One of our main goals is to make sure you retire comfortably. With Faheem Allidina & Associates at BMO Nesbitt Burns, you're working with retirement specialists. Our programs and methods are desiged to minimize fees during your retirement transition and provide personal support well beyond responsible investment advice. We take a holistic approach to wealth management by assessing your personal and financial goals, then design a comprehensive retirement strategy that matches your specific needs so while your career may be coming to an end your lifestyle won't have to! There are three main sources of retirement income; government sponsored plans, company pension plans and your personal savings. Government Sources Canadian Pension Plan (CPP) or Quebec Pension Plan (QPP) - You can reveive monthly payments starting as early as your 60th birthday. What you get depends on what you paid into the plan while you were working. You must be 59 or older and apply 9 months before you retire. Old age Security (OAS) - You must be 65 or older to receive payments. You don't have to live in Canada, but you have to be a Canadian citizen and have lived in Canada for a minimum of 10 years after the age of 18. What you get depends on your other income and how long you've lived in Canada. Assuming you qualify for the maximum payments in 2009, these programs combined provide an annual income of approximately $17109. Although OAS begins at age 65, CPP can begin as early as 60 with the benefit reduced by 1/2 percent per month you are under age 65 at the time your payments begin. Company Pension Plans In addition to the CPP, some Canadians have an employer-sponsored pension plan as a part of their total pay package offered by their company. These plans generally fall into one of two categories: Defined Contribution Pensions - Establishes a set amount that you and your company with contribute to your plan each year. The amount is based on how much you make. The amount you receive when you retire depends on how well the plan is managed. When you turn 71 you're required to collapse the plan and either withraw the funds (paying tax on the income), transfer the assets to a RRIF or purchase an annuity. Defined Benefit Pensions - Promises to pay you a set income when you retire often based on your income while you were working and the number of years you have worked using a company specific formula to calculate your benefit. Contact your HR department, union rep., or pension plan manager, to find out how your company calculates your benefit. Personal Savings One of the most effective ways of saving for retirement is through a Registered Retirement Savings Plan (RRSP). An RRSP is a personal "pension" plan you fund yourself. RRSP contributions are tax deductible and the funds inside the plan grow on a tax deferred basis. Comparing an annual $5,000 contribution into an RRSP and a $5,000 non-RRSP investment, assuming a 46% tax bracket, and an 8% return per year, after 25 years, the RRSP is worth over $272,000 more. Even if you cashed out the RRSP at the end of year 25 and paid 46% tax on the entire amount, you would still have over $90,600 more than what you would have saved outside an RRSP. Don't wait for retirement to catch you off guard! Educate yourself, ensure you have a program tailored to your needs and enjoy your golden years. Contact Faheem Allidina & Associates to discuss your retirement today!