Asset and Product Allocation

Asset allocation strategies seek to reduce risk, i.e. reduce the uncertainty we have about what the future will bring for our investments. When properly designed and managed, an asset allocation strategy can offer some protection from severe market contractions, helping you from falling short of your target. 

As you transition into retirement, traditional investment rules will change. This is when Product Allocation will become more important, i.e. focusing on the types of products you hold and how these products are working together to provide growth and guaranteed income for life.

How you turn your savings into retirement income is a significant financial decision. Although there are a myriad of product choices available, they can be classified into three groups:

Systematic Withdrawal Plans

Regular withdrawals from investments.

Guaranteed Minimum Withdrawal Benefits

These products provide investors with “pension-like” guarantees. You have guaranteed income for life, all the growth potential of the market, and your income is protected from market downturns as your principal remains untouched..  Guaranteed Income products are an excellent solution for those near to or in retirement who want to protect their retirement income from market downturns.

Annuities

In exchange for a single lump sum deposit, a financial institution makes guaranteed regular income payments that contain both interest and a return of principal. Annuity payments can continue for a chosen period of time or the lifetimes(s) of two people.

Annuities purchased with non-registered funds will generate tax-efficient income as it provides a payment that is composed of interest and capital, but only the interest is taxable. Most annuities meet specific Tax Act requirements and therefore qualify as “prescribed annuities”, which receive favourable tax treatment. And, for those 65 or older, income from an annuity will qualify for the pension income tax credit and for pension income splitting.

Contact us for a free consultation to discuss investment strategies that might be right for you.

Contact us for your free copy of
A Simple Guide to Guaranteed Investing by Jim Yih - Safe Investing for Conservative Investors.