YourStyle Financial

Financial Planning

Calling All Millennial Women: Your Finances Need You

May 17, 2019

In our last blog we discussed the results from the USB survey indicating the deferral of financial planning by women to their partners. If you recall, the highest demographic for this was millennial women. Millennials are famous for being an easy target for mockery but perhaps it’s time for the prior generations to help them pull up their bootstraps when it comes to financial planning. Millennials are the fastest growing group in the workforce and are dealing with the challenges of graduating during a recession and the continued wage gap. Combine these factors with the likelihood of taking time away to have children and a longer lifespan, it’s more important than ever to master finances and long-term planning. Another layer of complexity is that most millennials are raised by parents who live with high debt-ratios. Baby-boomers were raised with a fear of owing money and made a concentrated effort to avoid it and to pay it back as quickly as possible. The next generations were handed credit like candy and indulged. Learning by example may not be the best course of action, so we’ve compiled some advice for the up-and-coming.

  1. Spend Carefully. Along the same lines as “think before you speak”, think before you buy. Evaluate what long-term benefit that item is going to bring to you. When it comes to the nickel and dime type expenses such as your daily dose of fancy coffee, invest in a fancy espresso machine at home.
  2. Build an Escape Plan. Life often throws challenges our way and true power comes from being able to choose your own path. Having some cash squirrelled away allows you to make the choices which are right for you and prevent you from returning back to what was keeping you in debt.
    1. Set up an automatic deposit from your paycheck to an account which you are not able to easily access. That way you never had the money, so you can’t miss it.
    2. Funnel your wins. Instead of “treating” yourself with your birthday gifts, tax return or bonus, treat your future self by putting it into your savings account.
    3. Manage Your Debt. You’ve grown up in an era of credit and debts from student loans to car loans to credit cards. Make a list of all you owe and the corresponding interest rates. This will enable you to prioritize which debts you want to pay off the quickest. High-interest debts should be the first target to stop the cycle of handing your money to an institution.
    4. Save for Your Future. It’s hard to look that far forward when you’re in your 20’s, but imagine the freedom of being able to live your life your way when you’re older. With a few sacrifices, you can save now and play later.

The millennial generation espouses the importance of equality, empowerment and independence. As a millennial, it is your responsibility to implement changes in your life which align with your values. If you want to be in control of your destiny, you need to control your money. Money brings freedom and freedom brings independence. If you’d like some help taking your first steps towards your financial future, we’d love to meet with you.]]>

Empowerment and Equality and Your Finances

March 27, 2019

The slogan “girl power” has been used for decades to encourage and celebrate female empowerment, independence, and confidence. The term used most often relates to sports and employment; however, new studies are showing that women need to exert their girl power when it comes to finances and financial planning. A recent study released by UBS shows that 58% of women worldwide defer long-term financial decisions to their spouses. This study included nearly 3,700 high-net-worth married women, widows and divorcees in nine countries. The results of the study showed that 85% of women were responsible for the day-to-day finances; just not the long-term. What is really interesting is the generational span of this survey and, most notably, the generation most likely to allow someone else to control their decisions: millennials! Millennials are a generation well known for promoting equality and empowerment. Unfortunately, the survey results indicate the helicopter-style parenting millennials were raised with, where someone else is always ensuring their well-being, has bled into the financial realm. Fifty-nine percent of millennial women aged 20 – 34 are more likely to allow their spouse to take the lead compared to 55% of women over 50. The general excuse from the younger women is they have “more urgent responsibilities than investing and financial planning”. Even more contradictory to the equality movement is they “believe their spouses know more about long-term finances than they do”. The challenge this arrangement poses is the lack of preparation and understanding should a life event such as death or divorce occur. The report noted that 74% of the widowed and divorced women it surveyed reported “discovering negative financial surprises after a divorce or death of their spouse.” Hindsight resulted in 74% of these respondents wishing they had been more involved in long-term financial decisions while they were married, rather than trying to navigate them while coping with such significant life changes.” The ideal solution is for both partners in a relationship to be aware of both the short- and long-term aspects of their finances. Whether you are married, engaged, common-law or committed, financial planning is another part of creating a responsible long-lasting arrangement between two parties. In this age, knowledge really is power. So be powerful, take control of your money. Like the saying goes, the first step is recognizing the problem. Take the next step in addressing the problem and book an appointment for yourself and your partner with one of our Financial Planners and begin your journey.

