winter 2014

Shannon B. Briske, B.Comm., CFPSenior Financial Planning Advisor

Byron T. Briske, B.Comm.Financial Advisor

Assante Financial Management Ltd. 500 Spadina Crescent East, Suite 301 Saskatoon, SK S7K 4H9 Telephone: (306) 665-3244 Fax: (306) 665-6691

211 Main St. / Box 1674 Kindersley, SK S0L 1S0 Telephone: (306) 463-6400 Fax: (306) 463-3966

Email: sbriske@assante.com

Since successful financial plans are many years

in the making, taking time to reflect on your

progress in the New Year is an important

annual ritual.

What small steps could help you reach your

objectives faster? What adjustments may be

needed to keep pace with any changes in your

life or personal situation? Have your goals

changed?

Let’s talk about keeping your finances and

investments well positioned for the future.

This just in – we’re living longer

Canadian pensioners are living almost three years longer than previously projected, suggested

The Canadian Institute of Actuaries in research published last summer1. It found that a woman now aged 60 is expected to live to age 89, and a 60-year-old man is expected to live to 87.

While these findings may help revise the standard mortality tables used for pension plan valuations, the prospect of living longer can challenge how we all save and invest for retirement. Here are a few ways in which longevity influences planning decisions:

Will you have enough to sustain the lifestyle you want? Are you saving enough now to fund your desired lifestyle over a possible 20 to 25 years of retirement? You may want to re-evaluate your retirement savings goal for the future. And during retirement, there may be a need to boost your portfolio’s growth component, with a strategy to produce lifetime income.

Will you ease into retirement? Since retirement may span a quarter-century,

many Canadians are choosing to phase into their new retiree lifestyle and earn income during the first few years. You may plan to work part-time, consult, or launch a business venture. This could alter plans for how much you need to save today.

Are you protected against health risks? An aging population means more Canadians may eventually require long-term care, whether in a residence or at home. To plan for this financially, you could purchase long-term care insurance, or self-insure by setting aside extra savings.

Should you wait to give an inheritance? If it’s important for you to help out children or grandchildren, you might plan to give a gift while you’re still living, if you expect to still be enjoying retirement during their time of greatest need.

We can help make sure your retirement savings plans take longevity risk into account, and include the right kind of investments to provide security. n 1. Canadian Institute of Actuaries, Canadian Pensioners Mortality, July 2013.

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estate Planning

How would you feel about leaving a large, lump-sum inheritance to an adult child

or grandchild who has little experience handling money? Or passing on sizeable assets to a spouse or beneficiary who has never been in charge of an investment portfolio?

Those are just a couple of examples where some people may decide to retain some control over a financial legacy, and how beneficiaries may use it.

There are several options available to help maintain control over an inheritance. One is through a testamentary trust that takes effect upon your death. And another little-known choice can be applied in specific situations: a life insurance product with an annuity settlement option.

Pay out benefits over timeAn annuity settlement option pays out the proceeds of a life insurance product over time, whether it’s a life insurance policy, segregated funds, or guaranteed

ways to keep control over your legacy

investment funds. Your beneficiary receives an annuity that makes periodic payments over a specified number of years, or for life — the choice is yours.

The beneficiary will not be able to change the payment schedule, so you must be satisfied with the fixed term, rate of payments, and the amount of the payments.

This insurance option may be appropriate in cases where a beneficiary is a younger adult or someone who may be best served by receiving an inheritance gradually. Another person can be named to manage the money on the beneficiary’s behalf, making the annuity settlement option suitable to provide for minor children or individuals with a disability.

a traditional trustA testamentary trust, which takes effect upon your death, can provide greater control to fulfill your wishes. Through a trust, you could stipulate that certain amounts of an inheritance are to be issued at specific times and direct how assets are to be used.

For example, you could direct a trust to be used for education savings and spell out how the money is to be used if the beneficiary doesn’t go to university. Or you could hold a family vacation property in a trust so that children and grandchildren can enjoy it, under rules and guidelines you set for its maintenance, use, and ownership.

You can also name a trustee and assign authority to manage trust assets on a beneficiary’s behalf. This level of control can make a trust a suitable option if a beneficiary is young, has a disability, or simply requires help from a financial expert.

