1. PERSONAL INVESTMENTS HELPING YOUR CLIENTS REACH THEIR GOALS
Session 2 ∙ Determining goals and strategies to reach them

2. SCENARIO/ILLUSTRATION NOT GUARANTEED
Retirement scenarios are estimates that help determine if your clients are on the right track to reach their retirement goals.
Actual results will vary.
The objectives and other variables used in the scenario may change as well.
Periodic reviews of the retirement scenario is highly recommended to avoid any surprises due to changes and actual results.
Before we get started, it’s important to mention that we will be using illustrations in this presentation to show you the functions of savings and retirement calculators.
These illustrations, just as the ones that you will use with your clients, are estimates, not guarantees.
Results will vary with clients goals and financial situation (job status, family status, etc.)
That is why that when it comes to investment clients, it is essential to review the investment plan and investment results periodically. Generally, an annual review is the standard recommendation, but some clients may require more reviews in a year. Ask them how often they want to meet or talk over the phone to review their portfolio.

3. By identifying specific financial goals, there’s a much better chance that clients will commit to invest.
Before we get started, it’s important to mention that we will be using illustrations in this presentation to show you the functions of savings and retirement calculators.
These illustrations, just as the ones that you will use with your clients, are estimates, not guarantees.
Results will vary with clients goals and financial situation (job status, family status, etc.)
That is why that when it comes to investment clients, it is essential to review the investment plan and investment results periodically. Generally, an annual review is the standard recommendation, but some clients may require more reviews in a year. Ask them how often they want to meet or talk over the phone to review their portfolio.

4. WHY ARE YOU INVESTING ?
Vacation ∙ Retirement ∙ Wedding ∙ Car ∙ Dream Home
It’s simple. If someone is going to invest, there has to be a reason why.
Have a discussion with your clients to find out what are their goals and dreams. Note them all and then ask them to prioritize their goals.
There can be many goals: big trip, wedding, renovations or down payment on a house or cottage, retirement, major purchase, and many more…

5. CLARIFY GOALS
Determine how much money is needed to realize the goal.
What’s the desired timeline to achieve the objective?
Use available tools to establish investment strategy.
Manage your clients’ expectations by addressing any gaps that appear when determining required strategy to reach their goal on time.
GOAL SETTING
Because of its tax benefits, TFSAs are preferable to non-registered plans and can be used for many different financial objectives, contrary to an RRSP which is mainly for retirement.
SPECIFIC
MEASURABLE
ATTAINABLE
RELEVANT
TIME-BOUND S M A R T

6. TOOLS TO HELP DETERMINE STRATEGY
SCENARIO
What? – Down payment for property
When? – 5 years
How much? - $20,000
Budget for this goal? - $200 a month
With a simple savings or accumulation calculator, you can first determine if:
1. the goal is attainable given the client’s budget and timeline;
2. if it’s not attainable, what changes are required to attain the goal.
Let’s look at a scenario for a specific medium term financial goal.
Anytime you talk about a client’s goal, ask them how much they are willing to commit to achieve the goal. This will help you determine whether their goal is realistic and prevent client shock from the results of the illustration you will run for the investment strategy to reach the goal.

7. There are many options when it comes to a calculator that will help you project whether a goal is attainable or not. The majority of financial institutions (banks and insurance companies) have calculators available free for this purpose. Alternatively, you may also use a financial planning software. For more simple scenarios, a handheld financial calculator can do the trick.
Bottom line, use a tool you understand and are comfortable with.
In this presentation, for illustration purposes, we will show you the calculators available on the Assumption Life website.

8. Go through information entered in calculator and the results it generates.

9. TOOLS TO HELP DETERMINE STRATEGY
Enter information related to the investment objective:
Go through information entered in calculator and the results it generates.

10. Provide the options for adjusting the savings strategy:
Go through information entered in calculator and the results it generates.

11. RETIREMENT: THE GOAL ON EVERYONE’S MIND
Clients can have many financial goals and those goals will be different from one person to the next.
One goal that most everyone has, is retirement.
However, the definition of retirement is different for everyone.

12. RETIREMENT AS A FINANCIAL GOAL
NECESSARY INFORMATION:
When will retirement start?
How do you see yourself living during retirement? What will the expenses be?
What are the sources of retirement income that will be available?
Government pensions
Employer pension
Personal savings
Severance pay / Retirement allowance
Sale of asset / Downsizing
How long will retirement last?
When it comes to the Retirement goal, there are more elements to take into consideration in order to determine how much personal investments must be made.
Before getting into the numbers, take time to ask your client when they would like to retire and how do they see themselves living during retirement and for how long. By taking interest in their goals, it will help establish a trusting relationship. Also, you need to know the lifestyle they want to have in order to determine the expenses they will incur in retirement. The retirement budget (annual expenses) will be the financial goal to attain.
Once you’ve established with your clients their retirement goals, it’s then time to find out what sources of income will be available to get them there. (see slide)

13. RETIREMENT AS A FINANCIAL GOAL
Before determining a personal investment strategy for your client’s retirement, it’s important to take into account the various sources of retirement income your client will have.

