) Fralic, Shelley, (Aug 20, 2020) Life in the 60s: Seniors Living, National Post CHAPTER 3 Guest, Dennis, (Dec 16, 2013) The Canadian Encyclopedia, Old Age Pension Guest, Dennis, (Dec 16, 2013) The Canadian Encyclopedia, Old Age Pension Van Cauwenberghe, Wealth Planning for Canadians, 2019 and Government of Canada website, 2020 Van Cauwenberghe, Wealth Planning for Canadians, 2019 and Government of Canada website, 2020 https://www.canada.ca/en/services/benefits/publicpensions/cpp/old-age-security.html https://www.canada.ca/en/services/benefits/publicpensions/cpp.html Davis, Curtis, (Oct 16, 2016), Advisor&rsquo;s Edge, Happy Birthday RRSP Hanif, Bayat and Barry Ann (March 5, 2020) Savings Hippo, What Every Canadian Should Know About TFSAs Canada Newswire, (January 27, 2020), Investment Executive, Td Survey Finds Half Of Canadians Know Rrsps And Tfsas Are Critical To Their Savings Strategy, But One In Four Don&rsquo;t Understand The Differences CHAPTER 4 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 Government of Canada website, 2020, https://www.canada.ca/en/services/benefits/publicpensions/cpp/old-age-security.html ESDC, Statistics Canada, 2011, https://www.canada.ca/en/employment-socialdevelopment/corporate/reports.html CHAPTER 5 https://www.scotiabank.com/ca/en/0,,7462,00.html Collison, The Financial Advisor&rsquo;s Guide to Excellence, Thompson Reuters 2015 Carrick, Rob (March 1, 2020), Who Are the Big Users of RRSPs, Globe and Mail Cazzin, Julie (Dec 18, 2018), 8 key things about TFSAs and how Canadians use them, MoneySense https://www.canada.ca/en/revenue-agency/services/tax/registered-plansadministrators/registered-retirement-savings-plans-registered-retirement-income-funds-rrspsrrifs/economic-statement-measure-annuitants-rrsp-rrif.html https://www.canada.ca/en/revenue-agency/services/tax/registered-plansadministrators/registered-retirement-savings-plans-registered-retirement-income-funds-rrspsrrifs/economic-statement-measure-annuitants-rrsp-rrif.html Choi, Barry, (Aug 20, 2015) Don&rsquo;t Ignore Your Employee Stock Purchase Plan, Money We Have, https://www.moneywehave.com/dont-ignore-your-employee-stock-purchase-plan/ Thomson Reuters Canada Limited Work (Carswell imprint): The Financial Advisor&rsquo;s Guide to Excellence: Becoming a World-Class Practitioner, Revised Edition, by Daniel Collison, (978-0- 7798-5486-8) Reproduced by permission of Thomson Reuters Canada Limited CHAPTER 6 Wikipedia.org, Death and Taxes Idiom Nazareth, Linda, (June 14, 2018) How Canada&rsquo;s Taxes Compare With Other Oecd Countries Varies Between Singles And Families: Linda Nazareth In The Globe And Mail, https://www.macdonaldlaurier.ca/canadas-taxes-compare-oecd-countries-varies-singlesfamilies/ Fraser Institute: Taxes versus the Necessities of Life: The Canadian Consumer Tax Index, 2019 edition Fraser Institute: Taxes versus the Necessities of Life: The Canadian Consumer Tax Index, 2019 edition Fraser Institute, Federal Government Failure in Canada 2013 Fraser Institute, Update from the President, October 23, 2017 Palacios, Milagros and Charles Lammam, Taxes versus the Necessities of Life: The Canadian Consumer Tax Index, 2013 edition, Frasier Institute, April 2013, www.frasierinstitute.org The Fraser Institute&rsquo;s Canadian Tax Simulator, 2019 Ernst &amp; Young Electronic Publishing Services Inc., 2019 38 39 40 41 39-42 43 44 45-46 47 48 49 50 51 52 50-54 C.D. Howe Institute: 2007 Tax Competitiveness Report Mintz, Jack M., Duanjie Chen, Yvan Guillemette, Finn Poschmann, The 2005 Tax Competitiveness Report Unleashing the Canadian Tiger, C.D. Howe Commentary No. 2- September 16, 2005. CHAPTER 7 Moshe Milevsky, Are You a Stock or a Bond, FT Press, 2009 Deduct, Defer and Divide is a long-standing tax planning industry philosophy referred to by numerous financial planning professionals and authors of tax planning for retirement. Nicola, Tea, (Sept 25, 2016) WealthBar taxtips.ca Connolly, Michelle, (Oct 6, 2015), Advisor&rsquo;s Edge Guest Contributor, (July 12, 2018), When Is It &ldquo;Worth It&rdquo; To Work With a Financial Advisor? The Street Heath, Jason (Aug 24, 2020) Retirement planning can be so complex people avoid it altogether. Here&rsquo;s how to avoid that trap., Financial Post Thomson Reuters Canada Limited Work (Carswell imprint): The Financial Advisor&rsquo;s Guide to Excellence: Becoming a World-Class Practitioner, Revised Edition, by Daniel Collison, (978-0- 7798-5486-8) Reproduced by permission of Thomson Reuters Canada Limited Milevsky, Moshe A., Are You A Stock Or A Bond? Create Your Own Pension Plan For A Secure Financial Future (New Jersey: Pearson Education Inc. 2009) Milevsky, Moshe A., and Aron A Gottesman, Insurance Logic, Risk Management Strategies for Canadians: 2nd ed. (Concord: Captus Press, 2005) CHAPTER 9 Goldin, Homonoff, Patterson, Skimmyhorn, Aug 24, 2020, Financial Post Coxon, Lisa, (July 12, 2019), Are we being told to save too much for retirement?, LowetRates.ca Montmarquette, Claude, Viennot-Briot, Nathalie, The Value of an Advisor, www.cirano.qc.ca/pdf/publication/2012RP-17.pd

