SISIP Financial – Financial Matters to Consider when Releasing

As part of the CF Morale & Welfare Services, SISIP Financial understands the realities of the military lifestyle and are the exclusive and trusted provider of financial products and services to Canada’s military community.

Our vision is that “Every member of the Canadian Armed Forces and their families have financial health and security!”

On the agenda today we will be answering the 5 questions that CAF members ask us most often when they release.

Will my family and I be OK financially, post release?
When can I release or retire?
What do I need to do in order to retire comfortably at this time?
What will my income sources look like once I retire or release? And…
What do I do with my SISIP Financial Life insurance?

By guiding them through this important process, we’ve helped hundreds of members across Canada release with peace of mind.

As financial specialists, serving only the military community, we are best positioned to answer these questions and ensure that you are well prepared financially before making this significant decision. 

We can certainly help you answer this question based on your unique financial situation, but there are a few things we need to know to help guide you through this transition. Such as:

What your cash flow requirements will be in retirement?
What your various sources of income will be post release?
What your net income will be from these various sources of income? and finally
How your retirement savings will supplement your various sources of income?

WHEN CAN I RELEASE OR RETIRE? 

In order to help you answer this question we will look at the following:

The goals and plans that members and their families have in retirement
Their present and future cash flow situations, as well as
The optimal time to release, in order to minimize taxes, while taking into consideration the following:

Tax planning in regards to having a second career;
The possibility of Pension Income Splitting;
Cashing-out leave/Severance Pay;
What the best time to redeem a spousal RRSP is; and
The optimal time to redeem individual RRSPs, TFSAs or non registered assets.

The 3rd question we get asked is the following:

WHAT DO I NEED TO DO IN ORDER TO RETIRE COMFORTABLY ?

Ideally, a member would see us before releasing or retiring, so that we can help him set up a plan of action that could include, paying down debt, saving more in order to meet their goal of retirement by their chosen age.

WHAT WILL MY INCOME SOURCES LOOK LIKE WHEN I RETIRE/RELEASE?

- We look at the CAF pension, be it an immediate, deferred annuity or a transfer value.
- We look at government benefits (CPP/QPP or OAS).
- We look at the investments that are held, be they RRSPs, TFSAs or non registered accounts, and we also look at any part-time or full-time employment that a member might be undertaking while released or retired.

One of the key considerations here is that we will be looking at taxation of each income individually, as well as what the member’s tax liability would be overall.

Members also want to know:

WHAT THEIR INCOME SOURCES WILL LOOK LIKE ONCE THEY RETIRE/RELEASE…

In this slide you will find a simple representation of what your income sources could look like:

Release date to age 60:
Your CAF lifetime pension plus the bridge benefit
Your retirement savings and/or second career income

60 to 65 with  receipt of Canada Pension Plan (CPP) at age 60:
Your CAF lifetime pension plus the bridge benefit
Your reduced CPP
Your retirement Savings

65, CCP age 60:
Your CAF lifetime pension
Your reduced CPP
Your Old Age Security (OAS)
Your retirement savings

65+, CCP age 65:
Your CAF lifetime pension
Your unreduced CPP
Your Old Age Security (OAS)
Your retirement savings

You can also wait beyond age 65 to receive your CPP and receive an increased payment. We can help you determine the best time to apply for your CPP/QPP pension. 

It is important to note that all pensions will be indexed at age 60 or earlier, depending on your years of service and age.

The amount of the pension representing the bridge benefit is now available by calling the Pension department at 1-800-267-0325

Information regarding the Canada Pension Plan and the Old Age Security plan are also taken into consideration and play a great part in retirement planning.

When applying for your CPP, you can apply for the regular benefit, as early
as age 59 years + 1 month, for receipt anytime between age 60-70    

Displayed on the screen are the maximum amounts for both monthly and yearly pensions received in 2017, for ages 60, 65 and 70.

Please note that if you are a recipient of a CPP Disability Pension, you must notify the CAF Pension department at 1-800-267-0325, as your bridge benefit would cease.