14. SOURCES OF RETIREMENT INCOME
GOVERNMENT PENSIONS (CPP / OAS)
EMPLOYER PENSION
PERSONAL SAVINGS

15. CANADA PENSION PLAN – RETIREMENT BENEFIT
SOURCES OF RETIREMENT INCOME
CANADA PENSION PLAN – RETIREMENT BENEFIT
Maximum benefit for 2017
$ per month (taxable)
Average benefit
$ per month (taxable)
Normal retirement age 65
Minimum retirement age 60
Maximum retirement age 70
Benefit based on:
How long and the amounts contributed by taxpayer to CPP since age 18.
Basic information on CPP.
To get a more precise estimation, client can call

16. Old Age Security Pension
SOURCES OF RETIREMENT INCOME
Old Age Security Pension
Maximum benefit 2017
$ per month (taxable)
Minimum age
65(67)
Benefit based on:
Number of years recipient has been a resident of Canada between age 18 and 65.
Basic information on OAS benefit.
Since July 2013, an individual can defer receiving his OAS pension for up to 60 months after becoming eligible to receive the OAS pension (age 65). By deferring, the monthly pension amount will be higher (increase of 0.6% for each month deferred).

17. SOURCES OF RETIREMENT INCOME
GOVERNMENT PENSIONS (CPP / OAS)
EMPLOYER PENSION
PERSONAL SAVINGS

18. SOURCES OF RETIREMENT INCOME
Employer Pension Plan
DEFINED BENEFIT PLAN
DEFINED CONTRIBUTION PLAN
Retirement benefit is based on the number of years in the plan and the employee’s salary.
Retirement benefit is based on the amount accumulated in the employee’s pension account.
Consult your client’s pension statement and/or employee benefit guide for details on the DB pension plan.
Consult your client’s pension statement for the current value of your client’s DC pension plan.
There are two types of group pension plans: Defined Benefit (DB) and Defined Contribution (DC). In both cases, to properly plan your clients’ retirement, you will want to consult the employee statements.
DC plan statements look very much like an RRSP. The clients usually have the freedom to choose which funds they invest in, contributions are tax deductible and investment income is tax sheltered. The main difference is that the money in the DC plan is locked-in.

19. SOURCES OF RETIREMENT INCOME
GOVERNMENT PENSIONS (CPP / OAS)
EMPLOYER PENSION
PERSONAL SAVINGS

20. IMPORTANCE OF PERSONAL SAVINGS IN RETIREMENT PLAN
Depends on the amounts of retirement income from other sources, mainly pension plans.
People without pension plans will generally need to contribute more to there personal investment plans (RRSP, TFSA, etc.) to reach their retirement goals.
Self-employed
Professionals (i.e. doctors, lawyers, accountants, dentists, etc.)
People with generous pension plans may still need to contribute to their personal plans, especially if their retirement objective is high.
Retiring at a young age.
High annual income required.

21. PREPARE A RETIREMENT SCENARIO
Many retirement calculators available on the internet
Financial Institutions such as banks and insurance companies
Service Canada website ( )
Education websites (i.e. GetSmarterAboutMoney.ca)
Your choice of financial planning software
Typically, you will have more flexibility with a financial planning software to create more complex retirement scenarios and include two people in the same scenario (couples).

22. There are different types of calculators
There are different types of calculators. Here, the first one (CLICK) takes into consideration only the personal savings.
The second one is more complete, taking into consideration CPP, OAS and if applicable, employer pension plan.
Let’s look at the Retirement Planner.

23. BASIC RETIREMENT SCENARIO
Client is currently 45, would like to retire at 65.
Current salary = $70,000
CPP benefit estimated at $ monthly in today’s dollars, starting at age 65.
OAS benefit estimated at $ monthly in today’s dollars.
Employer defined benefit pension estimated at $3,500 per month. According to employee guide, this benefit is not indexed to inflation.
Client expects to contribute $300 per month in his RRSP, which is currently worth $35,000.
Goal = 70% of current income, indexed to inflation.

27. OPTIONS TO REACH RETIREMENT OBJECTIVE
SAVE MORE
TAKE LESS
EARN MORE
WAIT S T E W
Because of its tax benefits, TFSAs are preferable to non-registered plans and can be used for many different financial objectives, contrary to an RRSP which is mainly for retirement.

28. DETERMINE GOALS, ESTABLISH PLAN
When clients have specific goals they want to achieve, and see what they need to do to reach those goals, there’s a much better chance they will commit to the investment plan you will recommend.

29. ? ?
QUESTIONS ?