These are the eight sources of retirement income you need to know about


In RRSP season there is a lot of focus on your RRSP — surprise, surprise.

As most of you know, the RRSP will ultimately turn into a RRIF and be a key source of your income in retirement. What many people don’t always think about is other potential sources of retirement income.

In our work with retirees, we see up to eight different sources of funds that they can pull from to meet their monthly or annual expenses. Some are not thought of that often, but can become important. Not all will apply to everyone, but each one will be important to a segment of retirees.

Without further ado, here are the eight sources of retirement income:

1. Government Pensions — CPP, Old Age Security (OAS), GIS. For some individuals this can be more than $18,000 a year. It can be even higher if delayed receiving until past age 65.

2. Your Investment Portfolios — RRSPs, RRIFs, TFSAs, Defined Contribution Plans and Non-Registered accounts. The key is to determine which ones to draw on and when to minimize taxes. It will be different depending on your age, your health, your relationship status, and your current and expected level of income.

3. Your Defined Benefit Pension Plan — You may be one of those who have a plan through your work that pays you a fixed monthly amount — that may or may not increase based on inflation.

8 sources of retirement income.4. Your Corporate Investment Account — If you have a Corporation, pulling money from here will likely be considered as ineligible dividend income, but could possibly be tax free due to the size of your capital dividend account or shareholder loans. Often there is an opportunity to use insurance for estate planning or even in some cases for Retirement Planning where funds can come out tax free.

5. Annuities — These are essentially lifetime GICs with a locked-in rate that becomes a monthly source of cash flow. They have been less popular due to low interest rates, but for those who bought Annuities thirty years ago and are still alive, they will definitely sing their praises as an option for retirement income.

6. Your Home — If you own a home you can use a Home Equity Line of Credit to draw down cash over time, or maybe a downsize or sale of real estate is a key source of funds for your retirement. In some cases it may even allow for rental income.

7. Insurance Policies — This is sometimes an option and usually a forgotten one. Policy holders can often access cash through the cash surrender value of a policy without hurting the core insurance coverage. Sometimes you can borrow against the policy, or for those in their 30s to 50s, you might even be able to take out a policy on your parents as a form of retirement planning.

8. Your Kids (or other family) — This is usually not a preferred option, but depending on your needs and the family situation, this can be an important source of income.

Behind each of these sources of income is often a fair bit of thought and planning to maximize the income in a tax efficient way. For example, some individuals want less income in retirement. They don’t need the cash flow and they want lower taxes. In that case, they may look to fund Insurance policies in order to lower annual income and increase the estate.

Another scenario is the person with a large RRSP who is in their late 50s or early 60s. A lot of thought might go into the idea of drawing down the RRSP meaningfully over the next 10 years, and delaying taking CPP and OAS until age 70. If they do this effectively, they may be able to receive full OAS instead of getting clawed back, and in addition, they will have a smaller RRIF balance when they die and will face less tax at the end.

Even your home has important retirement income questions. We see people who received full OAS for several years, and then they sold their home and decided to rent. They now have significantly more investment assets and taxable income than they did before selling the house. Suddenly their tax rate goes up and they lose their OAS. In these cases, much more effort needs to go into tax efficient investment, and possibly gifting some assets to family or charity earlier than through the estate.

To help with issues of Retirement Income I have seen a few great Canadian web tools.

The Government of Canada has a solid tool to help manage your Government Pensions.

A website called Savvy New Canadians has a fairly detailed overview of RRSPs, TFSAs, CPP and OAS.

And my firm TriDelta Financial recently put out the 2019 Canadian Retirement Income Guide which provides further insight into how best to manage your various forms of retirement income.

Just like the game of hockey is much more complicated than simply shooting at the net, remember that your retirement income is about much more than simply an RRSP or RRIF. There are hopefully many sources of income for you, but the more sources of income, the more complex some of the tax and planning issues become.

May your biggest challenge be figuring out income sources number one to seven, and not about how to ask for funds from number eight.

Reproduced from the National Post newspaper article 4th February 2019.

Ted Rechtshaffen
Written By:
Ted Rechtshaffen, MBA, CFP
President and CEO
(416) 733-3292 x 221

Travel insurance is a must.


Prepared to risk it for a few bucks?

Whether you’re a snowbird enjoying the warm weather for 5 months, taking a week-long all inclusive vacation to a beach or skiing down the slopes, it’s always a good idea to get travel insurance before you go.

