To turn a portion of their retirement savings into a guaranteed source of income that will provide them with at least $10,000 a year. This will help them fill the gap between their government benefits and their anticipated retirement expenses.

Stephen and Liz need to find a solution that:

• guarantees their future retirement income will grow prior to retirement,without risk
• protects their income from market volatility, but still provides potential for income growth, to help them keep pace with inflation
• provides a guaranteed predictable, sustainable income for life

The Strategy

Stephen and Liz transfer $200,000 of their savings to SunWise Elite Plus.

They receive an annual 5% guaranteed income bonus for each year they do not withdraw money from their investment. This means their income for retirement will grow by at least $50,000 by the time they retire. During retirement, SunWise Elite Plus will provide them with a guaranteed income for life equal to 5% of the value of their LWA Threshold Amount on December 31 of the year they turn 65.**

Stephen and Liz have a long-term investment horizon. Since SunWise Elite Plus insulates their income from market risk, they change their asset mix to 90% equities/10% income to take advantage of the greater growth potential of equities. This means they are more likely to benefit from market resets that can increase their income and help them keep pace with inflation.

*All amounts have been rounded. Based on 2008 maximum benefits at age 65, Canada Pension Plan is $10,620 a year or $885 per month, Old Age Security is $6,024 a year or $502 per month.

**Subject to legislated minimums and maximums and certain conditions. Exceeding the 5% withdrawal may have a negative impact on future payments. With the guaranteed income for life or Lifetime Withdrawal Amount, up to 5% of the deposit is available after December 31 of the year the annuitant turns 65. Payments can continue until the death of the annuitant (LWA Annuitant for joint contracts), or termination of the contract. For those who need income before age 65, SunWise Elite Plus guarantees a return of principal in the form of regular withdrawals of up to 5% annually for at least 20 years. Payments end when the Remaining GWB is nil; when the contract is terminated; on the contract maturity date or upon death of the last surviving annuitant.

The result

By age 66, Stephen and Liz will have an annual guaranteed income from their investments of $14,890, which is more than sufficient to meet their expenses. Prior to retirement, they benefited from the 5% annual guaranteed income bonus, as well as a market reset, which increased their guaranteed income for life.

Over the years, Stephen and Liz saw their investments perform well and their retirement income grow. SunWise Elite Plus protected them from longevity and market risk and helped them stay ahead of inflation.

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