Managing For Retirement Income David Gorveatte CFP CPCA

Managing For Retirement Income David Gorveatte CFP CPCA Financial Advisor Certified Financial Planner 318 Main Street Fredericton, New Brunswick E 3 A 1 E 5 Web www. davidgorveatte. com Email info@davidgorveatte. com

TERMINOLOGY If the terms don’t make sense, just ask…! David Gorveatte CFP CPCA 2

What some people think of Financial Planning! You can ask questions as we go through this session or you can save them till the end. Just to let you know, I love questions as I consider them a compliment! Thank you, David Gorveatte CFP CPCA 3

RETIREMENT PLANNING True / False 1. ____ A Registered Retirement Income Fund ( RRIF ) is used to save for your retirement. 2. ____ A Net Worth statement is a picture, expressed in dollars, of how much you are worth and does not include what you owe. 3. ____ RRSP's must be closed and transferred to a RRIF or Annuity by your 71 st Birthday. 4. ____ The best time to take money out of your Registered Retirement Savings Plan (RRSP) is when you are in your lowest tax bracket as opposed to waiting until age 71. 5. ____ A RRIF allows you to draw money until the age of 90 or until the money runs out, whichever comes first. 6. ____ An Annuity will generally pay more per month to a female. 7. ____ Severance pay or Retiring Allowance is taxable when it is received. 8. ____ Mutual Funds are covered by the Government's Canadian Deposit Insurance up to $ 100, 000. 00 in Value. 9. ____ You must have 10% of your RRSPs in a HIGH RISK investment. 10. ____ The purchaser of a Spousal RRSP is also the owner. 11. ____ Once you reach age 65, your income tax rate goes down no matter much income you receive. David Gorveatte CFP CPCA 4

Some useful Web links David Gorveatte Web Site: http: //www. davidgorveatte. com Then use the Calculators for retirement planning. Globe and Mail Web Site for Comparing Mutual Funds: http: //www. globefund. com/ Then use the filter tab to select Fund Companies and Funds. CPP Changes https: //www. canada. ca/en/services/benefits/publicpensions/cpp-enhancement. html CPP Survivor benefit explained: http: //www. advisor. ca/tax-news/shedding-light-on-the-cpp-survivor-benefit-241094 Government of Canada On-line Tools and Calculators: https: //www. canada. ca/en/services/finance/tools. html What is a Financial Advisor: https: //vimeo. com/238093634/586 a 59 b 9 a 2 David Gorveatte CFP CPCA 5

Cont. Education Savings Grant Site: https: //www. canada. ca/en/revenue-agency/services/tax/individuals/topics/registerededucation-savings-plans-resps/canada-education-savings-programs-cesp. html Good Financial Links: http: //www. theglobeandmail. com/ http: //www. fool. com/ Canadian Retirement Income Calculator: https: //srv 111. services. gc. ca/General. Information/Index STOCK MARKET LINKS: Toronto Stock Exchange New York Stock Exchange Dow Jones Exchange http: //www. tsx. com/ http: //www. nyse. com/ http: //www. dowjones. com/ Disclaimer All of these sites were working as of Mar 2, 2018 David Gorveatte and Investia Financial Services Inc. do not make any representation that the information in any linked site is accurate and will not accept any responsibility or liability for any inaccuracies in the information not maintained by them, such as linked sites. Any opinion or advice expressed in a linked site should not be construed as the opinion or advice of David Gorveatte or Investia Financial Services Inc. The information in this communication is subject to change without notice. David Gorveatte CFP CPCA 6

TYPES OF RRSP’S AVAILABLE A. GUARANTEED PRODUCTS - Low Risk - variable rate (Savings Accounts) - fixed rate (GIC’s, Term Deposits) B. MUTUAL FUNDS - Moderate to Higher Risk - ultra conservative, i. e. money market funds - conservative, i. e. mortgage or bond funds - moderate, i. e. preferred stock funds - high, i. e. common stock funds C. SELF-ADMINISTERED - Varying Risk - can contain anything from conservative products like GIC’s all the way up to High Risk speculative investments Source: Canada Revenue Agency David Gorveatte CFP CPCA 7

David Gorveatte CFP CPCA 8

How to allocate your investments Time period for investing 7 plus yrs. Percentage allocation HI _____% _________ 3 to 7 yrs. ______% MED __________________ 1 to 3 yrs. _____% LOW David Gorveatte CFP CPCA 9