Old Age Security

The Old Age Security (OAS) pension is a monthly payment, available to most people 65 years of age and older who meet the Canadian legal status and residence requirements.
Your employment history is not a factor in determining eligibility: you can receive the OAS pension even if you have never worked or are still working.

OAS provides a maximum annual benefit of $7,004 for Canadians aged 65 and over in 2017.

OAS is reduced once net income reaches $74,788 (based on previous year income) and fully eliminated at $121,279.

Option to defer until age 70 and receive more (maximum increase of 36%)

IF YOU WILL NOT BE A RECIPIENT OF AN IMMEDIATE PENSION, YOU HAVE  4 CHOICES

1. Deferred annuity (payable at age 60)
2. Annual allowance (not payable until age 50)
3. Transfer Value
4. Transfer of CF Pension Contributions to PSSA or RCMPSA

Let us help you determine what your best choice is and help you navigate through the paperwork.
Because your family’s investment savings are important to you they are also important to us. This is why SISIP Financial follows four core Investment Beliefs that I would like to share with you.  Our Investment beliefs represent the values and guiding principles we abide by in terms of our approach to our members’ investment and lifelong savings...

We believe in active management
We believe in a structured investment approach
We believe in asset allocation and diversification
We are committed to providing unbiased tailored advice.

Look for this poster in all SISIP Financial locations, across Canada, for a detailed look at our 4 investment beliefs, and let us help you make sound investment decisions with your hard earned savings. 

Question five:
WHAT DO I DO WITH MY SISIP FINANCIAL INSURANCE?

Unlike anything currently available on the market, the Insurance for Released Members (IRM) is specifically designed for former members and their spouses. 

Within 60 days of release, members can transfer their OGTI or RTIP policy to IRM with no medical requirements.  If transferred after this date proof of insurability will be required.

Coverage for Insurance for Released members, or IRM, does terminate at age 75.

Key Benefits:

Available in $10,000 increments, to a maximum of $600,000;
Free Dependent Life coverage, up to $10,000;
Free Accidental Dismemberment benefit, non-attributable to military service, up to $250,000;
No exclusions for dangerous occupations, hobbies, volunteer activities or sports; and
Less stringent medical underwriting requirements.

IRM does have a Living Benefit that provides, under specific circumstances, access to an amount not to exceed 50% of the face value of the life insurance in force, to a maximum of $50,000, in the event that death is expected within the next twelve months.

Payment of premiums can be made by Electronic Funds Transfer or Pension deduction.

With most term life insurance plans ending in your 70s or 80s, find out about the Term 100 Life insurance to see if it is right for you.

Term 100 features:

Lifetime protection as long as you pay your premiums (no further premium required after the age of 100);
Premiums are guaranteed and never increase for the duration of the entire policy;
Coverage is available for members, spouse and adult children;
You can choose from four coverage options: $25,000, $50,000, $75,000 and $100,000;
T100 offers a 30 day money-back guarantee.
Underwritten by Manulife

For further details or to download the application, brochure and/or view premiums, visit sisipt100.ca

Critical illness insurance is a living benefit; It pays a lump-sum benefit directly to the insured upon diagnosis of a covered condition. The benefit payment is tax-free, and can be spent in any way the insured chooses.
This insurance protection is particularly relevant to spouses who may not have the same benefits, income support or medical coverage as serving members of the Canadian Armed Forces.  Former members and their spouses may also benefit from this insurance.

An important consideration where insurance and investments are concerned, is to make sure that your beneficiaries are always up to date.

If no beneficiaries are assigned the proceeds are normally payable to the Estate and they may be subject to probate fees, not to mention a lengthy process! 

 SISIP Financial has a team of over 90 financial professionals who know and understand the complexities of our military community.

We are working together to find you the best financial solutions available through SISIP Financial and our various partners.

For the convenience of our members we are located on all major Bases and Wings across Canada.

Let us help you navigate the labyrinth; seek the advice of a SISIP Financial Advisor.