A Retirement Income Strategy Guaranteed Income + Growth FOR ADVISOR USE ONLY – No portion of this communication may be reproduced or redistributed.

Canada’s population is aging; a growing number of Canadians are in or nearing retirement:  One in 7 Canadians are senior citizens  36% of the total population is over the age of 50 38% of females are over 50 35% of males are over 50 Source: Statistics Canada, as of July 1, 2013, CANSIM table FOR ADVISOR USE ONLY – No portion of this communication may be reproduced or redistributed. Retirement Facts

Today, more couples are living to age 90! At age 65, the average Canadian is expected to live to age: 89, female 87, male Clients are concerned more than ever about how to financially manage their retirement… FOR ADVISOR USE ONLY – No portion of this communication may be reproduced or redistributed. Source: Canadian Institute of Actuaries Retirement Facts

Pension and Group RRSPs Investments Home and Rental Properties Other Savings Government Programs OAS and CPP Sources of Retirement Income FOR ADVISOR USE ONLY – No portion of this communication may be reproduced or redistributed. Retirement Facts

“The question isn’t at what age I want to retire, it’s at what income” – George Foreman  70% of pre-retirement income is recommended to maintain your standard of living  OAS and CPP pay a maximum (total) of $19,078 per year * * Based on 2014 government rates FOR ADVISOR USE ONLY – No portion of this communication may be reproduced or redistributed. Retirement Facts

The challenge…do your clients want:  To not worry about having enough savings for retirement?  Certainty that you won’t outlive your savings?  Stability of a guaranteed income?  Portfolio diversification?  To turn your registered savings into retirement income?  A simple, worry-free retirement solution? FOR ADVISOR USE ONLY – No portion of this communication may be reproduced or redistributed. Retirement Facts

Payout Annuities:  Designed to convert savings into guaranteed income  The money you’ve saved provides an income for as long as you live  Simple, worry-free and guaranteed solution to retirement income needs Guaranteed Income Solution: Payout Annuity FOR ADVISOR USE ONLY – No portion of this communication may be reproduced or redistributed.

Benefits of a Payout Annuity:  Certainty  Security  Important asset class  Mortality credits  Tax advantages  Guaranteed investment  Retirement paycheque FOR ADVISOR USE ONLY – No portion of this communication may be reproduced or redistributed. Guaranteed Income Solution: Payout Annuity

Life Annuity  Provides a guaranteed income benefit for the life of the annuitant(s)  Guarantee periods range from 5 to 30 years  Only life insurance companies can offer life annuities  Can be based on a single life or joint lives You don’t have to worry about outliving your income FOR ADVISOR USE ONLY – No portion of this communication may be reproduced or redistributed. Guaranteed Income Solution: Payout Annuity

The Payout Annuity Advantage:  An annuity is the only vehicle which can secure a guaranteed income for life  Potential for creditor protection  Probate fees can be avoided with proper beneficiary designation  Efficient source of guaranteed income FOR ADVISOR USE ONLY – No portion of this communication may be reproduced or redistributed. Guaranteed Income Solution: Payout Annuity

Considering GMWB?  GMWBs are recognized within the Canadian marketplace as a solution for clients concerned about depleting their retirement savings, but: Extremely complex to the average consumer Fees can increase quickly Investment options are restricted to fixed income and balanced funds Payout rates have been declining Inefficient source of guaranteed income A Retirement Income Strategy FOR ADVISOR USE ONLY – No portion of this communication may be reproduced or redistributed.

What about a segregated fund or a mutual fund using a Systematic Withdrawal Plan (SWP)?  Money can remain invested in the market and can continue to grow and generate income, but: No guarantees that the money will not run out Sequence of returns risk (withdrawing in down markets) FOR ADVISOR USE ONLY – No portion of this communication may be reproduced or redistributed. A Retirement Income Strategy

Let’s look at three hypothetical scenarios repeating every 5 years given the following assumptions:  $100,000 deposited at age 40  Invested until age 65 with no additional deposits FOR ADVISOR USE ONLY – No portion of this communication may be reproduced or redistributed. Sequence of Returns Risk Explained

FOR ADVISOR USE ONLY – No portion of this communication may be reproduced or redistributed. Sequence of Returns During Pre-Retirement

Let’s look at the same three scenarios in an income phase and how this affects the portfolio value:  $6,000 withdrawn annually at the end of the year  Indexed at 3% FOR ADVISOR USE ONLY – No portion of this communication may be reproduced or redistributed. Sequence of Returns Risk Explained

FOR ADVISOR USE ONLY – No portion of this communication may be reproduced or redistributed. Sequence of Returns During Retirement

What about a life annuity?  Provides security, knowing the investment vehicle offers guaranteed income for life, but drawbacks include: Loss of exposure to equity gains Loss of liquidity Inflation risk FOR ADVISOR USE ONLY – No portion of this communication may be reproduced or redistributed. A Retirement Income Strategy

Let’s bring the equation together to form… ‘A Retirement Income Strategy’ FOR ADVISOR USE ONLY – No portion of this communication may be reproduced or redistributed.