I Can Make Money by Saving Money?

January 30, 2019

It seems like a polar opposite philosophy: “Spend Money to Make Money”, but it’s true. Gone are the days of 8 – 10% deposit interest. Now you’re lucky if you make pennies on a thousand dollars, especially with the penny now obsolete. If you have cash in the bank, there are options for investing beyond RRSPs and GICs. In 2009, the TFSA or Tax-Free Savings Account was introduced. The initial contribution limit was $5000 per annum, growing to $5,500 for a number of years. The inflationary increase in 2018 was high enough to push the maximum annual contribution to $6000. An added feature of the TFSA is that the annual contribution room accumulates so $63,500 can now be contributed overall. There are a number of reasons why a TFSA may be the right choice for you. The first is the fact they truly are tax-free. Any income or gains from the accumulated funds are tax-free for life. Funds can also be withdrawn without penalty or taxes at any time. Because of this status, TFSA withdrawals do not negatively affect any other benefits available to you such as Old Age Security (OAS). If the account is set up correctly, in the tragic event of a loss of the primary account holder, the successor annuitant would receive the full value of the TFSA without going through the estate. Age is not a factor. Other options such as RRSPs require the contributor to be under a certain age and be earning income. Anyone over the age of 18 can contribute to a TFSA. They are a popular choice for those in their Golden Years because they allow for continued tax-sheltering of money even after age 71. There are no forced withdrawals or tax consequences when amounts are withdrawn. The flexibility offered with the TFSA allows for withdrawals to be recontributed in the following year without reducing the contribution amount. Meaning, if you withdrew $1000 in 2018 you are able to contribute the $6000 for 2019 and top it up with the $1000 withdrawn the prior year. If you are an investor with money, maximizing your RRSP and TFSA would make the most sense. For those who don’t have a lot of money to spare but want to save for an event in their life such as a home or car, a TFSA offers a great way to protect, invest and grow your funds. There are many options available when it comes to savings and long-term planning and the information available may become overwhelming. This is why working with a Certified Financial Planner (CFP) and having the RIGHT plan in place can make all the difference.]]>

RRSP Advice

The Time to Invest in Your Future is Now. Not Next Year.

January 14, 2019

As 2018 becomes a shadow of the past and 2019 shines its opportunity upon us, it brings us closer to “that time of year”. Tax time. If you’ve ever seen The Lion King, saying tax time is like whispering Mufasa and watching the Hyena’s shiver. Now is the time where talk turns to deductions and retirement investments before the February cut-off for contributions. Now the shadow of 2018 is rearing its ugly head as it’s there to remind you that you had all year. You’re not alone. Millions of Canadians wait until Spring to start thinking about their RRSPs, and with a heavy heart they sigh and think “I’ll do better next year”. However, next year is already this year and it’s unlikely any signification changes have been made. Life has gotten back to normal after the holidays and lives have become a whirlwind of school, work, sports, family and just trying to manage life. Soon it will be summer and Manitoba will do it’s typical slow down where cottages become priority. Then school starts again and before you know it, it’s already the holiday season again. After which, you’ll sigh and say “I’ll do better next year”. The good news is, you can do something about it now. Instead of scrambling to put together a good contribution, perhaps this year (yes, this year) is the year to take an easier approach. RRSP loans strategies such as gross up, are a great way to boost your RRSP savings while minimizing interest rates Interest rates are quite low right now, and the gross up strategy is a great way to take advantage of that. Consider this scenario. You have $5000 to contribute to an RRSP, you’re sitting in the 40$ marginal tax rate and your RRSP limit allows for more than $5000. If you borrowed $4000, that would give you $9000 to invest in your RRSP. Based on the aforementioned scenario, you can anticipate receiving approximately $3600 in a tax refund which you can use to pay down the loan. This part takes self-control to apply those funds to the loan instead of self-indulgence. Remember, you’re indulging in the long-term plan using this approach. Depending on your stage of life, current income and debt ratio, there are numerous ways to invest in your future goals. Between RRSPs, high-interest saving accounts, TFSAs and GICs, it can be overwhelming to determine which route to take. A Financial Planner can help guide you on these options and what fits best for you.

