Financière SISIP Financial

1. Financière SISIP Financial Washington – March 2019 Suzanne Smith, CFP

2. CF Morale & Welfare Services

3. Vision « Every member of the CAF community and their family has financial health and security!  » Photo: WO Jean-François Néron, CD, MSc

4. SISIP Financial

5. Life Insurance Replacement income, allowing beneficiaries to maintain lifestyle Eliminate/reduce debts Children’s education Final expenses Estate planning

6. Life Insurance How much do you need?

7. Life Insurance 5 Year Group TermInsurance: Optional Group TermInsurance (OGTI) Insurance for ReleasedMembers (IRM) Reserve TermInsurance Plan (RTIP) Permanent Life Insurance: Term 100

8. OGTI/IRM/RTIP No exclusions for war, dangerous occupations, hobbies, volunteeractivities or sports Lessstringentmedicalunderwritingrequirements Free Dependent Life coverage of $10,000 Issued in increments of $10,000 up to a max of $600,000 AccidentalDismembermentbenefits for injuries that are « non-attributable to military service »

9. Term 100 CAF members (serving and former), theirspouses & adultchildren can apply Issued in increments of $25,000 up to a max of $100,000 Level premiums for life Levelcoverage for life Activities/Travel/Deploymentwill not berated or declined if part of duties as an active CAF member

10. Term vs Permanent

11. Critical Illness Insurance CAF members (serving and former), theirspouses & children can apply Up to $300,000 for members and spouses and up to $10,000 for children Critical IllnessInsuranceis a living benefit Pays a lump-sumbenefitdirectly to insuredupondiagnosis of a covered condition Paymentistax-free and can beused in anyway the insuredchooses

13. What am I Covered for?(Dependent Children) 6 CHILD-SPECIFIC CONDITIONS Plus all 25 illnesses and conditions covered for Adults All children covered for one low rate • CongenitalHeartDisease • MuscularDystrophy • Type 1 Diabetes • CerebralPalsy • Down’s Syndrome • CysticFibrosis

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15. Financial Counselling Providingpersonal money management assistance and education Assist withaccess to Support Our TroopsFundloans and grants Referrals to professionals, local community service or othermilitaryresources Assistance in resolvingfinancialdifficulties and improvingquality of life Strict case confidentiality

16. Returning to Canada Allowances have ceased but youstill have a postingloan? Are you able to pay US debtyoumay have acquired? Leaving US rental unit – damage/securitydeposit? Utilities? If buying a house when back in Canada, are youeligiblefor HBP?

17. Financial Counselling Contact SISIP FC beforeChain of Command isbroughtinto the picture Repayforeigndebtprior to departing OUTCAN Contact the local FC in your new posting area to determinecost of living Do not purchase a house in new posting area untilyou have determined the costs are withinyour budget

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19. Pension Possibilities Note: less than 2yrs pensionable service = return of contributions + interest Source: National Defense & the Canadian Armed Forces • Annuities • Immediate • Deferred (payable @ age 60) • Reduced (if taken between 50-60) • Transfer Value • Under age 50 * Contact GCPC to receive your estimate *

20. Immediate Pension (new rules) Note: If you are entitled to an immediate annuity, you cannot opt for any other benefit • You may be eligible to retire earlier with an immediate annuity if you are grandfathered Source: National Defense & the Canadian Armed Forces With at least 2yrs of pensionable service: Age 60; or Age 55 with 30yrs pensionable service; or With 25yrs of CF service; or Medical release with at least 10yrs of service

21. Deferred Pension • Note: only available if you are not eligible for an Immediate Pension Source: National Defense & the Canadian Armed Forces With at least 2yrs of pensionable service: Not entitled to an immediate (unreduced) pension Medically released members with less than 10yrs service Payable at age 60 Depending on age, may opt for reduced pension (age 50-60) or Transfer Value (under age 50)

22. Reduced Pension • Note: only available if you are not eligible for an Immediate Pension Source: National Defense & the Canadian Armed Forces With at least 2yrs of pensionable service: Between the ages 50 and 60 and entitled to a deferred pension Payable the later of your 50th birthday, date of release or date of option Reduction is permanent and applied to your deferred pension

23. Transfer Value • Must be under age 50 AND not eligible to receive an immediate pension • Lump sum payment equal to the value of your future pension • Payable in 2 amounts: Inside & Outside • Inside amount transferred to a Locked-In account, annuity or eligible pension • The investment risk is your responsibility Every situation is unique & a SISIP FP can help you decide which option is right for you Source: National Defense & the Canadian Armed Forces

24. Transfer Value Tax sheltered amount Non tax-sheltered amount (now taxable) * Hypothetical situation, for illustration purposes only Registered pension plan or Locked-In RSP

25. Survivor’s Pension • More than 2 yrs service: • 1% x year of service x your average earnings • Eligible child(ren) – 1/5 of Survivor’s amount up to 4 children; with 5+children 4/5 is divided equally • Eligible child(ren) & no Survivor – 2/5 each to max 8/5 • No survivor and/or children – greater of ROC + interest OR 5x annual accumulated pension • Less than 2 yrs service, greater of: • Return of contributions + interest; OR • One month pay for every year of pensionable service • No survivor and/or children – ROC + interest Source: National Defense & the Canadian Armed Forces

26. Indexing * Indexing is immediate for medically released members, survivors and children Source: National Defense & the Canadian Armed Forces