RISK 45 scale Hi Med Low 0 5% Down 20% Down 50% Drop Risk is measured as Standard Deviation in our industry and goes from 0 to 45 David Gorveatte CFP CPCA 10

How to look at risk Imagine a 45 foot high ladder straight up in the air and each rung is a foot high. If you fall off the ladder at 5 feet it will hurt your pride, but at 30+ feet it will break bones!!! This is how I explain RISK. David Gorveatte CFP CPCA 11

RRSP Contribution Limits 18% of earned income from the prior year to a maximum of: YEAR Maximum deposit. 2010 2011 2012 2013 2014 2015 2016 2017 $ 22, 000 $ 22, 450 $ 22, 970 $ 23, 820 $ 24, 720 $ 25, 370 $ 26, 010 2018 $26, 230 David Gorveatte CFP CPCA 12

New Brunswick Tax table Combined Federal and Provincial Tax 2018 TAXABLE INCOME (for over age 65, see *NOTE) Lower Upper Interest and Limit Regular Income $ 0. 00 to $ 10 , 043 0. 00% $ 10, 896 to $ 11, 809 9. 86% $ 11, 810 to $ 41, 675 * 24. 68% $ 41, 676 to $ 46, 605 29. 82% $ 46, 606 to $ 83, 351 * 35. 32% $ 83, 352 to $ 93, 208 37. 02% $ 93, 209 to $135, 510 42. 52% $135, 511 to $144, 489 43. 84% $145, 490 to $154, 382 46. 84% $154, 383 to $205, 842 49. 30% $205, 843 and over 53. 30% * Additional clawback taxes for income thresholds over $36, 430 and $75, 910 based on 2018 Tables. See Federal Tax Worksheet for details. Source: CRA David Gorveatte CFP CPCA 13

Tax Consequences of a Withdrawal From a Registered Product Lump sums withdrawn from an RRSP or RRIF: $ 0. 00 to $ 5, 000 $ 5, 001 to $15, 000 $15, 001 and over % Tax Withheld at source: * 10% 20% 30% *These withheld taxes are applied to the total taxes you will be required to pay when you file your return. David Gorveatte CFP CPCA 14

SEVERANCE OR RETIRING ALLOWANCE ROLLOVER INTO RRSP BEFORE 1988 SERVICE $2, 000 for every year of vested RPP service $3, 500 for every other year of service AFTER 1988 SERVICE $2, 000 for every year of service AFTER 1995 SERVICE No further accumulation of years of service Most people have already dealt with this issue. Source: Canada Revenue Agency TD 2 Form "Tax Deduction Waiver in Respect of Funds to be Transferred” David Gorveatte CFP CPCA 15

CONTRIBUTION TO AN R. R. S. P. IN RESPECT OF A RETIRING ALLOWANCE or SEVERANCE PAY Identification: Name: ____________ Address: _________________________ Social Insurance Number: ____ Details Of Contribution For Which Tax Receipts Will Be Issued Enclosed is a cheque(s) for $ ______which is to be deposited as follows: 1. To Personal RRSP # the amount of $______which qualifies under paragraph 60(j. 1) of the Income Tax Act as the eligible portion of a retiring allowance. 2. $________ which was subject to withholding tax at source (unless exempted from withholding by a letter from Canada Revenue Agency). This amount which is not being transferred under paragraph 60 (j. 1) is to be applied as follows: 3. Please Defer $ to Jan. 2/20___ Deposit Information Personal Plan # ________ $__________ Spousal Plan # ________ $__________ From (Name of Employer): _______________ Name or Plan Issuer: _______________ Address of Plan Issuer: _____________ Certification: I certify that the issuer of the receiving plan has advised me that the plan is registered, or that the issuer of the recipient retirement savings plan will apply to register the plan under the Income Tax Act. Date ____/_____ Individual's Signature ______________ I certify that the transfer of the amount stated above will be made directly to the issuer of the receiving plan, and that the amount transferred will be reported on a T 4 A Supplementary, Statement of Pension, Retirement Annuity, and Other Income. Date ____/____ Employers Signature ______________ David Gorveatte CFP CPCA 16

