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Investor's Quarterly SUMMER EDITION 2016

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HIGHLIGHTS:

Canadians Retiring Later - We are now retiring later, often much later, than the magical 'Freedom 55'. The iconic slogan was more of a marketing ploy and not rooted in reality for most of us. Few Canadians retire at age 55, but why is that? Demise of the Defined Benefit Pension Plan: Most corporations who still offer pension plans have turned to Defined Contribution Plans to lower costs, while many have eliminated pension plans altogether. Boredom: Some retirees get restless and return to working part-time, sharing their expertise as a consultant or trying a new field. Health Concerns: Additional work years may be necessary to ensure costly future health care expenses can be covered by additional savings if not covered by insurance. Life Expectancy: Increased longevity means retirement funds must last longer than what may have been originally projected. Add to these factors the negative impact that record low interest rates have had on traditional income investments. Professional money management is key. 

Uncertainty After Brexit Vote - On June 23rd, British citizedns cast their votes after a heated campaign to decide whether the UK would leave or remain as a member of the European Union (EU). The leave side narrowly beat the remain side leaving the nation deeply divided. As expected, the referendum generated a great degree of uncertainty amongst investors and short-term volatility is global markets is expected as this news continues to be digested. The heaviest fallout for the UK will be in their financial sectors. As mutual fund investors, it's times like this when we realize the value of having a professional money management team on our side. Active management is key during challenging market conditions. We are fortunate to have a team of pros on our side to monitor markets, make portfolio adjustments, and assess investment opportunities that arise during periods of uncertainty.   

Changes to Canada Pension Plan - Recognizing some Canadians still struggled with very low incomes in retirement, reform plans to boost the CPP were made and agreed to by the Federal Government and most Provinces and Territories in June. The goal is to address the evolving needs of our aging population and changes in the economy and labour market. Employer and employee CPP contributions will both increase by 1% phased in over the next 9 years. The new portion of CPP will be a 'target benefit' plan and will be ully funded - everyone pays for their own benefits with no debt passed down to the next generation. The CPP is not meant to fund 100% of your retirement income, an additional source for retirement income (RRSP, TFSA) is necessary for most. The greatest benefit of this CPP enhancement will be realized by the younger generation, 40+ years from now. 

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