The following is a true story:

Later that night after enjoying a meal at one of their favorite restaurants in Florida, Carrie began to feel nauseous, lightheaded and faint. Since the symptoms remained for a few hours, her husband Alan called an ambulance. The paramedics rushed them to the nearest hospital where a doctor diagnosed Carrie with food poisoning. After resting at the hospital for three hours, she was given some prescription medicine and then sent on her way. As they were leaving the hospital, Alan was handed a bill for $4,000. They were flabbergasted at the cost, but relieved to know that they had travel insurance through his work. On the way back to the hotel they discussed how fortunate Canadians are with our healthcare system.

While sifting through the mail upon their return from the vacation, Alan noticed a bill for the ambulance for $500. He spoke with the travel insurance representative from his work and was told that the coverage did not include ambulance rides; this he had to unhappily pay for out of pocket.

The moral of the story here is, ensure that you have proper medical insurance in place. If you have travel insurance through work, make sure that the coverage that you thought you had covers what you expect it to. If you do not have proper insurance coverage, seek advice and get a travel insurance plan suited to the needs of the travelers.

Experts from the site established that abrupt discontinuation of the drug should be avoided due to the risk of withdrawal symptoms (see section Special instructions and precautions for use). All patients should reduce the intake of the dose of the drug gradually when stopping the treatment or reducing the daily dose.

If you would like to find out more information about travel insurance or get a quote, please do not hesitate to contact me.

Written by Jay Bernbaum, TriDelta Insurance Solutions

How to Achieve True Wealth


We all seek it, but very few of us are fortunate enough to grasp the sense of true wealth.

I’m not referring so much to the amount of money you have, but to achieving complete fulfillment in your life. To find the answer, I will take you on a short journey and demonstrate why your best efforts to date might not have delivered on your aspirations and dreams.

Firstly, I believe most of us set ourselves up for failure from the outset by looking for the quick fix. We confuse speculation with investing. Let’s not kid ourselves; most of us spend more time planning where we are headed over the holidays than our future well-being. We’re trained in fields other than financial management yet somehow feel we have the smarts to do it ourselves.

Some of us have realized that it would be wise to consult an expert, which is a positive step but still fails to consider how each of the different financial initiatives affect each other. By working with a mutual fund salesperson you may have achieved a good RRSP plan, but not given any thought to adequate insurance coverage or paying down the mortgage. One step forward, two steps back in my humble opinion.

Once an overall plan has been put in place the role of the specialist can be better defined

I’m a strong advocate of financial planning as the one discipline that considers all aspects of your financial situation and the development of a plan to suit your individual and family needs. Once an overall plan has been put in place the role of the specialist can be better defined whether it is investing, insurance, debt consolidation or estate planning.

Having dealt with literally hundreds of clients over the years has confirmed my belief that the only sure path to success is to have a holistic plan. Sounds simple enough, but is rarely achieved.

True wealth is…

As a professional financial planner, I start off by challenging clients to really think about their lives in a way that they haven’t before. I’ve developed a number of tools to challenge my clients to evaluate where they stand and articulate future life aspirations.

In the simplest terms, our lives can be divided into five categories:

  1. Financial
  2. Health
  3. Relationships
  4. Adventure
  5. Spiritual

While these are obviously interconnected, each one is distinct and should be considered separately. I then focus on incorporating a plan that is needed to allow them to achieve ‘true wealth’. This is about finding the ideal balance between all the various elements of financial planning as it relates to their specific goals and aspirations.

At TriDelta, we look at your lifestyle and get you involved to clarify your priorities before we start on a financial plan. We offer unbiased advice and solutions because our compensation has no bearing on the product or package you select. We are about the big picture and we focus on finding the right balance between all the aspects of your financial life – investment management, protection (insurance), estate planning, tax minimization and cash flow management to achieve your goals.

We are part of a new breed of financial boutiques whose growth is being spurred by clients looking for better value than they get from their bank.

How do you define true wealth? What do you value in a financial planner? We encourage you to take the next step towards true wealth by contacting us.

While you’re here, please leave a comment below.  This article was written by Anton Tucker, VP of TriDelta Financial. You can follow him on Twitter or connect with him on LinkedIn.

4 Challenges to Planning Your Parent’s Retirement


Are you a baby boomer? Have you had the conversation with your parents? Now is the time to plan their retirement (image/istock)

The Baby Boomers are doing some serious retirement planning these days.

Just one problem. They forgot to plan for their parents.

They may be 55, but their parents now need their children more than ever before.

I have many clients that have at least one parent with Alzheimer’s disease — often in their 80s or 90s. The Boomers face many social, physical and mental challenges with their parents. These can be very difficult on their own.

