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Creating Tax-Efficient and Guaranteed Retirement Income

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... T-Class calculator at http://www.ci.com/t-class/calculator.jsp?lang ... They are not intended to predict or project investment results. ... – PowerPoint PPT presentation

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Title: Creating Tax-Efficient and Guaranteed Retirement Income


1
Creating Tax-Efficient and Guaranteed Retirement
Income
2
Case Study The Story of Richard
  • Situation
  • Challenge
  • Strategy
  • Solutions

3
Situation
  • Richard is 45
  • 150,000 to invest for retirement
  • Commits to another 500 a month for his
    retirement
  • Would like to retire before age 65
  • Needs flexibility, principal protection and
    retirement income of 30,000

4
Challenge
  • Find investments
  • that offer potential growth
  • provide at least 30,000 per year
  • that produce stable tax-efficient income
  • and are flexible
  • Two investment solutions
  • registered and non-registered

5
Strategy
  • Non-Registered
  • Invest 75,000 in
  • CI Corporate Class
  • Contribute 500 a month into CI Corporate Class
  • Registered
  • Invest 75,000 in SunWise Elite Plus

6
Richards strategy
7
CI Corporate Class
  • The ability to switch from one fund to another
    without triggering tax
  • The freedom to make investment decisions that are
    not tax driven
  • The potential minimal taxable dividends, so that
    growth is taxed when exiting the corporation

8
T-Class
  • Built on the tax-efficient CI Corporate Class
  • Provides a steady tax-efficient cash flow
  • Distributions will be return of capital choice
    of 5 or 8 annual withdrawal
  • Flexibility to switch between T-Class and
    Corporate Class without triggering a taxable event

9
T-Class How it works
10
SunWise Elite Plus
  • Provides predictable, stable, guaranteed income
    after the age of 65
  • A guaranteed income bonus of 5 annually for the
    first 15 years
  • Potential market resets every three years
  • Guaranteed income for life

11
SunWise Elite Plus
12
SunWise Elite Plus RRIF for Life
13
Between ages 45-62
  • Invests 75,000 in CI Corporate Class
  • Balanced investor with a 60 equity/40 income
    portfolio
  • Annual return of 7.7
  • Retires at age 62
  • Switches to T-Class

14
Between ages 62-65
  • Switches 450,000 from Corporate Class into
    T-Class
  • Selects 8 payout
  • Provides annual cash flow of 36,000, which is
    return of capital

15
At Age 66
  • Begins receiving government pensions of 16,685
    (CPP and OAS combined)
  • Reduces T-Class withdrawal to 5
  • Cash flow reduced to 22,500 annually

16
At Age 71
  • Turns RRSP to RRIF
  • Selects LWA option
  • Annual guaranteed income is 21,646
  • No longer needs T-Class income, so he switches
    back to Corporate Class

17
Richards retirement income
18
Thank You
Source for all calculations T-Class
calculator at http//www.ci.com/t-class/calculator
.jsp?langENG and the SunWise Elite Plus
illustration tool at http//www.sunwiseeliteplus.c
om/gmwb_calculator.jsp?langENG. Based on the
2008 maximums for Canada Pension Plan of 10,615
and 6,070 for Old Age Security. Subject to
legislated minimums and maximums and certain
conditions. Exceeding the 5 withdrawal may have
a negative impact on future payments. With the
guaranteed income for life or Lifetime Withdrawal
Amount, up to 5 of the deposit is available
after December 31 of the year the annuitant turns
65. Payments can continue until the death of the
annuitant (LWA Annuitant for joint contracts), or
termination of the contract. For those who need
income before age 65, SunWise Elite Plus
guarantees a return of principal in the form of
regular withdrawals of up to 5 annually for at
least 20 years. Payments end when the Remaining
GWB is nil when the contract is terminated on
the contract maturity date or upon death of the
last surviving annuitant. Amount guaranteed for
life. All charts and illustrations in this guide
are for illustrative purposes only. They are not
intended to predict or project investment
results. Commissions, trailing commissions,
management fees and expenses all may be
associated with mutual fund investments. Please
read the prospectus before investing. Mutual
funds are not guaranteed, their values change
frequently and past performance may not be
repeated. Sun Life Assurance Company of Canada, a
member of the Sun Life Financial group of
companies, is the sole issuer of the individual
variable annuity contract providing for
investment in SunWise Elite segregated funds. A
description of the key features of the applicable
individual variable annuity contract is contained
in the Information Folder. SUBJECT TO ANY
APPLICABLE DEATH AND MATURITY GUARANTEES, ANY
AMOUNT THAT IS ALLOCATED TO A SEGREGATED FUND IS
INVESTED AT THE RISK OF THE CONTRACT HOLDER AND
MAY INCREASE OR DECREASE IN VALUE. CI
Investments and the CI Investments design are
registered trademarks of CI Investments Inc.
SunWise is a registered trademark of Sun Life
Assurance Company of Canada.
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