Where to begin, when you have so many people to thank that have made the journey so fun, in this very rewarding profession. Let me begin with my father Bruce, who helped me bring this project to life. He helped me put together a lot of the content as he is now retired and has a profound talent and interest in writing. My parents have taught me valuable lessons about finance from an early age and are great examples of two people who are enjoying a happy retirement. I am sincerely grateful for them. To my spouse Gabriella for the support and motivation to take on such an endeavour. She is and will always be my sounding board for the ideas I want to bring to life, without a doubt my better half. I am very fortunate to work with Gabriella and my eldest daughter Andrea. What a team! They make what I do very easy and make our clients feel like the most important people in the world as they should be. To all my colleagues at the Ottawa Financial Centre, who I lean on regularly for support and knowledge. They are always there to help in any way they can and have contributed immensely to my growth as a professional. I do what I do everyday for a couple of reasons. Most importantly, I love what I do and love helping people achieve their goals through the right conversations. We have built so many valuable relationships throughout the years and I cannot believe how fortunate we are to have so many clients that entrust us with achieving their hopes and dreams. This book is dedicated to them, no doubt! Lastly, I have always wanted to be a good example to my four children Andrea, Gabrielle, Dominick, and Sonya. They are all on their own journeys and I hope that they pursue whatever makes them happy and that they make the right financial decisions on their individual paths. I wish you the happiest of retirements, Shawn Bellefeuille, CFP, CLU, CHS, EPC

Shawn has been a financial advisor since 2002. He holds the following designations: Certified Financial Planner&reg; (CFP) designation. CFPs are professionals who have demonstrated the knowledge, skills, experience and ethics to examine their clients&rsquo; entire financial picture, at the highest level of complexity required of the profession. Chartered Life Underwriter (CLU) widely recognized for 90 years as a superior mark of excellence in the financial services industry. CLU designation holders are regarded as elite professional financial advisors who raise the bar in developing effective solutions for individuals, business owners, and professionals in the areas of risk management, wealth creation and preservation, estate planning, and wealth transfer. The Certified Health Insurance Specialist (CHS) designation was established in 2011 by The Institute for Advanced Financial Education (The Institute&trade;) to raise the bar on professional standards and practice methods of financial advisors in the health insurance sector, and to provide designation holders with expertise in this specialized field. The Elder Planning Counsellor (EPC) designation is designed to provide education for professionals working with clients over 55, in many different fields including financial planning, insurance, funeral planning, accounting, social work and nursing. Past president of Gama International Canada GAMA International Canada is a not-for-profit professional association that exists exclusively for leaders in the distribution of financial services. Member of Advocis The Financial Advisors Association of Canada Member of Million dollar round table Founded in 1927, Million Dollar Round Table (MDRT), The Premier Association of Financial Professionals&reg;, is a global, independent association of more than 72,000 of the world&rsquo;s leading life insurance and financial services professionals from more than 500 companies in 70 nations and territories. MDRT members demonstrate exceptional professional knowledge, strict ethical conduct and outstanding client service. MDRT membership is recognized internationally as the standard of excellence in the life insurance and financial services business. Shawn works with his spouse Gabriella and his daughter Andrea, At Retirement by Design the mission is to educate you, advise you and serve you in a way you find valuable. &ldquo;We believe in a holistic planning approach. We believe in the value of advice and relationships. We help you identify and achieve your objectives by asking the right questions and keeping in constant contact with timely information and support.
Bruce graduated from Carleton University in Ottawa (Hon.BA) in 1976 and joined CIBC. Over a 37 year career with the bank, Bruce enjoyed success in branch management, commercial and agricultural credit. Transitioning to head office roles, Bruce set up a national problem resolution capability for bank clients to have their complaints resolved. Bruce was also a key strategist and implementer when CIBC created the first banking Ombudsman&rsquo;s Office, a model quickly adopted by the other major Canadian banks as well as the first banking industry Ombudsman office. Bruce&rsquo;s last role in CIBC was as Senior Director Customer Care. The group specialized in resolving escalated customer complaints. The group was also one of the first divisions in the bank to train in process engineering and process improvement and LEAN methodologies enabling the organization to identify and implement operational efficiencies. Bruce has been married to wife Marlene for 45 years. They have three sons, 10 grandchildren and two great grandchildren on the way. Retired since 2013, Bruce and Marlene live in Quinte West Ontario and winter in Naples Florida. Bruce continues to consult periodically

Covering everything from retirement income and assets, taxes in retirement, and estate planning.

The Pursuit of Retirement

Covering everything from retirement income and assets, taxes in retirement, and estate planning.

Table of contents

Starting With the End in Mind

Goals in Retirement and How do I Get Started?

Basic Sources of Retirement Income

Retirement Income and Assets

Retirement Tool Kit

Taxes in Retirement

Tax Planning Strategies

Estate Planning

The Value You Receive From Your Advisor

Case Studies

Final Words

Bibliography

Acknowledgements

About the Authors