ATTRIBUTION RULES – SPOUSAL RRSP • Bill C-23 – law on December 19, 1986 – change the wording of the Income Tax Act. • This allowed CRA to extend the period of attribution from 2 yrs to 3 yrs. • If you buy a Spousal RRSP you have to make sure that no deposits are made in the last 3 yrs prior to a withdrawal or they will be charged back to the contributor! David Gorveatte CFP CPCA 17

PENSION SPLITTING You can split your pension income up to a Maximum of 50% of your qualified pension amount. This can save you money but you have to be cautious that you split the correct amount, and keep an eye on the medical expenses and tax brackets you are in to get the maximum benefit. We will now look at an actual case that I worked on to illustrate this point. David Gorveatte CFP CPCA 18

PENSION SPLITTING The first slide is what the tax return looked like with NO pension split. Person A made : CPP $ 6, 900. 00 Other $ 34, 632. 00 Total $ 41, 532. 00 Deductions $ 3, 500. 00 Net Income $ 38, 032. 00 Person B made : CPP $ 8, 300. 00 Pension $ 57, 977. 00 Total $ 66, 277. 00 Deductions $ 5, 500. 00 Net Income $ 60, 777. 00 Medical Expenses were $ 6, 000. 00 Deductible Expense for A = $ 6, 000. 00 less 3% of $ 38, 032. 00 = ($ 38, 032. 00 x. 03 = $ 1, 140. 96) so $ 6, 000. 00 - $ 1, 140. 96 = $ 4, 859. 04 Refund Due for A = $ 2, 085. 00 Tax due for B = $ 1, 677. 00 Total = $ 408. 00 Refund! David Gorveatte CFP CPCA 19

PENSION SPLITTING If you take the pension of person B and transfer ½ to Person A, this is what it would look like: $57, 977. 00/2 = $28, 988. 50 ½ of the pension. Person A Made CPP $ 6, 900. 00 Other $ 34, 632. 00 Split Pension +$ 28, 988. 50 Total $ 70, 520. 50 Deductions $ 3, 500. 00 Net Income $ 67, 020. 50 Person B Made CPP $ 8, 300. 00 Pension $ 57, 977. 00 Split Pension -$ 28, 988. 50 Total $ 37, 288. 50 Deductions $ 5, 500. 00 Net Income $ 31, 788. 50 Medical Expenses were $6, 000. 00 Deductible Expense for B = $6, 000. 00 less 3% of $31, 788. 50 = ($31, 788. 50 x. 03 = $ 953. 66) so $6, 000. 00 - $953. 66 = $5, 046. 34 Tax Due for A = $3, 269. 00 Refund for B = $3, 455. 00 Total = $186. 00 Refund! Loss of $ 222. 00 David Gorveatte CFP CPCA 20

PENSION SPLITTING Reallocation of income at optimal pension splitting. Person A CPP $ 6, 900. 00 Other $ 34, 632. 00 Split Pension +$ 2, 460. 00 Total $ 43, 992. 00 Deductions $ 3, 500. 00 Net Income $ 40, 492. 50 Person B CPP $ 8, 300. 00 Pension $ 57, 977. 00 Split Pension -$ 2, 460. 00 Total $ 63, 817. 00 Deductions $ 5, 500. 00 Net Income $ 58, 317. 00 Medical Expenses were $6, 000. 00 Deductible Expense for A = $6, 000. 00 less 3% of $40, 492. 00 = ($40, 492. 00 x. 03 = $ 1, 214. 76) so $6, 000. 00 - $1, 214. 76 = $4, 785. 24 Refund for A = $1, 856. 00 Tax Due for B = $ 808. 00 Total = $1, 048. 00 Refund! Gain of $ 862. 00 David Gorveatte CFP CPCA 21

Tax Free Savings Accounts This product allows you to save money in an investment account that does not attract any tax. The Government has, in my opinion, mislabeled this product; it should be called the TAX FREE INVESTMENT PLAN to reflect the true nature of this product. You can put any investment in this plan that you can put in your RRSP, and like an RRSP, you can name a beneficiary or a successor holder. Some people even suggest that this new product will replace the RRSP as a long term savings plan for investors. Previous contribution room will be tracked and carried forward by Revenue Canada. Tax Free Savings Accounts were set up by the Federal Government to help people save money in a better environment free from tax. The plan was implemented in the 2008 Federal Budget to be effective Jan 1 2009. David Gorveatte CFP CPCA 22