In addition, there are several financial challenges that arise that must be faced and in every case, intergenerational or cross-family financial discussions are the key to a positive outcome. Here are four challenges to deal with and possible solutions:

1. We saved for our retirement, but didn’t plan on paying for everyone else’s as well.

Every retirement planning discussion should include the following question: “Are your parents and in-laws likely to be a financial burden, fairly independent, or are you expecting a meaningful inheritance?”

While many people have a hunch about it, they really need to have a better handle on it, as it is key to their own retirement plans. In my firm, we recommend that, if possible, they have a conversation with their parents that starts with: “We are doing some personal retirement planning, and we were asked a question about our parents. We don’t need to get into huge detail, but we wanted to have a discussion about whether we might need to provide some financial support to you or whether we thought there would be a meaningful inheritance. (Wait for laughter to stop.)”

It is possible that this question will have a pretty short response and won’t go further, but in most cases it does open the door to a more complete discussion.

2. Why are we responsible for Mom and Dad? What about your brothers?

Sometimes life isn’t fair. There is always someone who shoulders  more of the load. It doesn’t stop just because Mom is getting old and needs support.

Support for older parents is both in terms of time and energy, and also can be in terms of money.

In many cases, women in particular have to retire early and give up an income to look after parents. This in itself could affect their retirement plan. Should they be entitled to get paid by the parents? Should they get a larger inheritance?

In an ideal world, the child that provides most of the caregiving is not in need of any compensation, and the parents can pay for any needs that arise.

In the real world, sometimes there does need to be some financial compensation for all of the time that one child puts in. With siblings, you will likely never get full agreement on these arrangements. It is usually something that should be co-ordinated between the caregiver child and the parent, and other siblings should be notified of the facts. It isn’t a vote.

3. We should have had the insurance discussion sooner.

If you are 45 years old, do you know what insurance coverage your parents have? Do they have critical-illness insurance, long-term care insurance, individual life insurance, joint first-to-die, joint last-to-die life insurance? Did their insurance coverage expire at 65 or 75?

The reality is that this is your business. All of these insurance policies, other than joint last to die, will have an impact on your parents’ financial well-being. They may mean the difference between them being able to look after themselves financially or require your financial support.

This conversation is also a good eye-opener for the 45-year-old — and it may raise some opportunities.

Opportunity No. 1: It may be too late for your parents to be properly set up due to health issues, but now is the time that you should be ensuring that living benefits like critical-illness insurance, in particular, is explored.

Opportunity No. 2: If one of your parents is in reasonably good health — even if they are 75 years old — taking out a life insurance policy on a parent may be an important part of your retirement plan. I know this may not seem right at first glance, but if the 45-year-old is going to have to look after the parents financially, it can impair his personal retirement plan. If his insured parent dies in 20 years, the son will receive a tax-free insurance payout at age 65 — a perfect time from a retirement perspective. In many cases, the return on investment of this type of insurance policy can be 7%+ on an after-tax basis.

4. Do Mom and Dad have powers of attorney in place? What about their will?

Once again, what might not be considered your business can quickly become your most important business. They should have a power of attorney over personal care. This provides guidance on who can make medical decisions on the patient’s behalf, if he is unable to make his own decisions. It usually deals with items like whether you want doctors to make ‘heroic efforts’ to save your life, or not.

I started taking Ambien five days ago and was ready for morning drowsiness. To my big surprise, my expectations didn’t come out. I felt absolutely fine. By now, I don’t feel any side effects. I no longer have trouble falling asleep, and it’s a real miracle to me. The best sleeping pills I’ve ever taken, for sure.

There should also be a power of attorney over property. This gives someone the ability to sign documents on another person’s behalf. Without it, many necessary financial transactions and decisions will happen at a snail’s pace.

As for their will, do you know where to find it? Has it been looked at in the past 20 years? Are the executors of the will up to date? Have the named executors died 10 years ago? These issues could become a nightmare for the survivors if they aren’t reviewed and clarified.

I believe the most important issue here is opening up the lines of communication with older parents. It is important to position the conversation in terms of your own personal planning, and addressing questions that you need to answer to complete your plan.

As the Baby Boomer children, you need to have these conversations with your parents. It will benefit everyone in the long run — and there is no day better than today.

This article was originally published in National Post. You can follow him on Twitter for more financial advice.

Click here to download our 2012 Retirement Income Guide

Ted Rechtshaffen
Written By:
Ted Rechtshaffen, MBA, CFP
President and CEO
(416) 733-3292 x 221