What happens to my money if I die? Is there any benefit for my spouse?

With registered accounts, including TFSA, RRSP, and RRIF accounts, you can designate how your investments are transferred to your beneficiaries or your spouse as a successor upon your death. The assets in your accounts can be paid directly to the beneficiaries you designate on the account documentation, bypassing your estate.

Beneficiary designations for the Common Good Plan apply individually to the TFSA, RRSP and RRIF accounts (if applicable), and do not need to be the same person for all three accounts.

If you want your spouse or common-law partner (“spouse”) to be your sole beneficiary, you can designate your spouse for all three accounts – you would need to complete the beneficiary designation process individually for each account.

If you are married or common-law, designating your spouse as the “successor holder” (TFSA) and “successor annuitant” (RRIF) simplifies the process of transferring assets from your TFSA and RRIF to your spouse upon your death. This means your spouse would take over your accounts upon your death. They would then have to:

  • Transfer the benefit to their own account on a tax-deferred basis if they are also a member of the Common Good Plan.
  • Transfer the benefit on a tax-deferred basis to another TFSA or RRIF outside of the Common Good Plan.

If you are married or common-law, you can designate your spouse as the “beneficiary” for your RRSP. Upon your death, your spouse can transfer the assets of your RRSP to their own account either within or outside the Common Good Plan to continue the tax deferral. Generally, only a spousal beneficiary is permitted to directly transfer the assets of a bequeathed RRSP and continue the tax deferral.

If you wish to designate a non-spouse as your beneficiary for any one or more of your accounts, you can list the beneficiaries individually for each account. If you choose this option, your beneficiaries will receive a cheque in the event of your death. There is no direct transfer of funds for “beneficiaries.”

If you do not designate any beneficiary for your Common Good Plan assets, the Common Good Plan will pay assets to your estate.

You can read this educational article for more on beneficiary designation.

What happens if I decide to retire earlier or later than initially anticipated? How would that impact my contributions to the Common Good Plan?

The Common Good Plan savings strategy will be impacted by the age you say you want to retire. By changing your retirement date, your contributions to the plan and target date fund may need to be adjusted so you can still achieve your target retirement income. You will also need to consider the impact this may have on your government benefits (Canada Pension Plan and Old Age Security).

There are rules on when certain retirement payments must begin. Your RRSPs must be converted to a RRIF no later than the end of the year you turn 71, at which time minimum payments must be made. You can elect to convert to a RRIF earlier than age 71 to meet your retirement needs. Your TFSA is flexible, and you can start receiving retirement income at an age that accommodates your needs.

When can I start receiving my retirement income?

Unlike in a registered pension plan, the Common Good Plan offers flexibility regarding when you can start receiving retirement income because it is composed of a RRSP/TFSA/RRIF. For example, you can start payments even as you are working part-time later in your career.

Your RRSPs must be converted to a RRIF no later than the end of the year you turn 71, at which time minimum payments must be made. You can elect to convert to a RRIF earlier than age 71 to meet your retirement needs. Your TFSA is flexible, and you can start receiving retirement income at an age that accommodates your needs.

The plan will provide you with planning tools to assist you with developing a retirement plan – converting savings to income in retirement and integrating various income sources, such as government benefits.

When can members start receiving a retirement income?

Unlike in a registered pension plan, the Common Good Plan offers flexibility when members can start receiving retirement income because it is composed of a RRSP/TFSA/RRIF. For example, members can start payments even as they are working part-time later in their career. 

Members must convert their RRSP to a RRIF no later than the end of the year they turn 71, at which time minimum payments must be made. The TFSA is flexible, and members can start receiving retirement income at an age that accommodates their needs. 

The plan will provide members with planning tools to assist with developing a retirement income plan – converting savings to income in retirement and integrating various income sources, such as government benefits.

What happens to members after they retire?

Even after retirement, members will continue to reap the benefits of the Common Good Plan. They would still have access to the investment funds as part of the plan, which would automatically be adjusted (more conservative) according to their age and stage. They would continue to pay the same low fees as when they were employed. We’ll also provide support in turning their nest egg into actual retirement income by converting to and managing a RRIF. Members would still receive education on critical topics, such as how to access Canada Pension Plan (CPP), Old Age Security (OAS), and Guaranteed Income Supplement (GIS). 

Members will be able to access their Common Good retirement income in a number of different ways. They include setting up a regular withdrawal based on a percentage of assets and/or a fixed pension-like payment. Members also have the option to withdraw funds in a lump sum or through a transfer to another TFSA, RRSP, or RRIF.

What will I receive from the Common Good Plan when I retire?

The plan will provide you with planning tools to assist you with developing a retirement income plan – converting savings to income in retirement and integrating various income sources, such as government benefits.

You’ll be able to access your Common Good Plan retirement income in a number of different ways. They include setting up a regular withdrawal based on a percentage of your assets and/or a fixed pension-like payment. You will also have the option to withdraw funds in a lump sum or through a transfer to another TFSA, RRSP, or RRIF.