The Plan by Investors Group^TM

Where will your retirement income come from? Important choices you need to make

As a working person, it's usually pretty easy to figure out where your income is coming from - and you often don't have a lot of say in the matter. As a salaried employee, you get a cheque or a direct deposit into your bank account - simple.

But when you retire, your income derives from a variety of sources that can be hard to get a handle on. And now you find that you have some important choices to make which can have a strong impact on the longevity, regularity and amount of your income, and the taxes you pay. That's why having a retirement income plan is very important.

Most Canadians will receive retirement income from a combination of four sources:

Government Benefits

As part of our country's social benefits system, guaranteed retirement benefits are available to all eligible Canadians.
- The Canada/Quebec Pension Plan (CPP/QPP) each provide taxable benefits to Canadians who have contributed to the plans (based on your level of contributions over the years).
- Old Age Security (OAS) is a basic taxable benefit paid to all eligible Canadian citizens, age 65 or older.
- Guaranteed Income Supplement (GIS) is an additional non-taxable benefit available to low-income OAS recipients.
Workplace Pension Plans

Many Canadians work for companies that provide a registered pension plan. Most employer-sponsored plans fall into these two categories:
- Defined Benefits (DB) Plans guarantee a certain level of pension income based on a pre-established formula that typically includes the number of years you were employed by the company and your salary.
- Defined Contribution (DC) Plans define your contributions and the employer contributions to the plan (if any), but not your pension income. At retirement, you may have the option of purchasing a life annuity, Locked-in Retirement Account (LIRA), a Life Income Fund (LIF) or other registered retirement vehicle, depending on the pension legislation that applies to the Plan.
Registered Savings Plans: Registered Retirement Savings Plans (RRSP) and Tax-Free Savings Account (TFSA)

RRSPs and TFSAs are among the best tax-saving, income-building strategies for most Canadians. You should get the most out of each of these vehicles by always contributing the allowable maximum each year and giving your money the opportunity to grow on a tax-deferred (when invested inside an RRSP) and tax-free (when invested inside a TFSA) basis for as long as possible.
Other Personal Assets

Income from your other personal assets can be used to top up your retirement income. This can come from a balanced portfolio of non-registered investments - such as stocks, bonds or mutual funds - that provide regular payouts, a home equity loan, income from a rental property, or even part-time employment. All of these investments can provide various amounts of money on a variety of schedules and will often demand that you make informed decisions to keep them producing the income you need.

At Investors Group we offer a suite of retirement income solutions that can be combined with your current income sources to form a portfolio that protects against downturns in the market while still providing considerable capital growth to support you in retirement. By planning now, you can rest assured that you will be able to enjoy and sustain your retirement lifestyle. Your Investors Group Consultant can help make this work for you.

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Written and published by Investors Group as a general source of information only. It is not intended as a solicitation to buy or sell specific investments, nor is it intended to provide tax, legal or investment advice. Readers should seek advice on their specific circumstances from an Investors Group Consultant. Commissions, fees and expenses may be associated with mutual fund investments. Read the prospectus before investing. Mutual funds are not guaranteed, values change frequently and past performance may not be repeated.