Do you need a professional in your corner?

December 20, 2018

Let me tell you a story.  This story is about a client, who was experiencing an exciting life event.  He had been with the same employer for over 10 years when he decided to pursue a new opportunity.  He handed in his notice and received a stack of termination papers with what he thought was all he needed.  Having had a close relationship over the years, this client knew that I am a Certified Financial Planner (CFP), so he asked me to take a look to make sure everything was in order.  To my surprise, I noticed that there was no information regarding his pension.  I double checked with him whether the company offered a pension and he confirmed that the company pension was a matching plan where the employer contributes and the employee matches.  Astonishingly, there was no record of any pension being deducted from his pay cheques, despite him being eligible after two years of employment. Turns out, the employer had simply over looked (or neglected??) to deduct his pension contribution.  On his behalf, I checked with the Human Resources office of his former employer, who confirmed that he was indeed eligible for a pension pay out – so where was it?

I negotiated with the company to ensure that he received the retirement funds to which he was entitled.  This was no insignificant amount!  Had my client not had the foresight to have me review his termination package, it is unlikely this error would have been uncovered. He was mighty happy to have me in his corner!
Are you experiencing a life event, or do you know someone who is getting married, having a child, divorced, retiring, starting a new job or going back to school??  It can never hurt to discuss life changing events with a Financial Planner.  Likely, all will be fine; however, having a professional in YOUR corner could ensure that nothing gets left behind.

How do you get paid?

September 13, 2018

You’ve seen those commercials on TV with clients questioning their advisors about how they are paid or requesting a “second opinion” on your investments.  But the old cliché You get what you pay for is fitting.
With YourStyle Financial, the initial consultation is free.  YourStyle Financial is more than an investment firm.  We incorporate all aspects of the planning process:  insurance, tax and estate planning, retirement projections and of course, investment advice.  A lot of elements are involved in developing a Personal Financial Action Plan: it can take an average of 5-6 hours.  There is no obligation to move forward or use any of the recommendations provided for your review; however, should you like what you see and decide to proceed, then, like most things in life:  There is no free ride.
Compensation is paid one of two ways:  Fee for Service or Commissions.  Fee for service is based on an hourly rate.  A typical Financial Plan will run from $1,500 – $3,000 depending on complexity. Commissions are based on investment deposits or insurance premiums. They are built into the management fees and typically range from 1% – 5% in the first year and .5% – 1% thereafter.  Any commissions generated will offset fees for service eliminating any duplication.
Managing your wealth can be complex and time consuming. Our role is to simplify the process by addressing all aspects of your financial well being.
When you make the decision to explore your options, we’d love the opportunity to speak with you.

Planning for the Unplanned

June 14, 2018

What comes to mind when you hear the term “financial planning”? It’s a kind of fuzzy term that most people associate with retirement or other such occurrences in the future. Thinking and planning for the long term makes sense, but what about now – today, tomorrow, or the day after? Here’s a little scenario to get you thinking about today. You live in a nice home with your spouse and family. You’re both gainfully employed and life is going well. Since you’re feeling comfortable, you upgrade that old junker car to one that’s more appropriate to your current lifestyle. You deserve it! Then you and your spouse look around your house and compare it to your friend’s who just bought a new house in a new development. Hmmm, you wonder, what would your house look like with a new kitchen? So you start the process of meeting with the designer, picking out appliances, cupboards, countertops and lighting. All the stressfully exciting things that come with a home renovation. The work is done, the kitchen looks amazing and you sigh happily. Ahhhhh, life is good. You wake up the next day, stroll into your beautiful new kitchen, sip your coffee and head off to work in your new vehicle feeling content. Another day, another dollar. As you’re logging in for the day, your boss asks to see you in her office. “Be right there” you say. But, when you sit down across from your boss, you realize she’s not smiling and there is a letter flipped over in front of her. You have become a casualty of your firm’s downsizing. Suddenly, life is not so good. This is the moment where financial planning can ensure financial security. There are a number of options available to create a nest egg, not only for retirement but for all of life’s uncertainties. If this situation hits a little too close to home, it might be time to speak with a financial professional to ensure your bottom line is covered —  no matter what life throws at you.

