1. PENSION CHOICESFOR LIFE AND BEYOND

• __________________

Brian Weatherdon, MA, CFP, CLU

[email_address]

1 877 937-3500 x 223

2. How to use this seminar . . .

This seminar used to be a public presentation of 45-60 minutes plus questions & answers.With media clippings and some humour it was rather bulky at 60 megabytes of memory.

Time is precious for you.This personalized format now lets you breeze through or pause, as often as you wish.I hope you find these pages speak on their own.They will welcome your return whenever you need clarification.Also, you can reach me directly.

After you have reviewed these slides, lets find a convenient time to discuss your questions and thoughts about this.Then there are two ways to move forward.( 1 ) I can give you a free report to help support your choice to stay within the typical pension plan.Or ( 2 ) in seminar #2 Ill show how we move forward into a personalized pension plan to secure the freedom and life-choices you want to enjoy.

My role is not to propose one choice over the other.I clarify matters and counsel with you so you can choose the approach best fitting your needs, feelings, family, and lifestyle.

3. WELCOME TO SEMINAR #1 PENSION CHOICES FOR LIFE As you near retirement you have the choice to receive a steady income from a traditional pension plan, or to commute and take a lump sum to create your own personalized pension plan.This is a vital decision one of lifes largest and will greatly shape how your pension resources will support how you choose to enjoy life, as well as the estate you eventually wish to leave for loved ones. In short, this is all about LIFE. Each choice here has risks and opportunities.As you review this seminar I urge you to have an open mind and fully consider both sides.The traditional approach was to draw the pension.More people now are commuting. Getting the results you want depends on how you make the choice, and how the plan is designed to support your financial needs throughout early-, middle, and later retirement.So enjoy this window into the choices before you.I welcome hearing from you:is this seminar helpful? how can we improve it? what further questions come to mind? 4. Most common values people share for Retirement:

To have enough.Avoid running out of money

Provide for future health costs:desire for higher income when needed.

Avoid sacrificing the lifestyle of your dreams;live the life you choose.

Enjoy your home, traveling, active lifestyle wherever & however you choose

Explore how a surplus can further your goals & new opportunities

Enjoy family, consider philanthropy and new ways to learn and share.

Family, community, old and new friendships

Freedom to travel,explore world & cultures

Giving, helping,learning,sharing

Maintaining independence

Preserving an Estate

More:_________

5. Retire and enjoy life on your own terms! Credit to Zoomer Magazine Retirement 6. Avoid having to worry about falling short Credit to Zoomer Magazine 7. Widespread concerns over falling short Advisor.ca 3/3/10

Nanos Research,An overwhelming majority of Canadians polled believe the future of private pension plans is at risk.

69.6% believe private pension plans will have to reduce payments to pensioners in the future.(Others discovering this is true, and isnt new.)

dark cloud on the horizon is their worry public and private pension plans will have to reduce payments to pensioners in the future in order to remain solvent."

Securing the value in existing pension plans, & our personal retirement choices, are the greatest issues aside from healthcare, for our generation.

8. Stories can help unveil our inner feelingsand clarify valuable choices.Which ofthese comes closest to you?

1.GILBERTS CHOICE to draw fixed-income pension

Gilbert considered his pension options.He had always valued guarantees.Investing in his home, GIC and term deposits, he is comfortable knowing his money is safe.

Gilbert has each years pension statements.They show the pension income he expects in retirement (plus some inflation protection).While some pensions have had cut-backs; he knows the pension trustees will do their best to preserve value.

Gilbert waived other opportunities (in next screens) and chose a fixed-income.With savings he and his wife built up over the years, they expect to be secure.Staying with traditional pension plan seems a good fit with this familys needs and comfort.

9. Stories can help unveil our inner feelingsand clarify valuable choices.Which ofthese comes closest to you?

2. MARYS CHOICE for her family estate

Marys biggest concern when she retired was that she might not live long.Women in her family had never lived past 63 years of age.She wanted a way to protect the value of her pension, 100% to her husband and then all remaining value for her family.

If Mary drew the pension in a traditional way, her pension would reduce to 60% for her surviving husband, and offer nothing to their children.

