When Your Retirement Plans Go Awry

Clayton Brown


10 Dec 2021


3 min read

Expectations and reality don't always follow the same path. So don't be caught off guard when these common expectations fall flat.

A picture of a man, a woman and a dog walking into the woods.

Remember that one movie you were so excited to come out, but when it did, you felt…a bit disappointed? When we build things up in our minds with such anticipation, it can be sobering when reality comes knocking on our door. The same can happen with retirement: you work hard your entire life and have all these expectations in your mind only to find those expectations falling short.

Expectation: I'm tired of these freezing Canadian winters! I'm going to become a snowbird and spend the winter months down south.

Reality: While retiring to warmer climates is a popular dream among retired – and pre-retired – Canadians, the reality is not many do so. A recent Ipsos survey revealed that only 18% of respondents* confirmed they were snowbirds. This comes as no surprise to Marissa Lennox, Chief Policy Officer for CARP: "The fact is, while it's nice to fantasize about retiring in a little beach town in paradise somewhere or spending the better half of our lives travelling the world, it's just not realistic for most."

Just because you've retired, it doesn't mean your dreams have. The Longevity Pension Fund helps financially empower Canadians to thrive in retirement, including having the means to escape the freezing winters.

A picture of the ocean with two different colours.

Expectation: My savings, the Canadian Pension Plan, and Old Age Security will cover my expenses.

Reality:While Canadian retirees are fortunate to have access to these government-run savings programs, the fact of the matter is they are simply not enough to be the primary source of income for many. The monthly average one can expect from CPP is $619, with payments maxing out at $1,204 in 2021. The current maximum monthly payment for OAS is $626. So, best-case scenario, you're looking at slightly over $1,830 before taxes. Not much wiggle room to take that cruise through the Caribbean.

The Longevity Pension Fund is the world's first income-for-life mutual fund designed for investors who don't know how long they'll live but want to embrace retirement without worrying that they'll run out of money.

Expectation: If I need to supplement my income, or if I’m in good health and looking to fill my days, I can just pick up a part-time job.

Reality: While delaying retirement or working part-time during retirement is excellent if you're healthy and enjoy your job, it means little if you're only servicing debt – which is far too common for many Canadians of retirement age. But you must also consider what type of job you can get, which will likely be physically taxing for much less than you once earned.

It's never too late to plan for retirement – even if you're currently retired! The Longevity Pension Fund combines the lifetime income feature of a defined benefit pension with the flexibility of a mutual fund, offering Canadian retirees the security of lifetime income with the flexibility to change their minds at any time.

*A survey was conducted by Ipsos between April 2 to 8, 2019. For the overall survey, a sample of 2,000 Canadians aged 50+ was interviewed via the Ipsos I-Say panel and non-panel sources. Quotas and weighting were applied to ensure that the sample's composition reflects that of the adult population according to Census data and to provide results intended to approximate the sample universe. For this release, the data referenced is among a sample of 1,800 aged 50+ who are retirees and pre-retirees with investable assets of $100K or more. The credibility of Ipsos online polls is measured using a credibility interval. In this case the results are considered accurate to within ±2.6 percentage points, 19 times out of 20, for the full sample of retired and pre-retired Canadians aged 50+ with investable assets of $100K+.

The Fund has a unique mutual fund structure. Income in the form of Fund distributions is not guaranteed, and the frequency and amount of distributions may increase or decrease. Most mutual funds redeem at their associated Net Asset Value (NAV). In contrast, redemptions in the decumulation class of the Fund (whether voluntary or at death) will occur at the lesser of NAV or the initial investment amount less any distributions received. You can always access the lesser of unpaid capital (initial value of your investment less any income payments made) or your net asset value. Fees may apply. 

Commissions, trailing commissions, management fees and expenses all may be associated with the Longevity Pension Fund. This communication is not investment advice, nor is it tailored to the needs or circumstances of any specific investor. Talk to your investment advisor to determine if the Longevity Pension Fund is suitable for you and always read the prospectus before investing. There can be no assurance that the full amount of your investment in a fund will be returned to you. Investments in the Fund are not guaranteed, investment values in the Fund change frequently and past performance may not be repeated.

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