Safe havens for an unsafe time

I am often asked by clients approaching retirement, or living on a fixed income, if there are any safe havens or strategies to keep their retirement assets from eroding or being severely diminished. These are difficult times we find ourselves living in and no matter how secure we feel living in Canada, the impact of US market troubles will extend here. We are in no way immune. Unfortunately, these troubles can really take a toll on seniors who are largely dependent on fixed incomes and company pensions. Many have investments in mutual funds and blue chip financial stocks. Seniors living on fixed income or approaching retirement have options. It is essential to review your investment portfolio and understand what asset classes you hold.

Examine the prospectuses of your mutual funds to evaluate risk and determine whether they measure up to your level of tolerance. This is easiest to do online. There are some very interesting guaranteed income products that are now available in the marketplace such as Manulife’s Income Plus which is designed to offer guaranteed sustainable income at retirement and limit the downside risk of market investing. In addition, annuities offered by insurance companies provide guaranteed income for life. These products offer greater levels of security.

Segregated Funds offered by insurance companies guarantee your invested capital at maturity, which is usually a ten year period, and guarantee your original capital at death. Some plans even allow you to lock in your guaranteed returns up to three times a year, providing higher maturity values. It pays to shop around for GIC rates and bond yields. Make sure you’re comfortable with the companies underwriting these products. Ratings are easily checked online as well. Now more than ever it is essential to review your portfolio. Take stock. Some simple measures can go a long way to ensure that your nest egg is safe and sound.