Tax Free Savings Accounts To use this plan you have to set up a separate account with your Financial Institution or Investment Firm to track the contributions and subsequent Deposits or Withdrawals. Once open, the Government will inform you of your unused contribution amount annually, similar to RRSP limits. Common misconceptions: • You have to buy one at a Bank. • You can only have a Savings account type of Investment. • You can only earn interest on the account. • The rates are very low. • Why bother as banks don’t send us interest slips for under $100. • I will get to it when I have lots of money. David Gorveatte CFP CPCA 23

Tax Free Savings Accounts To deposit money into a TFSA you have cumulative predetermined limits set by the Federal Government annually. The current maximum deposit is $ 57, 500. 00 and can be done all at once. Contribution Limits: * 2009 - 2012 = $5, 000/year * 2013 - 2014 = $5, 500/year * 2015 = $10, 000/year * 2016 - 2018 = $5, 500/year For more information, click on the links below. TFSA: http: //www. fcac-acfc. gc. ca/eng/resources/publications/savings/Pages/Thinking -Vouspens. aspx TFSA vs RRSP calculator: http: //www. taxtips. ca/calculators/tfsavsrrspcalculator. htm David Gorveatte CFP CPCA 24

MAXIMIZE YOUR RRSP DEPOSITS: The biggest tip is to maximize your deduction with all the tools available. Know what tax bracket you are in so you can get the best return from the deduction you will be claiming. Also, consider Spousal RRSPs if the conditions warrant. You can use the Tax Deduction at Source link below to get the rebate up front for your RRSP deduction and compound the amount of saving: $ 100. 00 deposited in an RRSP will save about 30% in taxes. So $ 100. 00 + $ 30. 00 = $ 130. 00 @ 30% = $ 39. 00 dollars saved So $ 139. 00 less $ 39. 00 dollars saved in taxes = $ 100. 00 out of pocket. See web link form: Tax deduction at source forms: http: //www. cra-arc. gc. ca/E/pbg/tf/t 1213/README. html David Gorveatte CFP CPCA 25

SOME QUESTIONS YOU SHOULD BE ABLE TO ANSWER BEFORE YOU RETIRE! • Where will the income I need come from? • What cash will be available to supplement my income or meet any financial emergencies? • Do I have enough cash to retire ? • How much tax will I have to pay? • Is my money SAFE? ? ? - In the right place for me? - Safe from excessive taxes? - Safe from excessive losses? David Gorveatte CFP CPCA 26

CREATING YOUR PERSONAL RETIREMENT PORTFOLIO Step 1. What are your retirement resources? Step 2. What are your retirement priorities? Step 3. What is your retirement strategy? David Gorveatte CFP CPCA 27

David Gorveatte CFP CPCA 28

RETIREMENT RESOURCES 1. Pension from Employment 2. Retirement Allowance 3. R. R. S. P. 4. Non Registered Savings 5. TFSA 6. Fixed Assets 7. C. P. P. - (Canada Pension Plan) 8. O. A. S. - (Old Age Security) David Gorveatte CFP CPCA 29

THE ABC's OF MANAGING FOR RETIREMENT INCOME These will give you an understanding of the new options within your reach. A. SETTING YOUR RETIREMENT PORTFOLIO OBJECTIVES. • • • Maintain your income. Keep pace with inflation. Preserve your estate. Control depletion of capital. Plan spending of capital. David Gorveatte CFP CPCA 30

THE ABC's OF MANAGING FOR RETIREMENT INCOME Some peoples ideas of how they plan to retire! David Gorveatte CFP CPCA 31

Some of your investment risk can be offset by starting David Gorveatte CFP CPCA early! 32

THE ABC's OF MANAGING FOR RETIREMENT INCOME These will give you an understanding of the new options within your reach. B. CREATE YOUR PERSONAL RETIREMENT PORTFOLIO. • • Recognize your objectives. Balance your short and long-term needs. Achieve safety through diversification. Maintain portfolio flexibility. David Gorveatte CFP CPCA 33

THE ABC's OF MANAGING FOR RETIREMENT INCOME These will give you an understanding of the new options within your reach. C. REVIEW YOUR RRSP RETIREMENT OPTIONS. • • • Life Annuities. Term Certain Annuities. GMWBs (Guaranteed Minimum Withdrawal Benefit) RRIF - (Registered Retirement Income Funds) Take it out in cash and pay the taxes. ( Not a good option!) David Gorveatte CFP CPCA 34

