The document discusses six common mistakes that retirees make with their finances, including not understanding risks, having the wrong time horizon, failing to understand stocks and fees, and mistakes with RRIFs. It also discusses longevity increasing and aging populations. Later it discusses risks, long term care, and being prepared for the future. Overall it provides information on financial planning issues for retirees.

1. ““Six Mistakes RetireesSix Mistakes Retirees
Make With TheirMake With Their
Finances”Finances”

2. 22
NAMENAME
COMPANYCOMPANY
ADDRESSADDRESS

3. 33
Six MistakesSix Mistakes
– Not understanding or covering your risksNot understanding or covering your risks
– Wrong time horizonWrong time horizon
– Failure to understand stock marketFailure to understand stock market
– Failure to understand investment feesFailure to understand investment fees
– RRIF owner mistakesRRIF owner mistakes
– Bond funds – should you own them?Bond funds – should you own them?

4. 44
StatisticsStatistics
Canada is trying to get a handle on ourCanada is trying to get a handle on our
aging populationaging population
Today, 4.7 million Canadian’s are over age 65Today, 4.7 million Canadian’s are over age 65
The 80 plus age group will double in 20 years andThe 80 plus age group will double in 20 years and
triple in 40 yearstriple in 40 years

5. 55©2002 NF Communications4
The Rising Tide
Source: U.S. National Center For Health Statistics, National VitSource: U.S. National Center For Health Statistics, National Vitalal
Statistics Report, Vol 47. No. 13, 12/24/98Statistics Report, Vol 47. No. 13, 12/24/98
Life Expectancy
1900-1997
Life
Expectancy
Increasing by
1 month per
Year
35
45
55
65
75
85
1900
1910
1920
1930
1940
1950
1960
1970
1980
1990
A
G
E

6. 66
Risks in Your Chance of Are You
Life Occurrence Insured
House 1 in 240 Yes
Burning
Car Accident 1 in 8 Yes
Medical Yearly? Yes
Problem
Long Term Almost 1 in 2 NO!
Health

7. 77
““Who will take care of me…?”Who will take care of me…?”
Your SpouseYour Spouse
Your ChildrenYour Children
Your Close FriendsYour Close Friends
Your CommunityYour Community
Are they qualified?Are they qualified?
Do they want the job?Do they want the job?
Will the strain of care-givingWill the strain of care-giving
change your relationship?change your relationship?

8. 88
Why LTC Insurance?Why LTC Insurance?
1.1. Burden of health care is shifting to the individualBurden of health care is shifting to the individual
2.2. Long Term Care costs can quickly erode a lifetimeLong Term Care costs can quickly erode a lifetime
of savingsof savings
3.3. Tax-free benefits can save estate from these costsTax-free benefits can save estate from these costs
4.4. Allows you to remain in own home or in a facilityAllows you to remain in own home or in a facility
of your choiceof your choice
5.5. Disengages the governmentDisengages the government

9. 99
Return of PremiumReturn of Premium
Nursing Home Policy 70 Year Old MaleNursing Home Policy 70 Year Old Male
• Policy pays $100/day for 750 daysPolicy pays $100/day for 750 days
• Cost Of Basic CoverageCost Of Basic Coverage $176/month$176/month
• Return of Premium Option $211/monthReturn of Premium Option $211/month
• Money Returned at Death $78,940Money Returned at Death $78,940
• Financial Return on the Return ofFinancial Return on the Return of
Premium Option = 7% per yearPremium Option = 7% per year

10. 1010
AreAre YouYou Prepared?Prepared?
We can all pay theWe can all pay the actualactual
costscosts
tomorroWtomorroW
oror
the premium todaythe premium today

11. 1111
Emotions of the Stock MarketEmotions of the Stock Market

12. 1212
Emotions of the Stock MarketEmotions of the Stock Market

13. 1313
S&P 500S&P 500
ONE YEAR HOLDING PERIODSONE YEAR HOLDING PERIODS
-60
-40
-20
0
20
40
60
80
1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64 67 70 73
S&P500 ONE Year Rolling 1930 to 2005

