Plan for the Retirement You Want

Retirement planning is about more than determining when you can stop working. It's about coordinating your savings, pensions, government benefits, investments and other sources of income so they can support the lifestyle you want throughout retirement.

Whether retirement is several years away or you're already retired, MWFS can help you review your financial resources, income needs and investment strategy as your circumstances change.

Preparing for Retirement

As retirement approaches, the focus of financial planning gradually changes from accumulating savings to creating sustainable income.

A retirement review can help you consider:

• when you would like to retire;
• how much income you may need;
• your expected retirement expenses;
• workplace pensions and other retirement benefits;
• CPP and Old Age Security (OAS);
• RRSPs and other registered savings;
• TFSAs and non-registered investments;
• locked-in pension assets;
• tax considerations; and
• how long your retirement savings may need to last.

Starting this process before retirement provides more time to identify gaps and consider available options.

Understanding Your Retirement Income

Most retirees receive income from several different sources rather than a single retirement account.

Your retirement income may include:

• Canada Pension Plan (CPP);
• Old Age Security (OAS);
• workplace or defined-benefit pensions;
• RRIF or LIF withdrawals;
• annuity income;
• investment income;
• TFSA withdrawals; and
• other personal savings.

How these sources are coordinated can affect your cash flow, taxes and how long your savings last.

A retirement-income strategy should consider not only how much to withdraw, but where the income should come from and when.

Converting Your Retirement Savings Into Income

Registered Retirement Income Funds (RRIFs)

An RRIF allows accumulated registered retirement savings to remain invested on a tax-deferred basis while providing retirement income.

Minimum withdrawals are required beginning in the year following establishment of the RRIF, and withdrawals are generally taxable as income.

Learn more about RRIFs →

Life Income Funds (LIFs)

If you have savings originating from a workplace pension plan, some of those assets may be held in a locked-in retirement account.

A Life Income Fund can be used to generate retirement income from eligible locked-in pension assets. Withdrawal and unlocking rules depend on the pension jurisdiction governing the funds.

Learn more about LIFs →

Annuities and Guaranteed Income

An annuity converts a lump sum into a stream of income for a selected period or for life.

For some retirees, guaranteed income can help cover essential expenses and reduce reliance on investment withdrawals.

Income amounts and available features depend on factors such as age, interest rates, the amount invested and the income option selected.

Learn more about Annuities →

Investing During Retirement

Retirement doesn't necessarily mean that all of your investments should become short-term or guaranteed.

Your investment strategy may need to balance several objectives, including:

• generating income;
• maintaining sufficient liquidity;
• preserving capital;
• managing market risk;
• providing opportunities for longer-term growth; and
• leaving assets for beneficiaries.

Because retirement can last for decades, the appropriate investment mix should reflect both your immediate income requirements and longer-term needs.

Explore Investment Options →

Creating More Predictable Income

Some retirees place particular importance on knowing that a portion of their future income is predictable.

Depending on your circumstances, guaranteed or income-oriented solutions may include:

• GICs and term deposits;
• annuities;
• certain segregated fund contracts; and
• other retirement-income solutions.

Each has different features, guarantees, liquidity considerations and risks.

The objective isn't necessarily to select one solution, but to determine how different sources of income can work together.

Managing Withdrawals and Taxes

The order and timing of retirement withdrawals can affect both current and future taxes.

Planning considerations may include:

• required RRIF withdrawals;
• LIF minimum and maximum withdrawals;
• CPP and OAS timing;
• pension income splitting where available;
• use of the pension income tax credit;
• TFSA withdrawals;
• registered versus non-registered assets; and
• potential OAS recovery tax.

Tax considerations shouldn't be viewed in isolation. A withdrawal strategy should also consider cash-flow needs, investment objectives and estate-planning goals.

Planning for the Unexpected

A retirement plan should have enough flexibility to respond to changing circumstances.

This may include planning for:

• unexpected expenses;
• changes in investment markets;
• inflation;
• health and care needs;
• loss of a spouse or partner;
• changes in housing; and
• changing family or estate-planning priorities.

Maintaining appropriate liquidity and periodically reviewing your plan can help you adapt when circumstances change.

Estate and Beneficiary Considerations

Retirement accounts and investments are also an important part of estate planning.

Beneficiary and successor-holder designations, account ownership and the tax treatment of registered assets at death can affect how efficiently assets pass to a spouse, family members or other beneficiaries.

These arrangements should be reviewed periodically and particularly after significant changes in family circumstances.

Explore Tax & Estate Planning →

Already Retired? Your Plan Still Needs Attention

Retirement planning doesn't stop on your retirement date.

Regular reviews can help determine whether:

• your income continues to meet your needs;
• withdrawal levels remain sustainable;
• your investments remain appropriate;
• your beneficiary designations are current;
• your tax strategy should be adjusted; and
• changes in your circumstances require changes to your plan.

Your Retirement. Your Plan.

Every retirement is different.

Whether you're preparing to retire, converting retirement savings into income or reviewing an existing retirement-income strategy, your MWFS Representative can help you consider how your savings, investments, pensions and other income sources can work together.

Talk to Your MWFS Representative About Retirement Planning →

Retirement, investment and tax strategies depend on individual circumstances. Investment values may fluctuate and guarantees are subject to the terms and conditions of the applicable product or contract. Tax rules, government benefits and pension legislation may change. This information is provided for general educational purposes and is not intended as individual investment, tax or legal advice.