A New Year, a New Financial Plan

January 17, 2018

The holidays are over and the celebrations are complete. Now it’s time to look forward to the new year and all the opportunities it brings. When it comes to resolutions, the focus always seems to centre around appearances and hitting the gym. Perhaps this year it’s worth thinking about hitting the financial plans.

There are a few simple steps you can take on your own to improve your financial situation. The obvious one, of course, is to get control of your spending.  While that seems simple enough, it’s surprising how overwhelming this can seem. So start with the basics. Make a list of all your required monthly expenses; not your wants, but your must have’s.

Include things such as:
–    Rent or mortgage payment
–    Home or renter insurance
–    Property taxes
–    Utilities including hydro, phone, internet, tv
–    Auto insurance
–    Fuel and/or bus pass
–    Food

Once you’ve calculated all your required expenses, subtract that from your net income for the month. Now you know what you have to put aside every month just to get manage your obligations and how much you have left to make decisions on. From here, set an entertainment budget. In the days of digital currency, it’s easy to tap your bank card into debt. One tip is to withdraw your entertainment money in cash on every pay date and then store your bank card. Once the cash is gone, you know you need to find free entertainment options.

Now that you’ve covered the basics, it’s time to think bigger picture. What do you want your money to do for you? The options to achieve your goals are quite vast and you want to make sure you’re making the responsible choice to attain them. If you’re looking at larger purchases or long-term financial planning, this might be the right time to talk to a professional. Financial Planners are able to look at the entire picture and present the best options for your dollars. Not only is it okay to ask for help, it’s the first step in the progression of the new you.

We’d love to help you with your resolutions. Give us a call or contact us today.

Struggling with Finances? You’re Not Alone

December 12, 2017

When you’re sitting at the table shuffling through a stack of bills, or you’re scared to check your email for fear of finding new bills, it’s easy to think you’re all alone.  It’s natural to become overwhelmed and believe there is no way to dig yourself out of your current position. This type of thinking plays directly into your perception of yourself and your self-worth.
Manulife has been studying the link between health and wealth since 2014. What they’ve found was in 2015, financial wellness was connected to productivity. In 2016, it showed that 40% of Canadians are financially unwell. I guess you’re not so alone after all…
In 2017, what has come to light through speaking with professional counselors is there are emotional barriers to financial wellness. People are embarrassed to share their financial woes, are ashamed and feel like they’ve failed. More than half the time people seek help, financial troubles are a part of it and only 1/3 of them see the connection between their financial struggles and their other challenges.
Financial worries can lead to physical manifestations of stress and create or amplify mental health concerns. This level of stress impacts the ability not only to be productive in the workplace, but sometimes to attend the workplace at all. In an average week, 500,000 Canadians miss work, and a whopping 30% of disability claims and 70% of disability costs are associated with mental health issues and illnesses.1
Organizations have the opportunity to provide resources to help. With the right group benefits plan and provider, employees can have access to comprehensive health benefits which include both physical and mental programs. Many of these plans also promote financial well-being and preparedness.
YourStyle Financial is an independent group benefits consulting firm. We offer a range of services geared to help our clients maximize the strength of the dollars they spend on benefits. Schedule a lunch and learn today or contact us.