You can also dictate different uses of a trust’s capital and income. For instance, you could ensure that beneficiaries receive income generated by the trust during their lifetime, with any remaining capital given to a designated charity after that. Or, someone in a second marriage could direct trust income to a spouse during his or her lifetime, leaving the capital to benefit children from the first marriage.

Pros and consAn annuity settlement option offers a simple way to break up a lump-sum benefit into a gradual payout. It’s also simple to implement and manage, making it an easy solution when the main objective is to provide an inheritance over time.

In contrast, a trust is more complex and can be expensive to establish and manage, but allows for almost unlimited control over how an inheritance is managed and given to beneficiaries. Also, where an annuity settlement option involves payments from an annuity, a trust allows you to have assets invested according to your wishes or assigned to the trustee, offering control over the type of investments and the objective.

We can help you protect the financial security of your loved ones and the legacy you leave, through the strategies and products best suited to meet your objectives. n

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retirement Planning

Investing for your retirement shouldn’t feel like a roller-coaster ride, as media reports so often seem to project. While

everyone has a different definition of what they’re comfortable with when it comes to investing, there are a few reliable ways to help smooth any ups and downs and adopt a more stress-free approach to building your retirement fund.

While there will always be a degree of volatility in any portfolio positioned to generate investment returns to reach a goal, these steps can help manage risk:

add stability with bondsBonds and other fixed-income holdings can contribute to investing comfort in all types of markets by providing a level of stability. In some periods, bond investments may be able to generate higher rates of income and a bigger overall contribution to portfolio performance. In other years, even if performance is muted, bonds may still provide stability in predictable rates. When equities suffer a down year, bond investments can often help provide a cushioning effect. That’s why the more conservative the portfolio, the larger the proportion of bonds, generally speaking.

Be true to your risk toleranceYou’re unlikely to feel comfortable with your investments if your portfolio is exposed to more risk than you are really willing to tolerate. Even if your portfolio was aligned with your personal risk tolerance when it was first established,

has that changed over time? For instance, stock

market swings that seem par for the course in your thirties might cause fitful sleep in your fifties. Or life events could change your whole view on risk. Receiving an inheritance, for example, may reduce the level of investment risk you need to take, and perhaps call for a shift to a more conservative portfolio.

stay diversifiedThere’s good reason why professional investment managers diversify across asset classes, geographic regions, industry sectors, different-sized companies, and investment style. Over the long term, diversification helps raise the potential for returns and minimize risk.

With a diversified portfolio, a sense of comfort can come from knowing there’s a good likelihood that the stronger- performing investments can help compensate for any underperformers.

In contrast, investors who continually pursue hot markets or try to escape from underperforming markets can lose the benefits of diversification, and actually take on more risk.

Consider funds with guaranteesIf having equity funds in your portfolio

tests your comfort level in accepting possible losses, you could consider investments with equity exposure that also offer guarantees. Segregated funds are investment funds with an insurance component that protects part of your capital. Of course, added security typically comes at a cost, which may mean higher management fees as a trade-off for the peace of mind.

It’s important to feel absolutely comfortable about your investments to be able to stay on track to reach savings goals. If you’re feeling any uncertainty, we’re here to help make any adjustments or review whether investments are suitable for your needs. n

invest for your future, in comfort

ease into retirement with good planning

After decades of saving for retirement, here you are: and now, as a retiree, it’s all about stretching your nest egg to fund a comfortable lifestyle in a worry-free way.

The role of financial planning is no less important in retirement than it was in the years leading up to it, even though your goals may be very different. It’s all about understanding and making the choices that are most comfortable for you now — and we’re here to advise you every step of the way.

As you begin to depend on your savings for income, your lifestyle may call for different kinds of investments and financial strategies — insured annuities, tax-efficient income from corporate class funds, or the cash wedge, to name just a few possibilities. It may also be time to focus on certain needs, from long-term health care to estate planning.

Our goal is to see you enjoy your retirement, take care of your loved ones, and help you plan to make the best use of your resources.