Commuting her pension gave Mary control to draw a higher income in the early years, and leave 100% of that for her husband.When he passes someday, the remaining value will benefit their children and grandchildren.

10. Stories can help unveil our inner feelingsand clarify valuable choices.Which ofthese comes closest to you?

3. JOHNS EXPERIENCE with under-funded pension plan

Johns pension obligated him to stay in the pension plan.Heres his experience.

Before he retired, Johns pension statements showed an expected income near $5100 per month.Two years into retirement he showed me the deposits at $3137 into his bank account.More recently it has fallen to $1961/month.Cutbacks like this occur when pension plans are under-funded, experience poor investment returns, and have ongoing obligations to their retired members.Johns loss has been quite severe.

John and his wife have part-time jobs.They travel less than they wish.They worry about expenses because Johns family lives into their 90s.His fathers health costs already show that John doesnt have enough money to grow old safely.He can consider increasing future resources with long term care insurance but how to pay for it !

11. Stories can help unveil our inner feelingsand clarify valuable choices.Which ofthese comes closest to you?

4. ERICS CHOICE gaining a highly flexible income

Eric retired knowing he would continue a private consulting career for five years or more. Expecting $10,000 a month from consulting, he wanted to delay drawing his pension (thus reduce tax) and let the pension asset keep growing until he really retired.

We found Eric would have four life stages after leaving work.( i ) ongoing consulting for private companies.( ii ) active retirement lifestyle age 70+ in which he can enjoy high spending.( iii ) Some years of lesser spending while still in good health.( iv ) Late senior years when Eric would likely require costly personal assistance.Erics personalized pension plan will adapt to the changing needs of all four periods.

A bonus for Eric, being single, was knowing that if anything should happen to him his pension can be paid directly to his estate or to a Family Trust for his grandchildren.*

*(minus taxes, unless otherwise funded)

12. Stories can help unveil our inner feelingsand clarify valuable choices.Which ofthese comes closest to you?

5. PATS CHOICE having Seed Capital for new business

Pat was eager to retire because her research was preparing her for a new business opportunity.All she needed was Seed Capital for the first few years.Borrowing from a bank would be difficult and expensive.

Pats pension became the Seed Capital she needed.Her commuted pension was split in two, giving her a Life Income Fund starting from 6%/year and a RRIF from which she drew higher amounts supporting her business.As business increased, Pat reduced her LIF & RRIF income to minimum, and lives primarily on salary & dividends.

Pat will sell her company in 3-5 years for much more than the original seed capital.Her financial means, and the joy of her achievement are proud rewards.

13. TEN POINTS OF COMPARISON

Standard Pension :

Trustees obligations

Nature of advice

Safety

Health coverage

Inflation, cost of living, capped?

Under-funding

Value to surviving spouse 60%?

No value to children, estate

Tax strategies

Service

Personal Pension

Eases duty on Trustees

Requires Certified Advisor

Safety

Health coverage

Inflation protection

Investment plan security

Value to spouse 100% or +

Value to children & estate

Tax strategies

Service

14. Pension Trustees viewpoint

Standard Pension :

Some trustees prefer keeping assets in the plan;others see commuting as reducing the plans future liabilities

Longevity riskas retirees live longer

Worsening under-funding as govt regulations inhibit surpluses; rising interest rates cause capital-losses to bonds;payments to retirees inhibit recovery even during good markets

Personal Pension

One pay-out in full

Reduced risks & liabilities

Reduced administration

Reduced future costs

Reduce demographic risks

15. Advisor needed for . . .

Standard Pension :

Advisor can manage other savings (not pension)

Optional certification

Any advisor could . . .

Not integrated w pension

Smaller accounts

Personal Pension

Highly certified qualifications

Listens & communicates well

30 year commitment to plan

Continues service globally

Advice, recommendations, results

Sustains & adapts future income

16. Health insurances. . .

Standard Pension :

May include some health benefits

May require premiums

May exclude dental

May exclude out-of-country

No future guarantees.Extra costs for excluded coverages, and for loss of independence, long term care.

Personal Pension

Choice to insure at competitive cost

Choice to insure through spouse or through eg. retired teachers plan

Option to combine health & dental, plus out-of-country coverage

Can include loss of independence, illness, long term care coverage.

