Individuals Over Age 50
A formal Income Plan is essential to minimizing taxation, avoiding claw backs to government benefits, and knowing what rate of return you need to meet your goals. Knowing the rate of return required ensures you can minimize your exposure to unnecessary risk, and weigh the use of investment products with guarantees to further reduce exposure to market fluctuations.
The process we follow with ALL clients over 50 is as follows:
First we discover your income needs
Using our proprietary planning software we review current pension projections and investments including regular deposits or withdrawals.
From there we establish how you (and your partner) need your income to flow both now, and in the future, keeping in mind your estate goals.
Next we create an initial income plan
When do we take CPP and OAS? Should we perform a controlled de-registration of RRSPs? Which investments need to be used first, or last?
At this stage we create an income plan that addresses income gaps and ensures the most tax effective long term income assuming a long life.
Then we test the "what if" possibilities
What if your partner dies too soon and pension income reduces, or you have increased healthcare costs later in life.
At this stage we run multiple scenarios and stress test our plan to ensure it holds up, and if it doesn't, we make adjustments to the plan to reduce or eliminate the risk.
Only now do we analyze your investments
This is where most advisors focus first, but not us. Only after we know what your investments need to do could we ever advise what are best for your plan.
Do we need investment funds, or will GICs suffice? If funds are required, we compare after fee results of funds with capital guarantees vs traditional mutual funds and ensure you have both the features and performance your plan requires.
And Finally we structure a 5 year plan
We then establish a written 5 year plan which outlines yearly pension incomes, deposits, withdrawals and anticipated investment account values, all while focusing on tax minimization.
This 5 year plan is key to ensure we make the changes that are required each year, and you know what you can expect for your income and investment values.
Then follow up & adjust course as needed
Our 5 year plan not only gives an outline of the steps we plan to take each year, but it also provides us with value targets for each of our investment accounts.
By comparing the actual investment values each year to our 5 year targets it is very easy to see if we are on track, and if not, we are able to make changes before things get too far off plan.