Help your parents secure their legacy

Is it time to have the talk with your parents?

Do you remember when your parents sat you down for the talk? Back then, it likely included some anxious moments and uncomfortable feelings.

It could be time to think about another talk, but this time you’d be initiating a conversation your parents may have Talk to Parents About Legacy & Fiancesbeen avoiding – about how they want their final wishes carried out.

It’s time to have the talk

Here are a few suggestions when it comes to discussing their legacy:

1. Take advantage of the time you have. You’re on the right track by helping your parents think about this now as opposed to reacting in the moment. Taking the time now helps your parents put the right plans in place to protect what matters most to them.

2. Get organized and help ensure your parents’ wishes are maintained. Help your parents understand the value of getting organized early on so their wishes are understood and carried out according to plan.

You’re on the right track by starting to think about this now, as opposed to reacting in the moment.

3. Ensure they choose someone as their power of attorney. Encourage your parents not to wait too long to select their power of attorney. A lot of important decisions may end up in this person’s hands, and the more time they have to understand your parents’ preferences, the better.

Things to consider

Figuring out your parents’ wishes can take time. When you’re having the talk, it’s important to keep in mind how you can work with a financial security advisor to help protect their estate. Some things to think about when developing a plan are how to help:

  • Protect your parents’ investments from market downturns.
  • Avoid unnecessary legal, estate administration fees.
  • Ensure their money goes directly to the people and/or cause(s) they have chosen.

Work with a financial security advisor to include an Estate Protection policy on their financial security plan. It combines potential growth with protection for the beneficiaries of the policy to help make sure the estate is secured.

What should we talk about?

Start with the basics and learn about:

  • Your parents’ sources of income
  • Any mortgage balance outstanding and types of insurance they have
  • Their medical history
  • The name of and contact information for their advisor (if they don’t have one, ask about how they’ve been making financial decisions)
  • Whether they have a documented will, living will and power of attorney
  • How they would like their money allocated (i.e., to family, friends, charity or a combination of these)

While you’re helping your parents develop a plan, encourage them to provide their banking information to their power of attorney.

I can help your parents ensure their wishes are carried out. Whether you’re having the talk for the first time or revisiting the subject, you can feel a sense of relief and security knowing you’re helping them carry out their final wishes.

Your guaranteed paycheque in retirement

After spending years working, you’re now closer to retirement and might be thinking about what that means to you. For most people, retirement is a time of mixed emotions. Along with the excitement of entering this new phase of life comes the nervousness stemming from the absence of a paycheque or steady income. As you approach retirement, you could be asking yourself:

  • What will my spending look like in retirement?Guaranteed Retirement Income
  • Will my money last?
  • Do I need to worry about interest rates?
  • How will market fluctuations affect my finances?

Do you have a plan in place for addressing these concerns? What if there was a way to help you feel confident about your finances in retirement?

Challenges in retirement

It is well-documented that Canadians are living longer. Statistics show retirees now need to plan for as long as 20 to 30 years in retirement1. This makes it critical to secure a part of your nest egg in a way that can provide you with guaranteed income – similar to a paycheque – for the rest of your life.

Income annuities – a steady paycheque throughout your retirement

Fortunately, there is a way for you to receive guaranteed income for life – with an income annuity. Securing a part of your retirement nest egg with an income annuity can help you cover most of your basic living expenses throughout retirement. Then the other portion of your money can be invested in funds that have the potential to grow.

Income annuities – other perspectives

Not only are annuities a great way to receive a steady income throughout retirement, there are other factors that make income annuities even more attractive in retirement. They provide excellent value even in low interest rate environments, provide a predictable income regardless of whether markets are up or down and can also help with estate transfer.

Watch this animated video about how income annuities can be your personal paycheque in retirement.

To find out more about how annuities work, exclusive annuity features and options and how income annuities may fit into your plans for retirement, speak to me.

1Issues related to increasing the “retirement age”, Canadian Institute of Actuaries, 2013. http://www.cia-ica.ca/docs/default-source/2013/213038e.pdf

Protection from the unexpected

When it comes to cancer, heart attack or stroke, you may think: “That couldn’t happen to me.”

The risk of experiencing a life-threatening illness is very real.

But the truth is, the risk of experiencing a life-threatening illness is very real. Did you know:Protect Family from a Critical Illness

  • Two out of five Canadians will develop cancer in their lifetime?1
  • Every four minutes, someone in Canada is diagnosed with cancer?1
  • More than 400,000 Canadians live with the long-term implications of a stroke?2
  • Your financial security plan can include protection for the unexpected?

Chances are you know someone who’s experienced cancer, a heart attack or stroke. Most of us have. A critical illness can affect almost anyone – including people who are in otherwise perfect health.

While it’s not fun to think about what might happen if you, your spouse or child experience a critical illness, it’s important to have a plan in case the unexpected occurs. This plan should help ensure you/your family can:

  • Pay important bills (mortgage, hydro, gas)
  • Cover medical expenses not covered by government or workplace health benefit plans
  • Afford alternative treatments to help with recovery
  • Avoid dipping into retirement funds or savings to cover expenses
  • Concentrate on recovery, rather than worry about finances

I can help you create a plan – including critical illness insurance – to help protect yourself and your family from any financial, or non-financial issues that might come up.

1 Canadian Cancer Society, “Cancer statistics at a glance”, http://www.cancer.ca/en/cancer-information/cancer-101/cancer-statistics-at-a-glance/?region=on.

2 Heart & Stroke Foundation, “Statistics”,http://www.heartandstroke.com/site/c.ikIQLcMWJtE/b.3483991/k.34A8/Statistics.htm#References.

