Everyone’s Lifetime Homework

for 21st CenturyPrepared by Ken Tsai, CFP RHU MBA

ken.tsai@shaw.ca (778) 558-7277

Retirement is not a human nature …♣The nature was- “live and die by the land”.♣200 years ago, we only expect to live 40 years.♣Since the 19th century’s industrialization, railroad transportation & city developments, we left our lands.♣At the turn of 20th century, life expectancy approaching 60 yrs of age.♣Under industrialization, old people with less productivity were forced to stop working- the very first “forced retirement”.♣Those without lands, can’t do no farming for self-sufficient living …

It became a financial issue to live to old age.

♣After World War II, average life passed 60.♣Today life cycle is prolonged by nutrition

advancement and medical science up to 80s.♣The time after work life now spans 20-40

years, retirement has its own stages.♣… Snowbirds flying, empty-nests longing♣Aged widowhood: chances are one out of a

60yr-old couple, will live pass 90yrs of age.♣A retired-baby-boomer-generation burdened

society till 2050.

Governments will be ever under-delivered…

♣The biological nature and the physical limit of a typical human being is about 70 years of usage life. Yet 3D process never changed:

Degeneration. (100%) Disabled. (functions or fun) Death. (100%)

3D Health Ability Life

♣ At 20, brain and lung passed their primes♣ At 25, your skin starts losing its lustre♣ At 30, muscles tone down, hairs go thin♣ At 35, breast, bones can hold good shape♣ At 40, heart, eyes, teeth having hard time♣ At 50, the water-regulating kidney is tired♣ At 60, your hearing, taste, smell go light♣ At 65, your blade is inpatient to hold urine

♣ Organ dysfunction/failures kick-in♣ Critical Illness & Long-Term Care stand-by

Life is now 80+, where is the extended warranty?

Organs Usage Life Organs Usage Life

Brain 20 Teeth 40Lung 20 Kidney 50Skin 25 Prostate 50Muscle 30 Hearing 55Hair 30 Intestine 55Breast 35 Taste/Smell 60Bones 35 Voice 65Fertility 35 Blade 65Heart 40 Liver 70Eyes 40 2008 UK Study

♣ To enjoy the fruits of a life-long hard work;

♣ To pursue (long-postponed) dreams;

♣ To have quality time with friends, family & your own dear life;

♣ To be healthy for all the above.

♣ To be better-prepared for the ultimate exit.

What are your life’s 6W priorities?

W1: Work - CareerW2: Warmth - FamilyW3: Wealth - Money

W4: Wellness - HealthW5: Wisdom - EducationW6: Wish - Dreams

♣ Below conditions can give a bad spell for retirement, do you have plans making them non-financial events? Wrong investment schemes. Lavish lifestyle. Misfortune strikes. Loved ones’ mistakes.

♣ With Time-Value involved, can you afford to arrange retirement savings late?

♣ Most risk management tools’ costs are based on age, do you think it is wise to pass insurance in young age?

Retirement is a marathon,Are you prepared for the SPORT?

♣The income to sustain longevity.

♣The reserve to deal with the inevitable aging- Healthcare & Medication.

♣The leisure/travel fund for active “Junior Senior” years (below 75).

♣The care arrangements for inactive “Senior-Senior” years. (over 75)

♣Catastrophes immunization.

MONEY, HEALTH, & CONTROL

♣Adequate 20-40yr income streams.

♣Inflation hedge for 20-40yr.

♣Apply time-value compounding.

♣Use cash-flow analysis, budgeting, tax-efficiency planning and (even potential leverage) to set a holistic plan without compromising current living standards.

Plan Early & Take Actions!

♣Safety

♣Plenty

♣Activity

♣Ready

♣Easy Exit

1. RRSP: A quick approach for bigger tax refund2. TFSA: The new flexible Canadian tax shelter3. GLWB: Self-direct lifetime income just like CPP/OAS4. WL/UL: Life insurance asset 2nd to home ownership5. CI: Lump-sum amount to deal with Critical Illness6. DI/LTC: The income cushions for disabilities7. Health/Dental: Smart tax-deductible for self-employed8. Travel Insurance: Save out-of-town high emergency cost 9. RESP: An education fund with government grants10. HELOC: Sweet home ownership and life lines

To Have a Perfect 10!Set a Game Plan & Start Early.

Tool/Solution Check ApplicationRRSP Tax minimization & refund

planning

TFSA Tax shelter and Emergency reserve

GLWB Annuity CPP/OAS Top-UP or Make-UP

WL/UL Asset Permanent insurance for collaterals

Critical Illness Mortgage repayment, Healing fund

Disability/LTC Insure earning power/incapacity

Health/Dental Tax-deductible for self-employed

Travel Insurance Out-of-town emergency protection

RESP Grants & tax-shelter education fund

Home Equity Savings/Investment Reservoir

♣ Safety Foundation:GLWB, Critical Illness, etc.

Plenty Designs:RRSP, TFSA, RESP

Estate

♣ Other than the basic home ownership & life insurance, GLWB & CI are the key setups.

Real

Solution

s

Note !RRSP/TFSA

are tools, not solutions.

Your Trusted AdvisorYour Trusted Advisor

Ken TsaiCertified Financial

PlannerHRB Tax Professional

Registered Health Underwriter

Have a Great Day!