Getting ready for retirement.

RETIREMENT PLANNING

Getting ready for retirement. “Before anything else, preparation is the key to success.” — A lexand er Graham Be ll

R E T I R E M E N T is one of those lifechanging events that we all know is coming, but can sometimes catch us less prepared than we may have anticipated. Many retirees are understandably concerned whether or not they will have enough money to last through their golden years.

Adequate planning can help alleviate those common financial concerns and help you enjoy the retirement you’ve been working hard for. Here are seven tips to get started: 1. LIVE LONG AND PROSPER Canadians are living longer than ever, and retirement can last 20 to 30 years, or even more. Discussing your plans with loved ones and developing a plan regarding later life care and support can help avoid future uncertainty. 2. GET YOUR FINANCIAL HOUSE IN ORDER Determine what your annual income will be (from savings, investments, property income, government retirement benefits and employer pensions) and how they will be depleted over your retirement years. A cash flow/retirement income analysis performed by your Scotiabank Investment Specialist can give you a clear indication of what your cash flow will look like and you can adjust your lifestyle or income strategy if necessary. 3. WORK OUT YOUR PENSION INCOME If you will be receiving income from a company pension, determine when you will begin collecting your benefits and the amount you are entitled to receive. Confirm how much you can expect to receive through the Canada Pension Plan (CPP)/Quebec Pension Plan (QPP) and Old Age Security (OAS). You can then make

a more informed decision on when to begin collecting your government pension, as it may be beneficial for you to defer receiving CPP/QPP or OAS to increase your payments. 4. SPLIT WITH YOUR SPOUSE If one spouse has a lower marginal tax rate, splitting eligible pension income could potentially lower the overall household tax bill and could reduce “clawbacks” of both OAS benefits and the “Age Amount” tax credit for the higher-income spouse. Also, if you will earn more income than your spouse and have available Registered Retirement Savings Plan (RRSP) contribution room while your spouse is 71 years of age or younger, you may be able to make a spousal contribution to their RRSP. This would generate a tax deduction for the contributor and the RRSP withdrawals will be taxed at the lower income spouse’s marginal tax rate. 5. KEEP UP THOSE RRSP CONTRIBUTIONS, IF YOU CAN An RRSP must be converted to a Registered Retirement Income Fund (RRIF), annuity, or paid out to you by the end of the year that you turn 71. If you are still earning income in the year that you turn 71, consider contributing to your RRSP.

6. CONVERT WISELY Your RRSP must be converted to a RRIF, annuity, or paid out to you by the end of the year that you turn 71. In some cases, consolidating your accounts into one RRIF could help you minimize administration fees. Minimum RRIF withdrawals increase each year based on age; but it is possible to calculate your minimum withdrawal using your spouse’s age. If your spouse is younger than you, this could result in lower minimum RRIF withdrawals. 7. DON’T FORGET ABOUT TSFAs The money you deposit into a TFSA comes from after-tax income, which means it isn’t considered taxable income when withdrawn. Federal income-tested benefits and income tax credits (such as the GST credit, OAS, and the Guaranteed Income Supplement) are not affected by TFSA withdrawals. Planning effectively means you can enjoy your retirement with greater peace of mind, doing all of the things that will be most important to you.While planning takes time and forethought, the good news is you are not alone – a Scotiabank Investment Specialist can help you explore your available options and create a plan that works for you.

D i d y ou kn ow ? It’s helpful to plan for the three stages of retirement and determine what your expenses might be in each: Early stage: Spending tends to be higher as more time is spent travelling and doing those things that were put off while working

Middle stage: More time is typically spent with friends and family, as routines are established

Later stage: Greater focus is spent thinking about estate planning, and health care may become a greater priority

® Registered trademark of The Bank of Nova Scotia, used under licence. Scotiabank includes The Bank of Nova Scotia and its subsidiaries and affiliates, including Scotia Securities Inc. “Scotiabank Investment Specialist” refers to a Scotia Securities Inc. mutual fund representative or, in Quebec, a Group Savings Plan Dealer Representative. Scotia Securities Inc. is a member of the Mutual Fund Dealers Association. This document has been prepared by 1832 Asset Management L.P and is provided for information purposes only. Views expressed regarding a particular investment, economy, industry or market sector should not be considered an indication of trading intent of any of the mutual funds managed by 1832 Asset Management LP. These views are not to be relied upon as investment advice nor should they be considered a recommendation to buy or sell. These views are subject to change at any time based upon markets and other conditions, and we disclaim any responsibility to update such views. Information contained in this document, including information relating to interest rates, market conditions, tax rules, and other investment factors are subject to change without notice and 1832 Asset Management L.P. is not responsible to update this information. To the extent this document contains information or data obtained from third party sources, it is believed to be accurate and reliable as of the date of publication, but 1832 Asset Management L.P. does not guarantee its accuracy or reliability. Nothing in this document is or should be relied upon as a promise or representation as to the future. Investors should consult their own professional advisor for specific investment and/or tax advice tailored to their needs when planning to implement an investment strategy to ensure that individual circumstances are considered properly and action is taken based on the latest available information. ScotiaFunds® is managed by 1832 Asset Management L.P., a limited partnership the general partner of which is wholly owned by The Bank of Nova Scotia. ScotiaFunds is available through Scotia Securities Inc. and from other dealers and advisors. Scotia Securities Inc. is wholly owned by The Bank of Nova Scotia and is a member of the Mutual Fund Dealers Association of Canada. 3230-2017-0501 R2