Some things to consider… PART 1

If you’re planning to retire soon, you have some important choices to make, including decisions on what to do with your pension and/or savings. Understanding your options and asking some important questions now may make a difference to your plans in the years to come.    

Topic #1: What to do with your DC pension account when you retire?

Your CBPP DC pension account is an important source of retirement income. While you are still working, the account is locked-in, making direct withdrawals from the account are not allowed until you retire.  

However, when retirement comes, income conversion, withdrawal and transfer options vary according to provincial or federal regulations. For example, in Alberta, Manitoba, Ontario and New Brunswick, there are unlocking provisions which allow for a one-time cash withdrawal, or transfer to another registered product such as an RRSP.  As there are different regulations for these products be sure to consult with a financial planner to ensure that this choice makes sense.  (I’ll have some tips on navigating these rules in a later post).  

That being said, your locked-in benefits in the DC pension can be converted to income either through:

• guaranteed income options like an annuity;
• flexible income accounts such as a RRIF or LIF; or
• a combination of the two.

There are pros and cons to each of these options and they often depend on how much flexibility you think you may need with your income, and your comfort level with risk.

The CBPP offers support and a seamless transition to retirement

Check the CBBenefits member site > My Retirement & Savings > Thinking about retirement for an overview of options for converting your retirement savings into income and information on our READY TO RETIRE program. 

Find other helpful retirement information

• CBBenefits Webinar: Converting your savings to income
• Financial Post article: https://financialpost.com/personal-finance/retirement/four-key-things-to-consider-if-you-are-planning-to-retire-this-year

 We’d love to hear from you. Contact us at retire@cbbenefits.ca with questions or drop us a line any time at info@cbbenefits.ca.

We continue to look for ways that enable you to get the most out of your
pension contributions, whatever your life stage… because every little bit matters.

Some positive changes are in the works, so be sure to
watch for more information coming this spring.