17. Fixed or variable income . . .

Standard Pension :

Fixed income

Retirement seen as a straight line of lifestyle and expenses until death

Results vary greatly due to funding, markets, economy, regulation, and effective caps on surplus

Personal Pension

Life need not be a straight line.

Fixed income if you choose:eg term deposits combined with life annuity and life-income guarantees

Variable and higher incomewhen your needs or dreams require more; less as needs reduce; and more again when health requires.Live and spend as you choose.

At least 3 horizons in retirement

18. Safety . . .

Standard Pension :

This was usually safe with a growing economy, higher interest rates, fewer retirees and a younger population of workers.

May assume 5 to 5% returns. Some pensions manage well. Many will long continue struggling over shortfalls experienced with investment losses from 2000-2008.

Personal Pension

Seminar #2,Pension Platforms, explains in depth how we create ongoing safety for life-income .

Mutual funds alone may not suffice since investments can fall for a year or longer, while income is needed, thus depleting account value.

Combination of funds and guaranteed life-income strategies to perpetuate income

19. Inflation / Cost of Living . . .

Standard Pension :

Many pensions are indexed only to 3% and the retiree loses purchasing power when inflation rises beyond that.

Inflation in health is near 8%;;dental is near 7%;drugs are >12%, andpersonal care costs will keep rising.

Some rare pensions cover inflation even up to 7 or 8%:people would usually stay in that kind of pension if it has funding to keep its promises.

Personal Pension

Historically the strongest protection against inflation has been dividend-paying equities.Pensions whether large or small require inflation-fighting capacity of dividends & equities.

Life Annuities (LA) and ladders (LADs) also allow rising payments, as do Lifetime Income Benefits (LIB).

Seminar #2,Pension Platforms, will show how these in combination support future purchasing power

20. Under-funding . . .

Standard Pension :

Inflation indexing must falter if pension remains under-funded .

Pensions are widely under-funded by 20-40% coast-to-coast.

As under-funding continues, pension incomes are reduced.Cost-of-living is credited only on the lower base.

Personal Pension

The commuted pension is already fully funded.Trustees cannot take it back.

Protect this value with strong allocation and diversification of assets, products, management, & guarantees.

Rising dividend yield, commercial property income, equity growth, and insured guarantees all contribute to your income in retirement.Its your own pension plan you /your family are the only owners.

21. Value for Spouse / Estate at death

Standard Pension :

Choice of reduction to 75%, 60%, or 50% for surviving spouse.When retiree passes on, only the agreed % will continue to surviving spouse.

0% for estate when retiree & spouse have died.Value stays in the pension plan to support members still living.

Personal Pension

Personal pension gets a tax-free spousal rollover of the entire account.

Spouse can continue receiving 100% or even more, for life & health care.

Full value *at the death of surviving spouse goes to estate, or can by-pass probate & go immediately to family or a Trust for family or other philanthropy.

• • • * after tax

22. Philanthropic opportunity . . .

Standard Pension :

As no value remains after death of the retiree and spouse, there is no way to make a final gift of this amount for your charitable desires.

Value remains with the Pension Trust and current / future members.

No tax credit;no tax relief for estate

Personal Pension

Survivor can bequeath value to:

• family / friends

• favourite charities*

• University or specific program*

• Community Foundation*

• Human relief abroad*

• Your choice!*

*Your Estate gets tax relief !

23. Tax Strategies . . .

Standard Pension

$2000 split to lower-income spouse

Up to income-split to spouse while CRA allows

Personal Pension

$2000 split to lower-income .

Up to income-split to spouse

Working:LIF drawspousal RRSP

Meltdown to lower lifetime tax load & clawbacks

Other LIF yearly-meltdown strategies

Insured Estate Maximizer

Philanthropy from Estate ( see slide 36 ) can reduce tax on other family assets.

24. Service standards . . .

Standard Pension :

Call /admin centre

No additional financial or estate services; no counsel on strategies

for future health and estate needs

Advisory fee hidden in plan admin

Personal Pension

Personalized service daily

Integrated withCertified Life and Financial Plan , andEstate Planincluded freely at no further cost .