14. 1414
S&P 500S&P 500
FIVE YEAR HOLDING PERIODSFIVE YEAR HOLDING PERIODS
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64 67 70
S&P500 5-YR Rolling 1935 to 2005

15. 1515
S&P 500S&P 500
TEN YEAR HOLDING PERIODSTEN YEAR HOLDING PERIODS
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64
S&P500 10-YR Rolling from 1940 to 2005

16. 1616
S&P 500S&P 500
FIFTEEN YEAR HOLDING PERIODSFIFTEEN YEAR HOLDING PERIODS
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
1 3 5 7 9 11 13 15 17 19 21 2 2 2 2 31 3 3 3 3 41 4 4 4 4 51 5 55 57 5 61
S&P500 15-YR Rolling from 1945 to 2005

17. 1717
The stocks which make up the Dow 30The stocks which make up the Dow 30
(as of Dec 2006)(as of Dec 2006)
• PfizerPfizer
• VerizonVerizon
• AltriaAltria
• AT&TAT&T
• CitigroupCitigroup
• MerckMerck
• General MotorsGeneral Motors
• DuPontDuPont
• General ElectricGeneral Electric
• JP Morgan ChaseJP Morgan Chase
• Coca-ColaCoca-Cola
• Minnesota Mining & ManufMinnesota Mining & Manuf
• Johnson & JohnsonJohnson & Johnson
• McDonald'sMcDonald's
• Home DepotHome Depot
• HoneywellHoneywell
• AlcoaAlcoa
• IntelIntel
• CaterpillarCaterpillar
• Procter & GambleProcter & Gamble
• United TechnologiesUnited Technologies
• Exxon MobilExxon Mobil
• BoeingBoeing
• Wal-MartWal-Mart
• MicrosoftMicrosoft
• International Business MachinesInternational Business Machines
• American ExpressAmerican Express
• American International GroupAmerican International Group
• DisneyDisney
• Hewlett-PackardHewlett-Packard

18. 1818
Note 1: All total returns are calculated using reinvested dividends.
Note 2: The effects of commissions/loads are not included.
Note 3: All data is believed to be from reliable sources.
Note 4: Past performance is in no way a guarantee of future results.
Note 5: The above listed mutual funds were selected for comparison due to the fact that
they are among the largest U.S. domestic growth equity funds.
Note 6: All Data from the Dogs of the Dow™ website

19. 1919
Compare:Compare:
1 Year 3 Year 5 Year 10 Year 15 Year
Dogs of the
Dow 30.30% 9.90% 9.90% 8.80% 13.30%
Small Dogs
of the
Dow 42.00% 18.00% 13.30% 10.40% 15.90%
Dow Jones
Industrial
Average 19.10% 8.70% 7.90% 9.90% 13.00%
S&P 500 15.80% 10.50% 7.60% 10.00% 12.00%
Fidelity
Magellan 7.20% 7.00% 4.50% 8.50% 10.90%
Vanguard
Index 500 15.60% 10.40% 7.50% 9.90% 11.90%

20. 2020
An Investor’s Worst EnemyAn Investor’s Worst Enemy
Cumulative return Jan. 1, 1984 through March 31, 1996Cumulative return Jan. 1, 1984 through March 31, 1996
A new study concludes that individualA new study concludes that individual
investors are their own worst enemies.investors are their own worst enemies.
A look at cumulative returns showsA look at cumulative returns shows
the Standard & Poor’s 500-stockthe Standard & Poor’s 500-stock
index was up almost 500 percent overindex was up almost 500 percent over
a 12-year period. But the return fora 12-year period. But the return for
equity funds sold either through banksequity funds sold either through banks
or brokers or directly to investors viaor brokers or directly to investors via
telephone was much lower. Thetelephone was much lower. The
reason: Investors were moving in andreason: Investors were moving in and
out of these funds, missing marketout of these funds, missing market
growth periods.growth periods.
491%
113%
97%