27. Bridge Benefit • Monthly benefit payable in addition to the lifetime pension • Contribution rate and benefit amounts are coordinated with CPP • Payable from the start of CAF annuity until member reaches age 65, dies or in receipt of CPP disability pension • 2% x pensionable service x avg YMPE x 31.25% * Survivor’s Pension & Children’s Pension are not affected by the Bridge Benefit Source: National Defense & the Canadian Armed Forces

28. CPP/QPP Source: Service Canada • Based on contributions between 18-70 (General drop-out provision and child rearing provision) • YMPE in 2019 $57,400 • Maximum of $13,855/yr* • Average CPP payment is $7,974/yr* • Can apply anytime between age 60 & 70 Service Canada can provide your estimate * assuming payment begins at age 65; October 2018

29. CPP Changes Source: Service Canada CPP will differ if taken before or after age 65

30. Old Age Security (OAS) Source: Service Canada • OAS provides a maximum annualbenefit of $7,217 for Canadiansaged 65 and over in 2019 (Indexedquarterly) • Based on age and residency (18-65/40 years) • Automated enrolment program effective July 2013 • OAS isreduced once net incomereaches $75,910 and fullyeliminated at $123,386 (incomeyear 2018)

31. Normal CPP Election (Age 65) OAS Bridge Benefit CPP $ Total Income $ Total Income Lifetime Pension Lifetime Pension Income to Age 65 Income Age 65+

32. Early CPP Election (Age 60) CPP (reduced) OAS Bridge Benefit Bridge Benefit CPP (reduced) $ Total Income $ Total Income Lifetime Pension Lifetime Pension Lifetime Pension Income to Age 60 Income Age 60 - 65 Income Age 65+

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34. Registered Accounts RRSP Tax deferred Must transfer to RRIF by Dec.31 in year you turn 71 Spousal RSP (SRSP) Tax deduction to contributor Withdrawal taxed in spouse’s hands – 3 year attribution rule! TFSA Contributions are not tax deductible (after-tax income) Growth is tax free Withdrawals not considered income & will not affect income tested benefits/credits Source: Canada Revenue Agency and lifeannuities.com

35. Your Investment Choices Investment options for (S)RSP, TFSA, RRIF, RESP: • Cash, Money Market • Guaranteed Investment Certificates (GICs) • Bonds • Mutual Funds • Stocks • ETF’s * Not a full list of all availableinvestment options

36. Your Investment Portfolio Your portfolio should reflect: • Your investment time horizon • Your investment knowledge and experience • Your goals and objectives • Your risk tolerance

37. Point of maximum financial risk Euphoria Anxiety Thrill Denial Excitement Fear Desperation Optimism Optimism Panic Relief Capitulation Hope Despondency Depression Point of maximum financial opportunity Don’t Let Your Emotions be Your Guide The Cycle of Market Emotions Chart source: Westcore Funds / Denver Investment Advisers LLC, 1998

38. Asset Allocation An investment strategy that aims to balance risk and reward by apportioning a portfolio’s assets according to an individual’s goals, risk tolerance and investment horizon Source: investopedia.com

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41. TFSA Overview • Savings & investment vehicle introduced in 2009 • Available to Canadian residents 18yrs+ (must file tax returns) • As of 2019 total cumulative contribution limit $63,500 • Contributions are not tax deductible and investments grow tax-free while inside the plan Source: Canada Revenue Agency

42. TFSA Tax Benefits • Withdrawals are tax-free and not considered income • Withdrawals do not affect Federal income-tested benefits & credits such as OAS, GIS, Employment Insurance or Canada Child Benefit • Interest, dividends and capital gains earned in a TFSA are not subject to tax Source: Canada Revenue Agency

43. RRSP Overview • Contributions are tax-deductible • Growth in tax-sheltered while in plan • Withdrawals are fully taxable & you will be issued a T4RSP for every dollar withdrawn • You can contribute 18% of earned income up to a max of $26,500 for 2019 (less PA) Source: Canada Revenue Agency

44. RSP Tax Benefits • Contributions lower your taxable income • A Spousal RSP can reduce your combined tax burden • You can use funds in your RSP to buy your first home or pay for your education (HBP & LLP) Source: Canada Revenue Agency

45. TFSA or RRSP?

46. Resources & Links Investor Education by Ontario Securities Commission www.getsmarteraboutmoney.ca Canada Revenue Agency www.cra-arc.gc.ca CAF Know Your Benefits www.forces.gc.ca (CAF Community -> Compensation & Benefits -> Know Your Benefits) sisipci.casisipt100.casupportourtroops.ca

47. Our Partners Provided by London Life Segregated Funds Mutual funds are provided through FundEX Investments Inc. Support Our Troops Fund

48. www.sisip.com 1-800-267-6681

49. Mutual Funds Disclaimer  Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Mutual funds are not covered by the Canada Deposit Insurance Corporation or by any other government deposit insurer. Availability of tax credits is subject to certain conditions and generally subject to recapture if shares are redeemed within eight years. Mutual funds are provided through FundEX Investments Inc.  Financial Advisors providing services with respect to trading in mutual funds and GIC's on behalf of clients are registered as salespersons with FundEX Investments Inc., a duly registered and licensed Mutual Fund dealer. Information Source Disclaimer Most of the information on this Resource Center was obtained from government agency websites and publications. All content is provided for informational purposes only and is subject to change without notice. Although we believe that the source of this information is reliable, we do not warrant or guarantee its accuracy, completeness or timeliness.