‘Tis the Season… To be Penny-Wise

November 23, 2017

No, not the creepy clown from IT, more like Uncle Pennybags. As we head into the holiday season, it’s easy to fall into a spending spree with no regard for your financial state. In a time when wish lists are pervasive and the urge to impress is rampant, it’s more important than ever keep an eye on your bank balance. There are many ways to manage your holiday spending. The first step seems an obvious one – set a budget. Write down the list of people you need to buy for, those you like to buy for, your last minute “oh I got you something too” gifts and don’t forget all the incidentals such as food and decorations. Once you know how many gifts you need, set a reasonable amount of money you can afford without incurring unmanageable debt. Now you know how much you have to spend and how many gifts you need to buy. Set a number beside each person and item. Bring this with you when you go shopping and be sure to check it twice. The aforementioned plan is a great way to address holiday spending, however, an added step to this would be to start saving ahead of time. Start a holiday fund at the beginning of the year to help reduce the financial strain at the end of the year. It’s surprising how fast $20 per cheque can add up and how little you would miss it. If you put $20 per cheque in your stocking, by December you would have approximately $440 of disposable income. That’s a lot of cash with very little effort. Another area to be attentive to is holiday socializing. It’s surprising how these events can add a lot of cost to those who are hosting. Why not create an environment that is more in line with the spirit of the season and have everyone bring something? That helps distribute the cost and makes it more enjoyable for all those attending. While it is the season for giving, it’s important to remember to give to yourself. Your gift should be the gift of financial freedom. If you would like a little help on this, contact us.

Dividing Assets During Divorce

August 15, 2017

A couple of weeks ago, we talked about how to financially prepare for divorce. Facing the topic head-on, while it’s a tough row to hoe, knowing you’re not alone can help. According to Stats Canada, 43% of marriages end in divorce before the 50th anniversary. Reading that, you may think “Who would divorce after being married that long?”. The answer is anyone. Life affects everyone and when you share your life with someone, it affects them too. While knowing this doesn’t make preparing for the emotional impact of divorce any easier, planning your financial decisions ahead of time can put you in a better position to move forward. In life, moving on is the key to moving forward.

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How to Financially Survive Divorce

July 27, 2017

Most people have been exposed to divorce either directly or indirectly and can attest to the impact it has on all involved. Some people avoid the couple and some get far too involved. One of the most damaging aspects of divorce is the financial damage that can be caused if you don’t address the money side as soon as possible.
A “friend of a friend” had been married for a number of years when they found out their spouse was cheating. Emotionally devastated, this friend didn’t know the steps to take to protect themselves. So while they sorted through how they felt and where they wanted to go, their spouse was spending all their money and amassing a large amount of debt. By the time next steps were decided, this friend was now financially responsible for half of the debt.
If this were you, would you know the steps to protect yourself from that level of financial destruction? Did you know if you are directly involved in a divorce, one of the people that can help is your Financial Advisor. At YourStyle Financial, we can help you organize your financial information which will allow you to effectively and efficiently work with your spouse and lawyers. This can also help reduce legal fees, which assists in financial recovery. We’ll start the conversation with a Checklist-divorce-2017 and go from there.
This is just an inch in the well of information and assistance we are able to offer. We’ll be writing again soon on dividing assets and dealing with debts. If you think we can help, be sure to contact us in the early stages of potential separation or divorce.]]>