21. 2121
Disappointing FundsDisappointing Funds
Example from12/31/95-12/31/96 Money Magazine ArticleExample from12/31/95-12/31/96 Money Magazine Article
The fund columns shows the annualized return reported by the fund. The shareholder
column shows the shareholder average return. The difference results because the
average investor invests once the fund has risen (near the top) and then gets out
when the fund declines. This is not always the case and is merely an example of what
occurred in these funds as reported by Money Magazine during this period. Source:
Money Magazine April 1997. Comparison of fund reported results 12/31/95 to
12/31/96 vs. average investor results (investor results as measured by actual investor
accounts in these funds during this period and then averaged). Hancock Discovery B
is now Hancock large cap growth B

22. 2222
Should You Buy Based onShould You Buy Based on
Last Year’s Performance?Last Year’s Performance?
Mackenzie
Cundill
Value
13% 14% 35% 13% 13% 10%
CI Harbour
Fund
7% -1% 11% 16% 24% 15%
Fidelity
Canadian
Asset
Allocation
-1% -6% 14% 11% 14% 12%

23. 2323
Should You Buy Based onShould You Buy Based on
Last Year’s Performance?Last Year’s Performance?
Funds 200
1
200
2
200
3
200
4
200
5
200
6
Mackenzie
Univers
al
Global
Future
-23% -26% 8% 1% 6% 20%
AGF
Aggressi
ve
Growth
-38% -30% 18% 11% 5% 4%
CI Global
Science
and
Tech
-38% -37% 27% -1% -8% 11%

24. 2424
Avoid “Hot” FundsAvoid “Hot” Funds
Of the Funds that Ranked #1 in performanceOf the Funds that Ranked #1 in performance
rankings over the past 15 years:rankings over the past 15 years:
““Over the subsequent three, five,Over the subsequent three, five,
and 10-year periods, a whopping 80and 10-year periods, a whopping 80
percent of these ‘star’ fundspercent of these ‘star’ funds
performed worse than the averageperformed worse than the average
similar fund.”similar fund.”

25. 2525
Avoid “Hot” FundsAvoid “Hot” Funds
““Since 1987, the least popular funds haveSince 1987, the least popular funds have
outperformed 90% of the most popularoutperformed 90% of the most popular
funds over the following three years”funds over the following three years”
Data from Morningstar Principia ProData from Morningstar Principia Pro
CommentaryCommentary
““Buying Unloved Funds” 2/21/01Buying Unloved Funds” 2/21/01

26. 2626
Even the Experts Struggle:Even the Experts Struggle:
1995 mutual fund selection guide:1995 mutual fund selection guide:
– 81 funds recommended in 199581 funds recommended in 1995
– Look at the returns to June 30, 2004 (10 years later):Look at the returns to June 30, 2004 (10 years later):
• 34 of the funds didn’t exist anymore34 of the funds didn’t exist anymore
• 32 of the funds32 of the funds underunderperformed their benchmarkperformed their benchmark
• 15 outperformed15 outperformed
• BUT less than 20% of selected funds outperformedBUT less than 20% of selected funds outperformed

27. 2727
3
Good thing we didn’t wait!
4
Brilliant! At this price,
let’s buy more!
5
We should hold.
Only the people
who sell lose money!
7
I know this looks really bad ,
But these are only paper losses..
9
Good thing we sold
everything!
10
Told you so.
12
More
crazies
who are
going to
get taken
to the
cleaners!
Life of a fund…
1
Look at the rack record on this
HOT fund
2
The trend is holding.
We should buy!!
6
Once this goes
up, we are selling
out!!
11
I don’t know what
is going on.
Let’s watch it.
13
Let’s buy in
again.
8
Enough! Let’s cut our losses and
move to XX fund that is really HOT NOW.

