Manulife One can provide financial flexibility in retirement

A stable income can be very important in retirement. And, as the following section describes, financial flexibility may be just as important.

Smooth out your monthly cash flow
Even if your retirement income matches or exceeds your expenses over the long-term, there’s no guarantee you’ll have a surplus every month. Manulife One can act as a buffer to help smooth out your monthly cash flow. In lower-expense months, the extra money can stay in your account, either reducing your debt or, if you have a positive balance, earning a competitive rate of return. In higher-expense months, you’re able to access your accumulated savings and your line of credit, up to your borrowing limit.

Reduce the impact of temporary market downturns
Many Canadians rely on investments such as stocks and mutual funds to provide a portion of their investment income. However selling these investments when their value has declined could have a significant negative impact on how long these investments will last.

When the value of your investments has declined, it may make sense to temporarily take income from your Manulife One account and leave your investments intact. Then, when the value of your investments has recovered, you can again use these investments to supplement your income and repay any debt you’ve accumulated. Your financial advisor can help you determine if this strategy is right for you.

Prepare for the “what-ifs?”
Aside from the regular month-to-month fluctuations in retirement expenses, you may also encounter larger one-time expenses. These are sometimes called “what-if” events: “What if I have unexpected medical expenses? What if I need to help out the kids? What if the house needs major repairs?” If you haven’t planned for these, you may have limited or unattractive options when the time comes.

The best time to prepare for a “what-if” event is now, before the event has taken place. By giving you access to 50% to 80% of the value of your home, Manulife One can provide you with an immediate option for addressing the expense and may give you the time you need to restructure your finances to reflect your new circumstances.

Help out your children or grandchildren
One of the benefits of a lifetime of hard work and saving is the ability to give your children or grandchildren a leg-up by helping them with larger expenses, such as a down-payment on a home or tuition for post-secondary education. However, if this help comes from your retirement savings, it could derail your financial plans, particularly if your investments have recently declined in value.

With Manulife One, you can tap into your home equity to help your children or grandchildren and keep your retirement savings intact. Plus, if you’d prefer to loan the money rather than gift it, you can track the debt repayment and interest separately in a sub-account.

Supplement your retirement income¹
In some cases, it may make sense to supplement your retirement income by making temporary or longer-term systematic withdrawals from your Manulife One account. If you are considering a reverse mortgage, be aware of high set-up fees, lower credit limits, mandatory withdrawals and a large interest charge when you sell your home.

With Manulife One, your first appraisal may be free, and there is no minimum withdrawal required - borrow only when (and if) you need it. Plus, with your income flowing into the account, there should be no additional interest payment required when selling your home.

If this option is of interest to you, your financial advisor can review your individual situation and help you determine what withdrawal amount is sustainable.

Other Manulife One benefits include:

• Faster approval for credit limits of 50% (or less) of your home’s appraised market value, i.e. a $100,000 borrowing limit based on a home’s market value of $200,000.
• For seniors, 50% off Manulife One’s single monthly administration fee which covers most of your banking transactions and account inquiries.
• When you don’t need to borrow, you’ll earn high interest on every dollar you deposit - no minimum balance, no limit on the amount of banking you do.

Note: The monthly administration fee is $7 for seniors ($14.00 for account holders under age 65). Rates and fees are subject to change without notice. Other costs could include additional legal costs for home purchases. Any costs over and above normal title search are the responsibility of the account holder.
View cost of borrowing for Manulife One.

Next steps

Find out how to apply or learn more.

Learn how Manulife One can add flexibility to your retirement finances.

Learn how Manulife One can help you prepare for life’s “what-ifs?”

¹ With Manulife One, client withdrawals cannot exceed the maximum approved borrowing limit and you must pay any accrued interest and fees which would increase the total debt beyond the borrowing limit. This differs from a reverse mortgage, where a client may not be required to make deposits into the account.