Protect Your RRSP with Critical Illness Insurance

You’ve got a plan

You’re well on your way to meeting your retirement goals. You’ve taken the steps needed to build a retirement plan, including setting up a registered retirement savings plan (RRSP). By contributing on a regular basis, you’re helping to secure funds for your retirement. You may already have an idea of how you’ll use those funds and what you’d like life after work to look like.

Heart Attack, Stroke or Cancer

What if illness interrupts your plan?

Some people think of an RRSP as the key to retirement and a safety net for unexpected events. However, what would happen to your financial security if you became critically ill? A life-threatening illness can affect your family, your ability to work and your future, well beyond recovery.

A serious, life-altering illness strikes one in three Canadians in their lifetime.*

Cancer, heart attack and stroke account for 85 per cent of critical illness insurance claims paid up until 2013 in Canada.*

*Source: Munich Re, Individual Insurance Survey, 2013

Would you need to withdraw from your RRSP early?

If you had to withdraw funds unexpectedly, how much would the money from your RRSP be worth? It might be less than you expect after taxes and applicable fees if it’s withdrawn earlier than planned. You’d also miss out on accumulated long-term growth.

Could you get back on track?

If you’re unable to work because of a critical illness and have to withdraw money from your RRSP to cover expenses, what would you do once you recovered?

Ten years of retirement savings could quickly disappear in just one year. How would you get your retirement plan back on track? In this situation, you could:

  • Retire with less and change your retirement lifestyle,
  • Work longer and retire later

Help protect your retirement

By protecting your retirement now, you’re helping to ensure you have the retirement lifestyle you
want. Creating a safety net will help protect your retirement savings so your long-term financial plans aren’t interrupted by a serious illness.

With Great-West Life critical illness insurance, you’ll receive a one-time payment if you are diagnosed with a critical illness as defined in your policy and the survival period (usually 30 days) has been satisfied.* You can use these funds however you want—supplement lost income, pay for private nursing or cover mortgage payments.

great-west-life-insurance-critical-illness

The choice is yours.

How critical illness insurance can work for you

Let’s say you have invested $50,000 in an RRSP and contribute $500 a month. You expect to retire with $359,274.** However, your savings at retirement could be very different if you become critically ill. To understand how you can help protect your family, lifestyle and retirement savings, let’s look at how critical illness insurance could work for you.

Retire with$359,274

  • No critical illness insurance
  • No critical illness
  • Contribute to RRSP as planned

Retire with $333,847

  • Buy critical illness insurance with return-of-premium
  • Reduce monthly RRSP contribution
  • Never make a claim
  • RRSP grows to $286,067
  • At retirement premiums returned ($47,780)

Retire with $314,152

  • Buy critical illness insurance with return-of-premium
  • Reduce monthly RRSP contribution
  • Get $100,000 insurance benefit if sick
  • Return to work, continue RRSP contributions

Retire with $105,825

  • No critical illness insurance
  • Critical illness (cancer or heart attack)
  • Withdraw $166,667 from RRSP
  • Taxes are $66,667
  • Return to work, continue RRSP contributions
The above example is for illustrative purposes only. Situations may vary according to specific circumstances. Based on the example above, if you suffer a critical illness, aren’t protected and dip into your RRSP to cover expenses and replace income, when you recover, you’ll retire with only $105,825. But if you become ill* and are protected by critical illness insurance, you could still retire with $314,152.
  These scenarios do not take into account the tax savings at time of RRSP contribution.

**Case assumptions: Male, 38, non-smoker, standard risk earning $120,000 per year with $50,000 invested in an RRSP, making RRSP contributions of $500 per month, plans on retiring at age 65; marginal tax rate of 40 per cent, and interest rate of three per cent. Where critical illness options are indicated, premiums are $147 per month for 27 years, based on a policy that includes a return-of-premium rider (age 60+). Critical illness insurance policy is Oasis level benefit lifetime, paid-up at age 100, with $100,000 benefit.

Source: Great-West Life’s living benefits illustration (version 5.4).

Plan for a safety net

By taking part of your regular RRSP contributions and purchasing critical illness insurance, you’re creating a backup plan that could help protect your retirement but doesn’t restrict your lifestyle. Your retirement is worth protecting. Isn’t having a safety net worth it?

Protect your retirement with critical illness insurance

Help cover unexpected financial expenses that can arise due to a critical illness with Great-West Life critical illness insurance.

What if you never make a claim?

Enjoy the added benefit of setting up your policy so that if you never make a claim, you can get back up to 100 per cent of the money spent on premium. Either way, protecting your retirement pays off.

Talk to me to understand how critical illness insurance fits with your retirement plan.

Support retirement planning with RRSP options and Oasis critical illness insurance from Great-West Life.

At Great-West Life, we take pride in our history of serving the financial security needs of Canadians. For more than a century, we have helped clients develop their financial security plans.

Founded in Winnipeg in 1891, Great-West Life is a leading Canadian insurer. We offer a wide range of investment, retirement savings and income plans, as well as life, disability, critical illness and health insurance for individuals and families.

At Great-West Life, personal service is the key to helping clients find the right solution to their financial security planning needs. We are committed to providing the highest quality service, backed by our history of strength and stability. Great-West Life is a member of the Power Financial Corporation group of companies.

The information provided is based on current tax legislation and interpretations for Canadian residents and is accurate to the best of our knowledge as of the date of publication. Future changes to tax legislation and interpretations may affect this information. The information provided is general in nature and is not intended to be legal or tax advice. You are encouraged to consult with your professional tax and/or legal advisor about your particular circumstances.