28. 2828
Investment ExecutiveInvestment Executive

29. 2929
The Secret ViceThe Secret Vice
The Hidden CostsThe Hidden Costs
InIn
Mutual FundsMutual Funds

30. 3030
Management Expense RatiosManagement Expense Ratios
Fund 10 Year Return Expense Ratio
Median Labour Sponsored
Venture Capital
-2.80% 5.50%
CI Global Boomernomics
GIF Class A
-0.50% 5.06%
CI Signature Canadian
Balanced Seg I
5.70% 4.44%
Avg. Global Equity-Seg 1.20% 3.52%
Avg. U.S. Equity-Seg 2.90% 3.30%
Avg. Global Bal & Asset
Alloc-Seg
-1.50% 3.26%

31. 3131
Management Expense Ratios of Index FundsManagement Expense Ratios of Index Funds
Fund 10 Year Return Expense Ratio
Acuity Pooled Canadian
Balanced
13.20% 0.18%
Montrusco Bolton
Enterprise
12.50% 0.13%
Acuity Pooled Fixed
Income
11.00% 0.10%
Acuity Pooled
Conservative Asset Alloc
14.70% 0.10%
Acuity Pooled High Income 15.90% 0.10%

32. 3232
The Hidden CostThe Hidden Cost
INVESTMENT STYLE TYPICAL TRADING COSTINVESTMENT STYLE TYPICAL TRADING COST
Large-Cap ValueLarge-Cap Value 0.65%0.65%
Large-Cap GrowthLarge-Cap Growth 1.59%1.59%
Passive (Index Fund)Passive (Index Fund) 1.38%1.38%
Small-Cap ValueSmall-Cap Value 1.60%1.60%
Small-Cap GrowthSmall-Cap Growth 3.12%3.12%

33. 3333
Trading ExpensesTrading Expenses
Fund TER Cost of Ownership
AGF Dividend Income 2.10% 3.72%
AGF Aggressive Growth 2.56% 4.08%
AGF Aggressive Global
Stock
3.25% 4.70%
Talvest China Plus Fund 3.20% 4.27%

34. 3434
Common Mistakes in Buying FundsCommon Mistakes in Buying Funds
• Buying Hot FundsBuying Hot Funds
• Not Knowing about Fund FeesNot Knowing about Fund Fees
• Paying Excessive TaxesPaying Excessive Taxes
• Failing to Understand Differences in Fund TypesFailing to Understand Differences in Fund Types
and risk profilesand risk profiles
• A Better Way to Select FundsA Better Way to Select Funds

35. 3535
A Study of Investor ExperiencesA Study of Investor Experiences
Dalbar Study from
1984 to 2003 Findings
Avg. Equity
Fund
Investor
Experience
3%
Average
Equity
Fund
10%
S&P 500
Return
12.2%
The mistakes that advisors make:
Fund selection & unnecessary
administration rather than the
allocation of resources around your
objectives.
Not having a roadmap to highlight the
steps to reach your objectives
No system to maintain accountability
of all parties involved: the investment
managers, administrators and advisor.

36. 3636
Common Mistakes in Buying InvestmentsCommon Mistakes in Buying Investments
How to Help AvoidHow to Help Avoid
Buying at the Top of the MarketBuying at the Top of the Market
How to Help Avoid
Selling at the
Bottom of the
Market

37. 3737

38. 3838

39. 3939
Taxes At DeathTaxes At Death
Earned IncomeEarned Income
– Taxation on RRSPs or RRIFsTaxation on RRSPs or RRIFs
included as income on final returnincluded as income on final return
– Capital Gains on rental property, cottage or non-Capital Gains on rental property, cottage or non-
registered investments.registered investments.
ResultResult – Generally in the Highest Tax– Generally in the Highest Tax
BracketBracket
Example:Example:$500,000 RRIF$500,000 RRIF
Tax Liability on RIFTax Liability on RIF
$232,000$232,000

40. 4040
Total Tax Liability on RIF at DeathTotal Tax Liability on RIF at Death
$232,000$232,000
SOLUTIONS?SOLUTIONS?

