2 Explore the Various Sources of Retirement Income Income before retirement (IBR) Income at...
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Transcript of 2 Explore the Various Sources of Retirement Income Income before retirement (IBR) Income at...
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Personal savings / Group plan
QPP/CPP
OAS
Explore the Various Sources of Explore the Various Sources of Retirement IncomeRetirement Income
Income before retirement (IBR)
Inco
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etir
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Income before retirement: $ 20,000 $ 40,000 $ 60,000 $ 80,000 $ 100,000
Income needed at retirement (70%): $ 14,000 $ 28,000 $ 42,000 $ 56,000 $ 70,000
Sources of income at retirement:
OAS $ 6,204 $ 6,204 $ 6,204 $ 6,204 $ 5,654
QPP/CPP $ 5,000 $ 10,000 $ 11,208 $ 11,208 $ 11,208
Personal savings $ 2,796 $ 11,796 $ 24,588 $ 38,588 $ 53,138
$ 14,000 $ 28,000 $ 42,000 $ 56,000 $ 70,000
In percentage:
OAS 44% 22% 15% 11% 8%
QPP/CPP 36% 36% 26% 20% 16%
Personal savings 20% 42% 59% 69% 76%
100% 100% 100% 100% 100%
Explore the Various Sources of Explore the Various Sources of Retirement IncomeRetirement Income
* Applicable rates as at January 2010
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Plan HighlightsPlan Highlights
Type of plan:Type of plan: Group RRSP
Plan objective:Plan objective: Accumulation for retirement
Eligibility to plan:Eligibility to plan: Immediate
Spouse eligibility :Spouse eligibility : Permitted
Participation:Participation: Optional
* Please refer to the "Plan highlights" document included in your enrolment kit
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Contributions :Contributions :
0 – 5 years of service: Voluntary: your choice
+ 5 years of service:
Employee: 3.5% of salary
Employer: 3.5% of salary
Voluntary: your choice
Transfers from other plans: Transfers from other plans: Permitted
Plan HighlightsPlan Highlights
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Benefits upon retirement:Benefits upon retirement: Annuity, RRIF
Benefits upon termination:Benefits upon termination: RRSP, cash
Benefits upon death:Benefits upon death:Payable to beneficiary. Can be rolled over to the surviving spouse's RRSP
Withdrawals while employed: Withdrawals while employed:
Employee and voluntary contributions: permitted
Employer contributions: not permitted (except for the HBP or the LLP)
Plan HighlightsPlan Highlights
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Advantages of Your Pension PlanAdvantages of Your Pension Plan
Employer contribution Immediate tax break Very competitive management fees Simple and effective investment solutions Easy member access for information and
assistance
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Immediate tax savings!Immediate tax savings!A contribution of $50 a weekreally only costs you: $35really only costs you: $35
Without a Without a ContributionContribution
Gross weekly salary $400 $400
Contribution $50 $0
Taxable balance $350 $400
Tax (marginal rate of 30%) $105 $120
Net Salary $245 $280
Difference of net salary after deduction of a $50 contribution: $35$35
Advantages of Your Pension PlanAdvantages of Your Pension Plan
Immediate tax savings!Immediate tax savings!
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Time is on Your Side!Time is on Your Side!
0
20 000
40 000
60 000
80 000
100 000
120 000
140 000
160 000
180 000
200 000
25 35 45 55 65
Estimated annual return of 6.5%
126% more in savings !
Investment of $20 x 52 weeks x 40 years
Investment of $40 x 52 weeks x 20 years
Acc
um
ula
ted
val
ue
at
ret
ire
men
t
Age (accumulation period)
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Setting Your Retirement NeedsSetting Your Retirement Needs
The "Setting Sail for the The "Setting Sail for the Future" softwareFuture" software
CompassCompass
A detailed assessment of A detailed assessment of your retirement savings your retirement savings needsneeds
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You are now readyYou are now readyto reviewto reviewthe third Port of callthe third Port of call