Bill’s Blog | February 23, 2023
Protecting your wealth and future retirement are extremely important in a world that seems to be growing more unstable and turbulent. Therefore having a portion of your wealth in a guaranteed income product makes good sense. However, I have consistently taught clients not to have all their eggs in one basket for years. Real diversification into multiple asset classes and products helps protect your wealth and increases your odds of long-term success. So, let me share with you an idea and a possible solution for part of your retirement planning.
As an insurance broker in BC and my business model, I have many options for my clients. Have you heard about Empire Lifes Class Plus 3.0 guaranteed for-life income product? First, I will share the idea client for this product. Then, I will explain the key features and benefits as to why I like it for protecting a portion of my client’s wealth.
The ideal client for Class Plus 3.0:
- Age 45 plus and have 20 years to a possible planned retirement.
- You are concerned about not losing your retirement savings.
- You would like a portion of your income guaranteed for as long as you live.
Key Benefits and Features:
- There are two stages to this product: Building wealth and income stage. In the first stage, you will receive a guaranteed 4% bonus annually for up to 20 years based on your initial deposit or market value (until you decide to start taking income). Example: You deposit $100,000 in year one, and on December 31, you will have at least $104,000 in your nominal income account. Market value will vary from income account.
- You will receive an automatic reset based on your initial deposit or added deposits every three years up to age 80. Worst-case scenario (no market growth), your 100K is now 112K, a reset occurs, and your new base guaranteed income bonuses will be 4% of the 112K for the next three years. But what about market value? We have three good years in the market: Year one, 8%; year two, 7% and year three, 9%. Your new market value is $125,960.40, and a reset occurs, and now your 4% bonus will be on the higher market value for the next three years or longer, depending on market conditions.
- You can invest with funds up to 80% equity.
- The minimum deposit is 10K—eligible for Cash, RRSP, RRIF and TFSA.
- Being a Segregated contract, you will have a 75% deposit and death benefit guarantee.
- You will receive preferred fee pricing for more significant deposits of 500K or 1M.
- It can provide possible creditor protection for your investment.
- In the event of a death, it can bypass probate as long as a beneficiary designation is in place.
- Income Stage:
- You can start a lifetime withdrawal at age 55 with a 2.85% income of your guaranteed income balance or up to 5.25% at age 80. The longer you delay the income, the greater the guaranteed income % for life. For example, at age 65, you will receive 4%, say 300K saved = $1000 per month for life or at age 70, 4.30% of 300K = $1075 per month for life. (taxes would apply unless this were a TFSA contract).
Please watch this short 4-minute video that clarifies the many benefits of the Empire Life Class Plus 3.0:
If you have any questions, please reach out to me.
PS, I want to invite you to join me as I host one of Canada’s top energy experts Josef Schachter for a webinar on March 18 at 10 AM PST. Join us as Josef shares a webinar on the New Energy Super Cycle, and he will share a few investment ideas. I will send the registration for this 35-minute seminar with Q&A to follow next week. I hope you join us!
All the best in 2023,
Bill Westmacott, Owner
fivefoldfinancial.ca