1) The Baby Boomer generation is facing retirement challenges due to longer lifespans, lower interest rates, and unrealistic retirement expectations set by past marketing campaigns. 2) In response, the Canadian government is raising the age to receive full CPP benefits to 67 from 65 due to increased lifespans and lower returns on pension funds. 3) Many retirees will need to work past 65 or risk not maintaining their pre-retirement standard of living, as pensions alone may not provide enough income.

1. MARKET COMMENTARY
An exclusive newsletter from
Mark J. Krygier, LL.B., CFP, Vice President & Portfolio Manager
FREEDOM 75 ANYONE?
The Baby Boomer generation is facing a crisis of which they never imagined. They are retiring in
an era when on average they live longer than they expected, and when interest rates are lower than
May 2012 they could have ever forecasted. Up until recently, this generation was the envy of my generation,
Volume 13, Issue 4 the one following the Baby Boomers, as many of them bought real estate relatively cheaply versus
their employment income, they invested in an era of high interest rates, they were steadily employed,
and economic growth was virtually certain as they aged. To compound it all, some of the marketing in the financial industry
lulled them into a false sense of what their retirement would look like. Who doesn’t remember the advertisements for
“Freedom 55”? It was one of the most successful marketing campaigns and it hit a cord with the national psyche that
longed for that early retirement at the beach home. Want to retire early? No problem – just invest in our product and ride
the wave to great suntans, plenty of golf games, and live happily ever after. Such marketing could easily have led one to
believe that if one couldn’t retire by 55 one was a financial failure - then came a dose of reality.
Recently the Canadian Government announced that for those aged 57 or younger, getting C.P.P. (Canadian Pension
Plan) would mean waiting another two years until the age of 67, rather than the expected 65. Why oh why would our dear
Members of Parliament be so mean-spirited as to cut the pensions for seniors? The answer comes down to simple math.
When interest rates are at 2 - 3% instead of the historical 6 - 7%, when equity returns are lower than historical averages, and
when retirees are going to live 10-15 years longer than the pension fund actuaries expected, there simply isn’t enough
money in the pension pot to go around. I hate to be cynical, but I fully expect that by the time I retire, C.P.P. benefits will
either be available only to those in the lowest income categories, and/or will not be available until the age of 70 or higher. It
is absolutely no coincidence that employment statistics in the last five years consistently show that more and more people
are delaying retirement well past 65 and that more “pensioners” are taking on part-time employment than they have ever
done in history. They are living longer and most of them don’t have enough money to maintain their pre-retirement
standard of living.
We have been having more frank discussions with clients in recent months than in the last few years. These discussions
involve budgeting for retirement, estate planning, as well as investing planning to try and find solutions in areas few ever
imagined they would have problems. One would think the higher income earners don’t have these problems but higher
income typically means higher standards of living, so the challenges remain with just the numbers changing.
Bottom line – the financial landscape is changing and the need to challenge old assumptions is increasing daily. Review
your expectations for retirement and make sure you won’t be in for some unpleasant surprises.
GLOBAL BENCHMARKS – To April 30, 2012 (Canadian $ Returns) – sourced from TD PAIR
Asset Class YTD 1 Year 3 Years Asset Class YTD 1 Year 3 Years
S&P/TSX 60 (Canada) 3.7% -9.8% 10.3% US$/CDN$ (0.9872) -3.3% 4.5% -6.1%
S&P 500 (US) 8.1% 9.5% 12.2% 10-year GOC Bond -0.1% 13.9% 6.2%
MSCI Europe 3.1% -15.6% 1.7% 5-year GOC Bond -0.9% 7.0% 4.0%
MSCI Emerging Mkts 8.2% -11.0% 8.6% 3-Month CDN T-Bill 0.3% 0.9% 0.6%
MSCI World 5.8% -2.7% 6.2%
Mark J. Krygier: T : 416-512-6441 E : mark.krygier@td.com
Avital Pearlston: T : 416-512-6674 E: avital.pearlston@td.com
4950 Yonge St., 16th Floor, Toronto, ON M2N 6K1
The statements and statistics contained herein are based on material believed to be reliable, but are not guaranteed to be accurate or complete. This newsletter was prepared
by Mark Krygier who is a TD Waterhouse Investment Advisor and is for informational purposes only. It is not an offer or solicitation with respect to the purchase and sale of any
investment fund, security or other product and does not provide individual, financial, legal, investment or tax advice. Please consult your own legal and tax advisor. Particular
investments or trading strategies should be evaluated relative to each individual's objectives in consultation with the Investment Advisor. TD Waterhouse Canada Inc. and its
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