ch 13 - Retirement Planning Process

Question 1

retirement planning involves five steps:

Answer 1

1. Determine retirement objectives.
2. Determine the current financial status.
3. Estimate total retirement income sources and needs.
4. Establish an investment plan to meet the retirement needs.
5. Monitor and evaluate the progress to plan.

Question 2

What is Wealth conversion concerned with?

Answer 2

discovery process
goal setting
client education

Question 3

six steps to help your clients prepare mentally for retirement

Answer 3

1. set overall goals and plans to achieve in all areas of their life.
2. Urge clients to discuss their goals and plans with those who will share their retirement.
3. Ask your clients about the things they have always wanted to do and suggest that they plan to make them happen.
4. Encourage them to try new activities
5. treat all problems or crises as opportunities.
6. Help your clients understand how to create a successful and personalized retirement lifestyle that is right
   for them.

Question 4

A retirement plan should address five general areas:

Answer 4

• Family issues
• Health challenges
• Lifestyle goals
• Work options
• Legacy opportunities

Question 5

For many retirees, money has five useful aspects:

Answer 5

Protection, comfort, safety
Independence
Desired lifestyle
Assistance for family members
Legacy

Question 6

3 STRATEGIES FOR LIFELONG INCOME

Answer 6

Life annuity only
Combination of life annuity and investment portfolio
Investment portfolio only

Question 7

To address a potential shortfall in their retirement budget, clients can use one or more of three strategies:

Answer 7

Tax-advantaged investment planning –> Contribute more to Registered accounts
Savings planning –> identify where to reduce expenses
Asset allocation planning –> shift assets to riskier or less risky investments

Question 8

PENSION INCOME TAX CREDIT

Answer 8

Clients who are 65 or older are eligible for a $2,000 pension income tax credit on income from a company pension
plan

Question 9

Provisions spouses SHARE PENSION BENEFITS?

Answer 9

Must come from CPP or QPP
can only share up tp 50%
must be at least 60. both spouses

Question 10

SPLIT PENSION INCOME BETWEEN SPOUSES

Answer 10

Canadian residents who receive income that qualifies for the pension income tax credit can allocate up to 50% of that income to a resident spouse

Question 11

PENSION INCOME over age 65 and under age 65

Answer 11

over:
• RPP payments
• RRSP annuity payments
• RRIF payments

Under:
• RPP payments
• payments received as a result of spouse death

Question 12

TRANSFER MONEY TO COVER INTEREST ON INVESTMENT LOANS

Answer 12

A client could consider giving cash to pay the interest on any investment loans made by the lower-income spouse.
The investment income is then taxed at a lower marginal tax rate.

Question 13

PERSONAL TAX CREDITS that can be transferred to higher earning spouse

Answer 13

• age credit
• disability credit
• pension credit
• tuition credit.