Insurance For Newlyweds

May 20, 2016

Joint policies may seem attractive because of the cost savings. But it doesn’t cost much more to insure each life individually, and you or your spouse receives double the payout. For example, if you and your spouse are 30 years old, a joint 10-year term first-to-die policy worth $1 million insures both of you and costs about $787 annually (2014 rates). The contract pays out upon the first insured’s death to the surviving spouse. However, you could purchase two $1-million contracts for an annual premium of about $849. And the total payout from both contracts would be $2 million. Complications with joint policies can arise if your marriage falls apart. A divorce doesn’t invalidate a contract, so if you forget to cancel it, your ex-partner could receive an unintended death benefit. Also after divorce, you and your spouse may have to purchase insurance individually (depending on the type of original policy), and if either you or your spouse’s health has worsened, it may be difficult to get new coverage. Already insured Your parents may already have bought you life insurance. In that case, parents usually pay the premiums and are the beneficiaries. The parents own the contract and you are usually appointed as contingent owner. If the parent dies, the ownership automatically reverts to you, the insured child. When you marry, the family needs to discuss when you should take over the premiums based on financial ability, and whether the beneficiary should be changed to the new spouse. Subsection 148 (8) of the Tax Act allows a tax-free rollover from a parent to a child insured under a life insurance policy. Your uninsured spouse should also purchase a policy, even if he stays at home to care for children, since you would have to pay for childcare if he dies unexpectedly. If you can’t afford permanent insurance for the uninsured spouse, you can purchase term insurance and convert it when your finances are healthier. Make sure the policy you choose has this feature. Health insurance If both you and your spouse work, your advisor can help you decide whether to opt out of one of your health plans. For instance, if you have a 50% co-pay in your health plan and your spouse is fully covered, you could opt out of the first plan. But it could also be advantageous to keep both plans in place. That way, you may first claim under your own plan and then under your spouse’s plan to get more or all of the health expenses covered. Spouses should talk finance A 2013 BMO survey shows most married Canadians wish they’d discussed financial matters before walking down the aisle. While 98% of Canadians agree they should be on the same page as their spouses, when it comes to finances, most of them aren’t. A whopping 40% of these couples say they have different investing styles from their partners. It’s not surprising, then, that more than half of Canadian married couples have financial regrets, with 62% saying they wish they had discussed their financial pasts and plans before getting married. Types of policies Joint policies insure two lives on one contract and are underwritten by combining the health and ages of each life. The premium is determined by the average longevity of the two spouses. A joint life first-to-die contract pays out when the first insured dies, while a joint life last-to-die policy pays out after the second death. A joint last-to-die policy is better if you want to leave money for heirs or cover taxes after death. To discuss this further or to book an appointment, contact YourStyle Financial today!

How To Shrink Your Interest Payments

April 13, 2016

Currently, there’s a lot of talk about what may happen if interest rates rise. So, chances are, you’re looking for tips on how to protect your income and balance your portfolio.

However, capturing money that’s wasted on inefficient interest payments should always be a priority. When it comes to cash flow planning, that’s one of the main ways people are able to save money and free up income. Paying more interest on debts than you need to can significantly affect your finances. So consider whether you’re falling into the following traps.

  • Mortgage myopia. You may assume your interest rates and mortgage payments will remain the same over a long period of time, or you may not know how to plan for fluctuating rates. As a result, you could fail to build interest rate-movement assumptions into your financial plans and projections.
  • Amortization risk. It’s easy to compare interest rates, so you may focus on doing only that when choosing mortgages and structuring your debts. Yet, amortization is one of the main variables you should consider, given it impacts the total repayment cost of your debts.
  • Lower rates aren’t always better. Paying 3% versus 4% interest may seem better, but there’s more to calculating the total costs of debts than comparing rates. Along with looking at amortization risks, you need to review all of your repayment options, as well as the total cost of debts over your lifetime.
  • Other debts. What matters is the total average rate that you pay over all debts. So, you can consider whether combining all of your debts is more cost-effective.

Just as you can save money through tax planning and insurance solutions, you can protect your income through cutting down on inefficient interest payments. Through cash flow planning, you’ll better understand the importance of paying down debt principals quickly, as well as how to reduce exposure to fluctuating interest rates. As published in Advisor.ca December 22, 2015

Why Baby Boomers Go Back To Work After Retirement

February 12, 2016

Retirement is meant to be a time to kick back and enjoy your golden years. It’s a time to relax, to travel and do the things that you’ve been dreaming about. As wonderful as this sounds, it may not be possible for many Canadians nearing their 50’s and 60’s. A lot of baby boomers in Canada today are faced with more financial stress than ever before. For many of these Canadians, the necessity of returning to the workforce after officially retiring has become an unfortunate realty. Many simply can not afford to retire. With monthly payments such as mortgage, vehicle loans and credit cards, it may just not be possible. Other factors that could be preventing retirement may include providing financial support to family members or divorce. Also, with the cost of living increasing each year, it may be difficult to live on pension alone.