Advisory fee is transparent and fully available.

25. Can we see an example . . . ? 26. A sample to open discussion. . .

For discussion only, not for DIY.Starting with a full-bodied review of your lifestyle desires,your intended activities in retirement, and personal values, we develop a personalized plan for financial-, tax- and estate-planning.This sample isnot an offer of any financial contract .We also happily review design and key aspects of plan with your accountant & tax advisors.

2000 to 2010 was troubled with meltdowns in technology and resources, also the world financial collapse, plus ongoing war on terrorism.Described as theworst decade since 1929 or 1820all pensions and investment firms struggled.

Yet surprisingly (next screen) a simple portfolio (30% Income and 70% dividend) averaged compound growth 6.9% * .Other decades have done more or less. This and more advanced models prove a vigorous base to sustain lifelong income combined with income guarantees detailed further in Seminar #2.

• *Retail model gave 6.3%.Discounts for Personal Pension Platformsyielded 6.9 %

27. A historically difficult decade yielding 6.9%/year.Combined with insured income guarantees &/or life annuities this can support lifelong security.See Seminar #2 NB:Past returns are no indication of the future. 28. How do you rate each of these in personal importance?Lets discuss together

Will your future hold 3 or more distinct periods:eg. early, mid, later years?

Do you want flexible income for an active and independent lifestyle?

Do you wish to reduce risks:which ones, and how?

How important is a guaranteed income? Starting when?

Should we aim to outpace inflation and reduce taxes/clawbacks?

Is gifting important to you .to protect estate value for family&/orcharity?

Well also talk about privacy and independence (you & your estate).

29. Next step:call me.Well discuss and create a free report to support your pension choice.Then if you like we can offer you the 2 ndseminar: PENSION PLATFORMS FOR LIFE AND BEYOND 30. Choiceisyours. . Were here to help you as a. resource, whatever you decide. 31. News clippings and sourcesavailable on request. . . 32. Appendix #1:Quick slide on Estate Flow. We use both sides of this chart for your benefit. Beneficiaries Home Investments Bank Broker Investments at Life Insurance Co. Life Insurance Probate Fees Legal Fees Exec Fees Time Delay EXTRA 33. Appendix #2:Controlling Assets after death

• Direct beneficiary status

• Family Trusts*

• Insurance Trust*

• Testamentary Trust*

• Hensen Trust*

• Family Asset Transfer

• Estate Freeze

• Two Wills (eg. for Business/other assets)

*There are inexpensive ways to set up

trusts without paying huge trustee fees.

EXTRA 34. Appendix #3:common hazards of joint ownership, including pension values left to heirs

Joint ownership is often set up poorly, yet one can easily learn what is needed from google or a certified advisor.Esp:Four Certainties.

• Four certainties of law for joint trusts

• Fails if not created in same time & place, & contract..

• All owners have equal ownership of the whole property

• Asset at risk from joint tenants creditors

• Asset has in-law risk under Family Law Act

• Other properties:

• Tax risk:taxable disposition on transfer to joint tenancy

• Tax risk:losing full principle residence exemption

EXTRA 35. Appendix #4:glimpse at life insurance and long term care insurance. . .

Many at 60 or 70+have mortgage debt or other reasons to own life insurance & may be paying 2x to 3x too much

We may reduce costs, or find new value for you in existing life policies.

Life insurance may fit your long term estate planning, as a place to hold value tax-free for the next generation or to multiply your philanthropy.

Long Term Care insurance, at $1/month now, can create $5 to $10 /month later for costs of personal care, privacy, dignity in your home or elsewhere.LTCI reduces the impact of health inflation for those who will live long!

• • Caution:is it reimbursement-only or a true income plan?You want to know

EXTRA 36. Appendix #5:consider how philanthropy can reduce taxes that hit your estate EXTRA 37. Ask a Professional

Reach me at your convenience

Brian Weatherdon, MA, CFP, CLU.

[email_address]

1 877 937-3500x 223

Sovereign Wealth Management

We are an advisory firm specializing to protect the resources

you have built ,and ensure your financial capacity to enjoy life

as you choose while also reducing taxes and streamlining

your estate for those dearest to you .

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