Your Financial Goals
Saving for Retirement
 “How much is enough?” is likely to be a question near the top of your list when considering retirement savings. There are numerous calculators available to estimate retirement income needs.
The options for retirement savings are similar to the investment tools for shorter term goals such as home ownership and education funding, but they may be used in more tailored ways based on your needs at this particular stage in life.
Our members, due to their superannuation, frequently find their retirement income needs are readily met. A Tradex advisor can provide a detailed, no obligation forecast which can also be useful in developing your optimal investment plan and asset allocation.
A mutual fund is a collection of stocks and/or bonds. The fund is similar to a company that unites the investment funds of many individual contributors and invests their money in stocks, bonds and other securities. Each individual investor owns shares that represent a fraction of the total holdings of the fund. The majority of the income earned by the fund is distributed over the year to the fund’s shareholders. This income is generated by the holdings of the funds as their stocks and bonds provide dividends and interest. Usually the capital gain produced by sales of the fund’s securities is passed on to the investors as well. In some cases individuals can profit by selling their shares in the event that the fund holdings have increased in price and the fund manager has not sold the assets already. In this last case the investor loses any stake in further increase that the fund benefits from as they have sold their shares.
By investing in mutual funds you get the huge benefit of professional management of your money. You also benefit from mutual funds through diversification. You are investing in shares of a pool of many assets and, in theory, losses on a few of the assets in the pool are less likely to affect the value of your shares than if you had owned stocks directly in a failing asset.
For more information on the availability of mutual fund products through Tradex, please see the mutual fund options listed under
Products on the main page or contact a Tradex advisor for a personal explanation of the available options, with no obligations.
Retail venture capital offers an opportunity to reduce taxes further than RRSP contributions alone. The following
chart provides some general information on how this option can provide benefits through favourable taxation.
As your retirement savings grow, and retirement nears, protection of capital may become of greater concern. There are various investment options to add additional protection, at a cost, while still enjoying market returns.
Tradex offers Segregated Fund options that are professionally managed pooled funds similar to mutual funds. Segregated funds have the additional benefit of some principal security. The
Segregated Fund typically provides a principal guarantee upon maturity or death. The amount of the principal guarantee may vary between plans.
Guaranteed Minimum Withdrawal Plans are similar to annuities, but they allow room for some growth while protecting the investor against risk. Tradex can custom tailor this type of plan to meet your specific needs.
Tradex also distributes a limited number of Principal Protected Notes (PPNs). PPNs are offered by a number of institutions and come in a great variety of “shapes and sizes”. In general, Tradex distributes only those PPNs offered by major financial institutions, including:
- Bank of Montreal
- CIBC
- Royal Bank of Canada
A Principal Protected Note, or PPN, is an investment product that consists of two parts. One part is an investment that promises
a return of the original amount you invest in the PPN, usually after a six to ten year period. A third party, called the guarantor, guarantees the amount you will receive. The second part of the PPN is a market-based investment, usually linked to a market index, a fund, or another investment product that offers the potential – but not a guarantee – of a profit on your investment. The attraction of PPNs is that investors can have the principal amount of their investment guaranteed and still have the prospect of earning a rate of return above what might be provided by a GIC or other investment providing a fixed return.
As the terms and conditions of each issue of PPN vary significantly, it is important to review in detail the actual terms of an offering before investing. Our Senior Advisors are well versed in this area and are able to assist steering clients towards appropriate options.
For more information about PPNs (including the potential downsides of investing in them as well as the advantages) click here to read a summary on PPNs produced by the Canadian provincial securities commissions (CSA).
Annuities are a way to ensure income after retirement or when an income stream needs to be guaranteed. Tradex has access to a range of annuity plans that can be customized to your needs and provide regular guaranteed payments after retirement or to help fund on-going expenses. The premium is a lump sum premium based on the duration and payment amount of the annuity required. |
