Retirement Income

RRIF important advantages:

• During the payout period, you may continue to invest the funds held in your RRIF in the same types of investments you held in your RRSP
• Although a RRIF may be opened at any age, it usually makes sense to leave your RRSP intact until you require the funds or until the year you turn 71
• A RRIF can be tailored to your individual income requirements
• The frequency and amount of payments you receive can be adjusted when needed to reflect changes in your income needs or changes in market conditions
• Your payment schedule is flexible and can be modified whenever you like: monthly, quarterly, semi-annual or annual payments
• While withdrawals on your RRIF can be made at any time, they will affect the payment schedule and the life of your plan
• A RRIF gives you the option to invest in a wide range of investments that will further assist in providing sufficient funds for your retirement

While annuities have traditionally been available only through life insurance companies, your ScotiaMcLeod representative can now provide advice on annuities and facilitate your purchase. There are a few important advantages of to an annuity:

• Provides the certainty of never outliving your capital
• Offers the security of regular income with equal payments over a specified number of years, or for life
• Provides retirement income without requiring you to make ongoing investment decisions

Life Annuities:

• Provide regular and equal payments for life with varying guarantee periods, which are usually 10 or 15 years
• This means that should an individual die within that time period, the remainder of the annuity would go to the designated beneficiary

Term Annuities:

• A Term Certain Annuity provides income until age 90 and then expires
• Annuity payments are a blend of your original principal and the interest paid by the institution
• The size of these payments depends on several factors: the amount of principal, interest rates at the time of purchase, age, life expectancy and guarantee periods chosen

Quick facts:

• Members of provincially regulated pension plans in Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick and Newfoundland can transfer their benefits to a Locked-In Retirement Account (LIRA.)
• Your Locked-In RRSP or LIRA can be invested in the same kind of vehicles as your regular RRSP
• Like your RRSP, they must be collapsed before December 31 of the year in which you turn 71
• The choice at that point is whether you transfer your money into a Life Annuity, a Life Income Fund (LIF) or a Life Retirement Income Fund (LRIF)
• Your Investment Advisor will help you decide which option is best for you

Quick facts:

• You and your ScotiaMcLeod advisor, are responsible for making the investment decisions in your RRIF portfolio
• Self-directed RRIFs offer the same wide range of qualified investments as self-directed RRSPs
• Ability to transfer your self-directed RRSP portfolio intact
• A RRIF is still a tax-sheltered vehicle
• Keep interest income-producing investments in your RRIF and the majority of dividend-producing and growth investments outside the plan, where they enjoy a tax advantage
• The flexibility offered by a self-directed RRIF allows you to alter your investments in response to changes in the markets or your own circumstances
• Wide choice of eligible investments
• Actively managing your RRIF portfolio enables you to potentially earn a better rate of return than with an annuity