Consider the following combination investment solution: Payout Annuity + Segregated Fund Guaranteed Income + Growth with estate planning features » FOR ADVISOR USE ONLY – No portion of this communication may be reproduced or redistributed. A Retirement Income Strategy

Your clients are looking for a structure that will:  Manage longevity risk  Provide guaranteed, dependable income for life  Offer the potential for growth  Allow them to lock in market gains  Provide the security of guarantees  Offer estate planning features FOR ADVISOR USE ONLY – No portion of this communication may be reproduced or redistributed. A Retirement Income Strategy

Payout Annuity + Segregated Fund Process:  Essential income calculator  Purchase Payout Annuity to meet fixed needs FOR ADVISOR USE ONLY – No portion of this communication may be reproduced or redistributed.

A Retirement Income Strategy Determining Payout Annuity Single Premium:  Calculate retirement income needs  Calculate existing sources of retirement income CPP/OAS Employer pension  The difference is the additional income amount required from the Payout Annuity  Solve for the single premium required to provide FOR ADVISOR USE ONLY – No portion of this communication may be reproduced or redistributed.

A Retirement Income Strategy Payout Annuity + Segregated Fund Process:  Essential income calculator  Purchase Payout Annuity to meet fixed needs  Deposit remainder to Segregated Funds Use remaining funds on a discretionary basis FOR ADVISOR USE ONLY – No portion of this communication may be reproduced or redistributed.

Meet Robert…  Just turned 65  Ready to retire  Joe has a modest company pension  Eligible for CPP/OAS  RRSP assets of $500,000  In good health  2 grown children Robert wants:  some guaranteed lifetime income  to benefit from market growth during retirement  to leave his children some inheritance FOR ADVISOR USE ONLY – No portion of this communication may be reproduced or redistributed. A Retirement Income Strategy

Currently, Robert’s pre-retirement portfolio is: Equities Fixed income Cash & equivalents FOR ADVISOR USE ONLY – No portion of this communication may be reproduced or redistributed. A Retirement Income Strategy

Let’s follow the process for Robert:  Essential income calculator  Purchase Payout Annuity to meet fixed needs  Deposit remainder to Segregated Funds

A Retirement Income Strategy 

A Retirement Income Strategy Benefits of a Payout Annuity + Segregated Fund combo: Life Annuity guarantees income payment for life Segregated Fund investments capture market growth Flexibility within investment allocation of the Segregated Fund at any time Peace of mind through control and guarantees Estate planning benefits from insurance products Increased likelihood of residual estate value FOR ADVISOR USE ONLY – No portion of this communication may be reproduced or redistributed.

A Retirement Income Strategy Benefits to you: Compensation structure: Segregated Fund commission: upfront commission at deposit and trailer paid monthly on the remaining balance Payout Annuity commission: upfront commission paid on initial deposit Opportunity for clients to consolidate assets Increase assets Greater possibility to retain assets at death Increased likelihood of higher trail over time FOR ADVISOR USE ONLY – No portion of this communication may be reproduced or redistributed.

Robert’s optimized retirement income portfolio will look like: Payout Annuity Segregated Funds FOR ADVISOR USE ONLY – No portion of this communication may be reproduced or redistributed. A Retirement Income Strategy

Any statements contained herein that are not based on historical fact are forward-looking statements. Any forward-looking statements represent the portfolio manager’s best judgment as of the present date as to what may occur in the future. However, forward-looking statements are subject to many risks, uncertainties and assumptions, and are based on the portfolio manager’s present opinions and views. For this reason, the actual outcome of the events or results predicted may differ materially from what is expressed. Past performance does not guarantee future performance. Please note that both our Death Benefit Guarantee 100%, and Maturity Benefit Guarantee 75%, are reduced proportionately for all withdrawals or transfers that the client makes. Investors do not purchase units of the funds but, rather, an individual variable insurance contract issued by Equitable Life of Canada. This presentation is intended for informational purposes only and is provided with the understanding that it does not render legal, accounting or other professional advice. Equitable Life has made every effort to ensure the accuracy of this presentation, however, accuracy is not guaranteed. Unless otherwise indicated, ® denotes a trademark of The Equitable Life Insurance Company of Canada. Reproduction or redistribution of this presentation, in whole or in part, without permission from Equitable Life is forbidden. © 2014 The Equitable Life Insurance Company of Canada. All Rights Reserved. FOR ADVISOR USE ONLY – No portion of this communication may be reproduced or redistributed. Legal Notice

Thank you FOR ADVISOR USE ONLY – No portion of this communication may be reproduced or redistributed.