Whether you’re retiring by choice, you’ve been terminated, or you’ve been laid off… if you’re like most people, you probably don’t think much about your retirement until you’re getting ready to retire. Before that time comes, consider answering the following questions:
- How much do you trust your employer with your retirement funds?
- Is the company you work for in a stable industry and in a strong financial position?
- Do you expect your company to go bankrupt in the next 10, 20 or more than 30 years?
Example: Sears Canadian Pension Fund $267 million shortand retirees, according to court documents their pensions were reduced by 30% after the retailer resigned and left its pension plan underfunded.
When you retire, you may want to consider transferring yours defined benefit Or defined contribution pension away from your employer to a safe financial institution over which your employer has no control.
Few reasons:
- Transferring your pension to a company you no longer trust or that you think may go bankrupt.
- Some employers offer limited opportunities to invest in their pensions. By transferring your pension to a new provider, you may have access to a wider range of investments.
- Some employers outsource the management of their retirement plans to large financial institutions. This can make it difficult to get the information and help you need. Moving to a smaller institution may provide a more personalized service.
When moving a pension out of employer control, we recommend two strategies:
1. imitator pension is a popular choice among workers leaving a defined benefit pension plan. It allows you to receive the same pension your employer promised you, but it is paid by a safe Canadian insurer (such as Sun Life, Canada Life or Desjardins) instead of the company you worked for. The Canadian insurance company you choose will pay you the amount accurate Same pension, Same bridge i Same spousal pension. Plus, sometimes you may qualify for it bonus excess cash. We have seen bonus cash payouts of up to $30,000! Maybe you’ll qualify.
2. Taking cash is the so-called commutated value. You can transfer money from your company retirement plan, so it will happen self-managed by you. Your employer has issued you two checks, one in retirement money and one in cash. Beware of government tax collection, but other than that that is it your money. Use it for retirement, to pay off your mortgage, or to buy a boat or RV. Take a trip. The rest is your wealth.
Before making any moves, always consult a financial advisor to understand the nuances involved.
We will be happy to talk to you about it, schedule a free virtual Zoom call with a Certified Financial Planner.
