Combining locked-in accounts makes planning easier

Today, many of us may have retirement assets in locked-in accounts, but may not fully understand the options available for this money. We may even have forgotten it’s there.

Locked-in retirement accounts arise when an employee leaves a pension plan, typically as a result of a change in employment, or when an employer winds up a pension plan.

The assets in locked-in retirement accounts continue to grow every year, and they may be an increasingly important part of the average Canadian’s retirement nest egg. Unfortunately, because these accounts are frequently small, investors may overlook or ignore them.

With locked-in accounts – from which you may not withdraw the assets – you maintain full control over how you invest and with what financial firm you deal. In the majority of cases, you can transfer the account to your financial security and investment representative.

Consolidating these assets can be advantageous for a number of reasons:

It’s easier to ensure appropriate overall asset allocation.
One of the most important pieces of advice you receive from your financial security and investment representative is an overall asset-allocation recommendation. You should include all your retirement assets in this assessment process, so that your decisions are based on a complete picture of your personal situation. This will also help you ensure that your investments properly reflect your unique circumstances and tolerance for risk.
You can better understand how these assets factor into your overall plan for the future.
Your financial security plan should be built with all your investments in mind. To properly assess whether you are on track to reach your goals, you need to look at the entire picture. Locked-in assets will be part of your income stream some day and need to be included in your plan.
Consolidation can mean easier changes and fewer headaches.
It can be frustrating dealing with multiple advisors and accounts, especially when the accounts in question are small. Working with a single advisor means you have more opportunity to build a relationship, and you can be more confident that issues are dealt with in an efficient and timely manner.

If you have locked-in assets and want to enjoy these benefits, talk to your financial security and investment representative today. He or she can assist you in transferring these investments quickly and easily, and can also help you understand how these assets fit into your overall financial security plan.

This information is general in nature, and is intended for informational purposes only. For specific situations you should consult the appropriate legal, accounting or tax advisor.