Case studies – Three different strategies

Peter, Colleen and Mary are all turning 60 and retiring.

After seeing their advisors, each decides to convert his or her $100,000 RRSP as follows:

Peter, who has always invested independently in order to have complete control over his investments, decides he also wants to manage his retirement savings. He converts his RRSP into an RRIF and elects to receive regular income for a period of 20 years.

Colleen wants to keep control over a portion of her savings to have a bit of flexibility, and receive guaranteed regular income for life for security. She converts $50,000 of her RRSP into an RRIF and $50,000 into a life annuity with a guarantee period of 15 years. She will receive monthly income of $400 from her RRIF.

Mary wants guaranteed regular income until age 90. She converts her RRSP into a fixed-term annuity.

Here are the results of the three pensioners' choices:

	Peter	Colleen		Mary
Retirement income option	RRIF 20-year period	RRIF Payments of $400/month	Life annuity with 15-year guarantee	Fixed-term annuity
Capital invested	$100,000	$50,000	$50,000	$100,000
Monthly income	$707/month for 20 years, after which RRIF will be depleted.	$400/month for 16 years and one month, after which RRIF will be depleted.	$316/month for life.	$589/month for 30 years, up to her 90th birthday.

To get personalized projections, see a caisse advisor.