Comments on: Manulife IncomePlus: The high cost of peace of mind

By: newbie

newbie — Mon, 21 Nov 2011 18:53:09 +0000

…for primarily RRSP money

By: newbie

newbie — Mon, 21 Nov 2011 18:52:10 +0000

How does this plan work for new investors in their forties?

By: dj

dj — Wed, 02 Nov 2011 22:37:29 +0000

Ya you nailed it…so lets say you waited until 55 to start to draw down ,sometime around 75 you would be drawing invested cash ,but if you die before 90,Manulife is still makes out like a bandit…..but if you like this investment/insurance plan,go for it.

By: Confused

Confused — Wed, 02 Nov 2011 13:49:36 +0000

RCO runs out after 20 years.
I was more interested in income for life.

By: dj

dj — Wed, 02 Nov 2011 00:33:13 +0000

You could take some cash out every July 1st. after the 1st. year in the plan (google ROC)but really if you want this plan to work for you…a few resets “could” make a larger payout.

By: Confused

Confused — Sat, 29 Oct 2011 00:26:38 +0000

Hi folks…..

I always thought that if you wanted income for life, you had to wait till you’re 65 before you could start withdrawing. But this link says 55:

https://repsourcepublic.manulife.com/wps/wcm/connect/c754c580443daa4888e4e8472726a511/inv_seg_whyincomeplus.pdf?MOD=AJPERES

Anyody know anything about this? Did Manulife change their policy?

By: Confused

Confused — Tue, 09 Aug 2011 01:06:15 +0000

Just a quick note to reiterate my question:
– where do we find someone who would be good at avising us which funds to choose
and when to move the money from one fund to another (e.g. from equiteis to bonds or a money market fund) inside the IncomePlus.

The financial advisors I use are useless. They just choose the fund that pays the highest fees and tell me to buy and hold forever.

By: Confused

Confused — Wed, 03 Aug 2011 14:53:59 +0000

Let’s say your income plus account has a $100,000 value (i.e. the market value). A year goes by. You tale your 5% ($5,000 withdrawal). And let’s say the market went up 2% during that year ($2,000 gain in the account). Then you die. At this point your spouse would get $97,000. Not $100,000.

This is a simple example of what happens when you taking 5% from the Income Plus but the mutual funds do not perform at 5%. Every year that happens it will reduce the market value and therefore reduce the legacy that you will leave when you die.

If this happens a lot (esp when there are bad years with losses) then the market value will definitely keep going down and down and eventually it will reach zero. That’s when it becomes like an annuity.. Yes, they will still pay you the $5,000 every year till you die. But then that’s it. Zero is left for the spouse.

In summary, that’s why I think we definitely care if the mutual funds are chosen properly.

P.S. Yes, if you are really lucky the mutual funds wil perform so fantastic that you will see a reset and then get even more then $5,000. Thayt will also make it likely you will be able to leave money after you die. But I am ignoring that for now (that would be almost too good to be true… I’d be happy just to make sure my market value remains at least what my original investmnet was).

By: KS

KS — Wed, 03 Aug 2011 04:18:20 +0000

@Confused: to the first part of your answer – that means it is better than the Pension or Life Annuity, as for the IP, there is still the market value left to my estate or spouse even after I have received the 5% for 20 years (= my original capital is used up), right?

To the last part of your question – since they guarantee me 5% distribution every year until I die, why I have to bother what fund to choose or switch? If the fund performs better, I may be able to reset it. If the return is less than 5%, they still have to give me 5%, right?

Thanks.

By: Confused

Confused — Wed, 03 Aug 2011 02:07:47 +0000

To the previous question, I beleive this is the answer. If the mutual fund you choose (inside the Manulife account) earns 5% a year after fees and you withdraw 5% a year, then then the Manulife account will be the same as the ETF approach in your question…. When you die you will still have the original capital left in it at any time you can cash it out. Or if you die, you can pass it on to your spouse.

So this is the question I’d really like to hear what the answer is: How do we make sure we get the returns we want? Where do we get the best advice as to which is the best mutual fund to choose inside the Manulife account. Or when to switch from one to the other (which I beleive we can do 4 times a year without any charges or fees)?