Taking it all in cash does have its drawback such as Excessive Tax! Hard to sleep on a lumpy bed as well! David Gorveatte CFP CPCA 35

REVIEW YOUR RRSP RETIREMENT OPTIONS When choosing a retirement income strategy that will maximize your resources, you are faced with a wide variety of investment possibilities. Consider the following: David Gorveatte CFP CPCA 36

LIFE ANNUITIES There are four types of Life Annuities: 1. STRAIGHT LIFE Highest rate of return, but payments cease at death. Similar to Old Age Security payments. 2. MINIMUM GUARANTEED TERM - If death occurs before a specified period, for example 10 years, the value of the remaining payments will go to your estate or beneficiaries. 3. JOINT AND LAST SURVIVOR Annuity payments are guaranteed for the lifetime of two individuals, ensuring the security of the surviving partner. Similar to C. P. P. or Q. P. P. payments. 4. INSTALLMENT REFUND Same as straight life, but benefits will continue until all the remaining principal is paid to your beneficiary. These all provide a regular payment over a person's lifetime. David Gorveatte CFP CPCA 37

TERM CERTAIN ANNUITY This is not gender specific and it is simply a product to pay back both your principal and any earned interest on the account from the date of purchase to when the person reaches age 90. Upon death, either your estate will receive the commuted value of the plan, or payments will continue to your beneficiary for the period remaining. Term Certain to age 90 annuities provide the security of long term income with the attraction of higher monthly payments than a life annuity purchase with the same funds. Term certain annuities can be purchased for a term of 10, 15 or 20 years, or to age 90. Term Certain to age 90 Premium $ 50, 000. 00 Age 65 Age 71 $181. 22 $201. 33 $251. 25 Source RBC Financial “Rates Subject to change” David Gorveatte CFP CPCA 38

ANNUITY RATE QUOTATIONS PREMIUM $50, 000 Quote rate as of March 2 nd, 2018 Male Age 60 Age 65 Age 71 LIFE 5 LIFE 10 LIFE 15 $205. 64 $204. 05 $200. 02 $236. 35 $234. 64 $226. 96 $288. 31 $282. 15 $258. 22 Female Age 60 Age 65 Age 71 LIFE 5 LIFE 10 LIFE 15 $191. 55 $190. 43 $188. 03 $217. 19 $216. 77 $210. 58 $258. 28 $254. 68 $239. 48 Age 65 Age 71 $188. 27 $189. 67 $188. 96 $221. 54 $223. 59 $220. 56 Joint & Last Survivor Age 60 J&L 5 J&L 10 J&L 15 $166. 99 $167. 20 $166. 78 Source RBC Financial “Rates Subject to change” David Gorveatte CFP CPCA 39

GMWB “Guaranteed Minimum Withdrawal Benefit” GMWB’s CAN HELP PROVIDE: • Predictable income guaranteed not to decrease, no matter how investments perform • Sustainable income that will last for your life and the life of your spouse • Guaranteed lifetime income available as early as age 55, with higher payout percentages at older ages if income is deferred • Potentially increasing guaranteed income to help keep pace with inflation • Benefits that help ensure the smooth transition of your estate • Potential creditor protection Exceeding the withdrawal thresholds and/or withdrawals taken prior to the Election of LWA (Lifetime Withdrawal Amount) may have a negative impact on future income payments. The LWA becomes available on January 1 st of the year the annuitant or the younger of the annuitant and the Joint Life (if applicable) turns age 55. The Joint Life must be the spouse or common-law partner (as defined by the Income Tax Act (Canada)) of the annuitant. Once named, the Joint Life may not be changed. Other conditions may apply. David Gorveatte CFP CPCA 40

REGISTERED RETIREMENT INCOME FUND This product is simply an investment vehicle which allows you to roll over your maturing RRSP's, up to the end of the calendar year you turn 71. The Government has a pre-determined minimum payment schedule which specifies the least amount you can withdraw each year after age 71. This does not limit you to that amount as you can take any amount in excess of the "minimum“ amount, but a withholding tax, at source, will apply. The major benefit of the RRIF is that it allows any remaining capital in the RRIF to be transferred to your spousal beneficiary’s RRSP or RRIF TAX DEFERED or transferred to your estate and subject to tax. I have found in my practice this is the go to fund for 99% of my customers due to its flexibility. David Gorveatte CFP CPCA 41