41. 4141
Pre-Paid Taxes ProgramPre-Paid Taxes Program
Sample based on:Sample based on:
• Male age 66 and Female age 65Male age 66 and Female age 65
• RRIF is $500,000 earning 5%RRIF is $500,000 earning 5%
• RRIF is paying out $2,083 / monthRRIF is paying out $2,083 / month
• Use $356 / month to pay for pre-paidUse $356 / month to pay for pre-paid
taxes program = $232,000taxes program = $232,000

42. 4242
Results of Pre-Paid Taxes ProgramResults of Pre-Paid Taxes Program
If 2If 2ndnd
death occurred 1 yr laterdeath occurred 1 yr later
– Total spent on program $4,272Total spent on program $4,272..
If 2If 2ndnd
death occurred 10 years laterdeath occurred 10 years later
– Total spent on program $42,720Total spent on program $42,720
Total Pre-Paid Taxes $232,000Total Pre-Paid Taxes $232,000
Total RIF Paid to Beneficiaries $500,000Total RIF Paid to Beneficiaries $500,000

43. 4343
Should you Own Bond Funds?Should you Own Bond Funds?
Basket of Bonds:Basket of Bonds:
Gov’t of CanadaGov’t of Canada $50,000 4.9% - 2027$50,000 4.9% - 2027
Gov’t of P.E.I. $50,000 5.6% -Gov’t of P.E.I. $50,000 5.6% -
20112011
Rogers Comm.Rogers Comm. $50,000 6% -$50,000 6% -
20112011
Bond Fund:Bond Fund:
• There is no single maturity dateThere is no single maturity date

44. 4444
Evaluation SheetEvaluation Sheet
Today’s Date:____________________Today’s Date:____________________ Location _____________________________Location _____________________________
What topic did you most enjoy or get value from ?What topic did you most enjoy or get value from ?
______________________________________________________________________________________________________________________________________________________________________________
What is your greatest financial concern?What is your greatest financial concern?
______________________________________________________________________________________________________________________________________________________________________________
AN OPPORTUNITY TO TAKE ACTIONAN OPPORTUNITY TO TAKE ACTION
I want to ensure that I have sufficient assets and make them last. I want to protect the assets I have accumulated.I want to ensure that I have sufficient assets and make them last. I want to protect the assets I have accumulated.
I would like a free consultation at your office to have a personal review:I would like a free consultation at your office to have a personal review:
Select a day:Select a day:
Monday, January 22Monday, January 22 Monday, January 29Monday, January 29
Tuesday, January 23Tuesday, January 23 Tuesday, January 30Tuesday, January 30
Wednesday, January 24Wednesday, January 24 Wednesday, January 31Wednesday, January 31
Friday January 26Friday January 26 Thursday, February 1Thursday, February 1
Circle a time:Circle a time: 1010 1111 22 33 44
PHONE:PHONE: Day ________________________________ Evening ______________________________Day ________________________________ Evening ______________________________
Please Print:Please Print: Your NameYour Name _____________________________________________ age ______________________________________________________ age _________
Your Spouses NameYour Spouses Name ______________________________________ age _______________________________________________ age _________
AddressAddress ____________________________________________________________________________________________________________________________________________________________
City, Province, Postal Code ______________________________________________________________City, Province, Postal Code ______________________________________________________________

45. 4545
People Who Benefit from an AppointmentPeople Who Benefit from an Appointment
 If you are unhappy with your investment performanceIf you are unhappy with your investment performance
– or don’t know what it is– or don’t know what it is
 If you want to explore long term care alternativesIf you want to explore long term care alternatives
 If you own annuities that have dropped in rate or thatIf you own annuities that have dropped in rate or that
you do not plan to useyou do not plan to use
 If you are:If you are:
Single with an estate above $1 millionSingle with an estate above $1 million
Married with an estate above $2 millionMarried with an estate above $2 million
 If you have an RRSP or pension plan over $250,000If you have an RRSP or pension plan over $250,000
and want to reduce taxes on your withdrawalsand want to reduce taxes on your withdrawals