This material was prepared for and published on behalf of the advisor named herein and is intended only for clients resident in the jurisdiction(s) where their representative is registered. This material is provided solely for informational and educational purposes and is not to be construed as an offer or solicitation for the sale or purchase of any securities or as providing individual investment, tax or legal advice. Consult your professional advisor(s) prior to acting on the basis of this material. Insurance products are available through advisors registered with applicable insurance regulators. Individual equities are available only through representatives of Assante Capital Management Ltd. In considering any particular investment, please remember that past performance is no guarantee of future performance. Although this material has been compiled from sources believed to be reliable, we cannot guarantee its accuracy or completeness. All opinions expressed and data provided herein are subject to change without notice. Neither Assante Financial Management Ltd. or Assante Capital Management Ltd. nor their affiliates or their respective officers, directors, employees or advisors are responsible in any way for any damages or losses of any kind whatsoever in respect of the use of this material. Certain names, logos or graphics herein may constitute trade names, trade-marks or service marks (“Trade-marks”) of CI Investments Inc. and/or its affiliates or of third parties. The display of Trade-marks herein does not imply any licence has been granted to any third party. Assante Capital Management Ltd. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. Copyright © 2014 Assante Wealth Management (Canada) Ltd. All rights reserved.

RRIF withdrawal strategies

You can take out as much as you want from a Registered Retirement Income Fund (RRIF); there’s no maximum. But keep in mind that every dollar out is considered taxable income in that year.

That’s one reason many retirees try to only withdraw the minimum amount required by the government annually. Here are some other options to help save fees or taxes on RRIF withdrawals:

Age of younger spouse. You have an option to base withdrawals on the younger spouse’s age, setting the minimum payment at a lower amount.

Withdrawals in kind. You can take RRIF withdrawals in kind, including mutual funds, stocks, bonds, and some GICs. By transferring securities to a Tax-Free Savings Account (TFSA) or non-registered account, you avoid paying redemption fees.

Pension income tax credit. Income from a RRIF qualifies for the $2,000 pension credit on your income tax return. Even if you would normally not open a RRIF at age 65, it may be worthwhile just to benefit from the pension income tax credit. Simply transfer enough funds from your Registered Retirement Savings Plan (RRSP) to allow for RRIF withdrawals of $2,000 each year.

Time your withdrawals. You can choose the time of year you make RRIF withdrawals. By making annual withdrawals near the end of the calendar year, you’ll keep your investments in the RRIF longer and take greater advantage of tax deferral.

Talk to us about RRIF withdrawals and other ways to reduce tax on the rest of your retirement income program. n

Many people share a few common concerns about retirement planning – the

whims of the markets, longer life expectancies, or simply wishing to have enough to live comfortably in the future.

With all that in mind, where can you find an extra boost to help you reach your retirement savings goal?

Not everyone can simply shift to investments with higher potential returns, if it means increased volatility or exceeding a personal tolerance for risk.

There is a safer alternative to explore: you could opt to save more each year and increase the amount you invest.

To save more — or not — often raises a philosophical question that’s about more than money: is it worth compromising your lifestyle today for a richer life in retirement?

For those who are confident that their goals are on track and are well-positioned for future challenges, there may be no reason to boost regular investment amounts or to alter current spending and saving habits.

But for anyone open to saving and investing more, here are two approaches to deferring spending today in pursuit of reaping rewards later:

Reverse budgetingReverse budgeting takes a “pay-yourself-first” approach to saving. You figure out a specific dollar amount you need to set aside from each paycheque to reach a particular goal — in this case, retirement savings. The idea is that before you can

even spend your money, the chosen amount is put in the vault. It’s an automatic way to increase your retirement savings and accumulate a bigger nest egg.

With reverse budgeting, tracking monthly expenses is optional. Typically, you don’t need to monitor what you spend unless the pay-yourself-first amount affects your lifestyle or other important investment goals such as education savings.

Analyzing expensesBudgeting isn’t just for business owners or something to preach to your kids about. Personal finance gurus have been known to say that budgeting is not so much about restricting your lifestyle as it is about giving you the freedom to achieve what you wish.

In its simplest form, you could track and analyze monthly and special expenses with a view to reducing costs in certain areas and directing extra funds towards retirement savings. This may include finding ways to lower monthly fees and costs, such as through bundling phone, TV, and Internet services.

On a more significant scale, it could mean scaling back vacation plans or choosing a less expensive destination and applying the difference to your savings. Your budgeting system can be formal or informal, using whatever resources you have available.

But before you make any big changes, let’s review how well your current savings plans and investments are supporting your financial objectives. n

Keeping investment goals on track