RRIF PAYMENT CALCULATOR Based on an initial investment amount of $25, 000, an interest rate of 6. 00% and starting at age 55 the following table will illustrate how the minimum payment is calculated: If you draw the minimum payment required, your first year’s payment is zero and the next years payment would be $779. 10. Thereafter, your payments will depend on your age and the remaining balance in the account. This illustration assumes your payments do not begin until the start of the year following the year of purchase. You can start your RRIF at 71 and take your first years payment at age 72 for maximum deferral. David Gorveatte CFP CPCA 42

RRIF Payment Schedule Age 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 Beginning RRIF Capital $25, 000. 00 $26, 500. 00 $27, 310. 90 $28, 122. 03 $28, 929. 14 $29, 730. 47 $30, 524. 28 $31, 302. 65 $32, 063. 30 $32, 800. 76 $33, 505. 97 $34, 176. 09 $34, 801. 51 $35, 375. 74 $35, 888. 69 $36, 333. 71 $36, 697. 04 $36, 961. 26 RRIF Minimum% 0. 00% 2. 94% 3. 03% 3. 13% 3. 23% 3. 33% 3. 45% 3. 57% 3. 70% 3. 85% 4. 00% 4. 17% 4. 35% 4. 55% 4. 76% 5. 00% 5. 28% 5. 40% David Gorveatte CFP CPCA Annual Payout 0. 00 $ 779. 10 $ 827. 52 $ 880. 22 $ 934. 41 $ 990. 02 $1, 053. 09 $1, 117. 50 $1, 186. 34 $1, 262. 83 $1, 340. 24 $1, 425. 14 $1, 513. 87 $1, 609. 60 $1, 708. 30 $1, 816. 69 $1, 937. 60 $1, 995. 91 43

RRIF Payment Schedule Age 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 Beginning RRIF Capital $37, 183. 03 $37, 357. 79 $37, 481. 07 $37, 548. 54 $37, 552. 29 $37, 488. 45 $37, 353. 49 $37, 136. 84 $36, 832. 32 $36, 434. 53 $35, 931. 74 $35. 317. 30 $34, 582. 70 $33, 714. 68 $32, 706. 61 $31, 545. 52 $30, 217. 46 $28, 709. 61 RRIF Minimum% 5. 53% 5. 67% 5. 82% 5. 99% 6. 17% 6. 36% 6. 58% 6. 82% 7. 08% 7. 38% 7. 71% 8. 08% 8. 51% 8. 99% 9. 55% 10. 21% 10. 99% 11. 92% David Gorveatte CFP CPCA Annual Payout $2, 056. 22 $2, 118. 19 $2, 181. 40 $2, 249. 16 $2, 316. 98 $2, 384. 27 $2, 457. 86 $2, 532. 73 $2, 607. 73 $2, 688. 87 $2, 770. 34 $2, 853. 64 $2, 942. 99 $3, 030. 95 $3, 123. 48 $3, 220. 80 $3, 320. 90 $3, 422. 19 44

RRIF Payment Schedule Age Beginning RRIF Capital 91 92 93 94 95 & over $27, 010. 00 $25, 103. 09 $22, 971. 84 $20, 596. 55 $17, 962. 25 RRIF Minimum% 13. 06% 14. 49% 16. 34% 18. 76% 20. 00% Annual Payout $3, 527. 51 $3, 637. 44 $3, 753. 60 $3. 870. 09 $3, 592. 45 Information and interactive calculators are made available to you as self-help tools for your independent use. We cannot and do not guarantee their accuracy or their applicability to your circumstances. We encourage you to seek personalized advice from qualified professionals regarding all personal financial issues. Updated March 2 nd. 2018 with new rates Calculations were provided by "KJE Computer Solutions, LLC" David Gorveatte CFP CPCA 45

Questions I get asked a lot at these sessions! I would now like to cover some questions I have been asked a lot over the years and give you my thoughts on them. Life insurance: Should I have it and what type to buy? Reverse Mortgage: What is it and how does it work? What can a Financial Planner can do for you? See video link for explanation! https: //vimeo. com/238093634/586 a 59 b 9 a 2 How do you find a good Financial Planner? This is a common question I get asked as most people have travelled here to attend this presentation and want to find a good advisor when they get home. I also get, What do they cost? I always say the right one is PRICELESS! David Gorveatte CFP CPCA 46

