Managing Goals in Conquest
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      Retirement Goal

      Achieving Retirement Goals in Conquest Planning

      What is a Retirement Goal?

      The Retirement Goal function in Conquest Planning is foundational to financial planning, helping clients achieve financial independence and security. This goal is required and cannot be deleted from the plan. It allows financial planners to create and track retirement savings plans, set target amounts and timelines, and model various scenarios to ensure clients are on track to meet their financial objectives. The tool also offers projections for savings, withdrawals, and the impact of inflation to provide a clear path to a secure retirement.

      Navigating to the Retirement Goal

      The following videos provide a step-by-step guide in which a financial planner navigates to and creates an Retirement Goal.

      Adding the Retirement Goal and Expenses

      Please view the video below on a step-by-step guide on how to add the Retirement Goal.

      The first step in adding retirement expenses from the Retirement Goal page is to click the blue 'Expenses Card' link.

      Once the link is selected, a menu of options will appear for recording 'Pre-Retirement Expenses' and 'Retirement Expenses.'

      After clicking either prompt, you will need to classify the expense as one of the following: Necessity, Discretionary, Child Support, Medical, Attendant Care, Charitable Donation, Self-Employment Business, Carrying Charges and Interest, Deductible Spousal Support, or Other Deductible Expenses.

      Once the expense classification is chosen, the 'Type' and 'Description' fields under both Retirement and Pre-Retirement expenses will be automatically populated with the respective choice.

      The user wishes to change the Type of Expense, they will need to delete the expense by selecting the red-encircled trash bin icon (shown in the image above), and then choose a new expense.

      Next to the Monthly Amount, the financial planner will see both the start and end dates of the expenses. To update these dates, the user should click the calendar icon in the text box.

      Once selected, a drop-down menu will appear, allowing the financial planner to choose an 'Event,' 'Date,' or 'Age' when the client will incur these expenses. The 'Date' and 'Age' options are straightforward; however, if the user selects 'Event,' a drop-down will appear with the following options:

      • Retirement
      • Death
      • Plan Date
      • First to Retire
      • Last to Retire
      • First to Die
      • Last to Die
      • Start of Plan Year
      • End of Plan Year
      • As late as possible

      Features and Functionality

      1. What is a Withdrawal Plan?

      The Withdrawal Plan in Conquest is a strategy that helps financial planners manage retirement income distributions. The plan allows you to optimize the withdrawal order, which is crucial because the sequence in which assets are withdrawn can significantly affect the sustainability of the retirement plan. 

      Additionally, Conquest offers flexibility by enabling you to set up sequential withdrawal plans for different phases of the client’s retirement spending needs. This feature can be used when there are distinct phases in the retirement, such as a spending phase early in retirement and a more conservative phase later on.

       

      2. Navigating the Withdrawal Plan

      To locate the Withdrawal Plan section, the user must select 'Client Data' beside the 'Dashboard' option in the program's header, outlined in blue in the image below. 

       

      3. Setting up the Withdrawal Plan

      After navigating to the 'Plan Settings' page, the user will select the 'Cash Flow Assumptions' option on the left side of the page.

      From there, the Financial Planner can choose the year to set up the Retirement Withdrawal Plan and its respective 'Use Method' to optimize the withdrawal order.

       

      4. Definitions & Implications

      The Financial Planner also has the option to set up sequential withdrawal orders to match different phases of the client's retirement spending needs. Below is a list of the available withdrawal orders, along with their definitions and implications.

      Withdrawal Methods Definitions & Implications
      Redeem low-tax investments first This is the default setting in Conquest. Allows tax-sheltered investments like RRSPs & LIRAs to grow as long as possible to maximize the benefit of tax deferral. Can result in a larger estate tax bill.
      Redeem high-tax investments first     Uses the RRSPs (RRIFs) and LIRAs (LIF to the max) first. When combined with the delay of CPP/QPP and/or OAS, this method may help utilize lower marginal tax rates in earlier years while reducing RRIF minimums later in life. Can result in high taxable income tax in the early retirement years.
      Pro-Rated withdrawal Uses all assets proportionately, which helps to spread out the tax liability.
      Preserve TFSAs Pro-rates assets that are not TFSAs, allowing TFSAs to grow tax-sheltered for as long as possible to minimize the tax burden to the estate.
      Preserve registered accounts and TFSAs Defers the use of tax-sheltered investments like RRSPs & TFSAs to the end of the planning horizon. Non-registered investments are redeemed first, and registered & TFSAs are used only when the non-registered money runs out. Can result in a larger estate tax bill.
      Manage taxable income Smooths income in retirement. This option may take more taxable income than needed and direct any surplus to a TFSA and/or non-registered investments. This method also looks to crystallize capital gains in non-registered investments to generate taxable income, even if there is no corresponding need. Can be constrained by defined benefit pensions, annuities, and other fixed incomes.
      Limit taxable withdrawals This method will attempt to keep taxable income below the specified amount. Registered withdrawals are balanced between the spouses and capital gains are minimized.
      Minimize taxable income This method will minimize taxable income to a range of income levels (specifically a band of $10,000). This method tends to be more useful among HNW clients that are perpetually in the highest tax bracket and would benefit from income smoothing during retirement.

       

      5. What is a Deficit Coverage?

      Deficit coverage refers to how shortfalls (or deficits) in a client’s cash flow during retirement are managed.

      When a client's available income is insufficient to cover their retirement expenses, Conquest provides various options for addressing the gap. These options determine how the shortfall is "covered" or addressed by different income or fund sources.

      Deficit coverage can be set up on the same page where the Withdrawal Plan is configured, under the Cash Flow Assumptions page, within the Plan Settings section.

      In the Deficit Coverage section, there are two dropdown menus: 'Pre-retirement Deficit Coverage' and 'Retirement Deficit Coverage.' Both dropdown menus offer the same set of deficit coverage approaches:

      • None

      • Taxes only

      • Monthly

      • Quarterly

      • Annually plus taxes

      • Annually