Life Insurance can be broken down into 2 categories: If I Die: Die Term Ins. & Group Ins. When I Die: Die Universal Life Ins. & Whole Life Ins. When you buy insurance you are doing it to fill a void in your financial Plan. If you had lots of money, your insurance need would be less than if you were young and had a family that was counting on you to help support them. Its basically to provide the cash you don’t have when you die early. We will now discuss how insurance works and which type will work best in your situation. David Gorveatte CFP CPCA 47

Life Insurance If I Die: Die Term Ins. & Group Ins. If you look at all insurances, they are calculated on the RISK of having to pay out the policy face value or coverage. This means if there is a low chance they will have to pay, then the premiums will be low. Lets look at the math behind this decision made by Actuaries who calculate mortality in the back rooms of Life Ins Companies to get the cost. Chance of Dying Actuarially Mature! X 100% Term Insurance rates keep rising as you get older. 0% _______ _ 30 40 50 60 AGE 70 80 David Gorveatte CFP CPCA 90 100 48

Life Insurance When I Die: Die Universal Life Ins. & Whole Life Ins. This is where you pay the same premium amount for the life of the contract or shorter if you buy a paid up policy. The premiums are higher but there is a cash value attached to that overfunding amount. Chance of Dying Actuarially Mature! X 100% Whole life Premiums ________________________________ 0% 30 40 50 60 AGE 70 80 David Gorveatte CFP CPCA 90 100 49

Reverse Mortgages This is a product that is widely advertised and can be a good fit for someone living in Toronto or Vancouver where house prices keep rising at ridiculous rates. In New Brunswick, the case is not as strong. Here is a breakdown of the cost to set one up. David Gorveatte CFP CPCA 50

Reverse Mortgage It should also be noted that costs and fees for setting this up are very similar to the alternatives out there. For more on this, see this link: https: //www. reversemortgagepros. ca/reverse-mortgage/alternatives-to-areverse-mortgage/ Most people are usually considering a Home Equity Line Of Credit – which comes with almost identical set-up costs (minus the administrative fee – although some lenders do charge set-up fees). Here are some articles comparing this to a HELOC and other factors, like higher interest rates charged on the Reverse Mortgage vs a HELOC or regular Mortgage https: //www. reversemortgagepros. ca/reverse-mortgage -vs-heloc/ https: //www. reversemortgagepros. ca/reverse-mortgage -rates-penalties/#more-2162 David Gorveatte CFP CPCA 51

Reverse Mortgage If the interest cost is greater than the growth value of your home, then you will have a point that the value of your home will be less than the debt against it. These issues are covered in the attached Link: Pros and Cons of a reverse Mortgage: https: //www. reversemortgagepros. ca/reverse-mortgage-canada/cons-of-a -reverse-mortgage/ Please keep in mind, like all things, these are not one size fits all. David Gorveatte CFP CPCA 52

How do you find a good Financial Planner? This is always a good question to ask as not all of us are created equal. There are several types of Advisors and they each come with certain skill sets. I would look for someone who has had some training and education and is backed by credential like a CFP or CLU® as they are very good ones. Also, how does the person get paid is very important so please ask! I want someone who gets paid based on how well I do versus a person who just gets a salary and has no benefit if I make money or penalty if I lose it. Here is one search engine to find a good Financial planner in your area. http: //www. fpsc. ca/find-a-planner-certificant There have been some great articles written and here is one. http: //www. moneysense. ca/save/financial-planning/finding-your-idealfinancial-advisor/ David Gorveatte CFP CPCA 53

THANK YOU! Have a Happy Retirement David Gorveatte CFP CPCA Certified Financial Planner 318 Main Street Fredericton, New Brunswick E 3 A 1 E 5 506 -474 -0010 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. Mutual funds products are offered through Investia Financial Services Inc. Insurance products provided through multiple insurance carriers. David Gorveatte CFP CPCA 54

Does anybody have any questions! David Gorveatte CFP CPCA 55

David Gorveatte CFP CPCA 56

David Gorveatte CFP CPCA 57