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Investment Terms You Should Know

December 23, 2015

It’s always good to be well informed when dealing with your finances. Knowing these basics will help, especially if you are new to investing. What is a Financial Advisor? You want to get help with financial advice from a Financial Advisor, but who will you turn to? Advisors can specialize in different areas including investments, tax and estate planning and insurance or one Advisor can provide all of these combined services. Advisors can be paid by salary, commission, fees or a combination of commission and fees. Advisors work at banks, insurance carriers or independent firms and must be registered with an industry regulating agency. A good way to ensure you are dealing with a reputable advisor is to check out their credentials and experience.

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How healthy will you be in your golden years? Long Term Care Insurance may be the solution.

September 25, 2015

Do you and your loved ones have enough funds to last through the golden years? Will you be financially secure if you outlive your savings? How will you cover the costs in the event that you require care? Issues such as these should be taken into consideration so that you are financially prepared for the future. Careful planning helps with peace of mind without having to place a burden on family and friends down the road. According to the chart below, the average cost of Long Term Care (LTC) in Canada is $61,500. These ranges cover the cost of care for couples at different income levels. The starting income level is $22,394 (very low) and the highest income level is $184,500 (three times average).  Average is $61,500. Source: N. Fernandes and B. Spencer, “The Private Cost of Long-Term Care in Canada: Where You Live Matters,” Canadian Journal on Aging 29 (3), 2010.

ProvinceRange of LTC costs for married seniors who are both in care
Alberta$16,548 to $24,021
B.C$16,864 to $36,500
Manitoba$21,682 to $50,882
New Brunswick$18,756 to $51,100
Newfoundland$19,394 to $43,297
Nova Scotia$15,906 to $57,670
Ontario$19,201 to $28,541
P.E.I$19,922 to $47,450
Quebec$17,882 to $24,314
Saskatchewan$20,246 to $43,848

When planning for your retirement, you have to keep in mind that you may need to cover the cost of care. These costs can be due to an illness, accident or diminished physical or mental capacity. Your investments and retirement savings may not be enough to cover these expenses. Activities of Daily Living (ADLs) is a term used to refer to people’s daily activities. Think of the activities you do to get your day started:

  1. Climb out of bed
  2. Use the bathroom
  3. Take a shower
  4. Get dressed
  5. Brush your hair
  6. Have breakfast

If you are unable to perform two out of the six activities and own Long-Term Care insurance, you could qualify to receive benefits. Long Term Care benefits provide an additional source of income that can help when you need it the most.  Long Term Care is a tax-free monthly benefit to help supplement your savings, provincial and private health insurance coverage. Eligibility for Long Term Care does not depend on admission to a care facility nor do you have to obtain any receipts for the care received. You have the freedom to use your benefit the way you see fit. Contact YourStyle Financial if you would like assistance with planning your retirement for you or a loved one and to discuss if Long Term Care coverage is right for you.

What you should know about TFSAs

August 26, 2015

Tax Free Savings Accounts (TFSAs) are registered savings plans with the ability to earn investment income that is tax free. These funds can provide security for the future and financially prepare you for retirement. Other registered savings plans include Registered Retirement Savings Plans (RRSP) and the Registered Education Savings Plans (RESP). Anyone who is 18 years of age or older, is a Canadian resident and has a Social Insurance Number can open a TFSA.

Contributions

Did you know that as of January 1, 2015, the annual contribution was increased from $5,500 to $10,000? Only 14% of Canadians are aware of this fact. Contributions of up to $5,000 per year for 2009-2012; $5,500 for 2013-2014; and $10,000 for 2015 can be deposited. Unused contribution room (the maximum amount you can contribute to your TFSA) can be carried forward to following years. More than half of Canadians who have a TFSA only contribute once a year; however, there is no limit to the number of contributions made in a year as long as you do not exceed your contribution room. Penalties will be assessed for over-contributions.

Withdrawals

When a withdrawal is made, you are able to replace the amount within the same year if you have available TFSA contribution room. You can determine your TFSA contribution room through the Canada Revenue Agency. Any income earned in the account whether it be interest income, dividends or capital gains is sheltered from tax as long as it stays in the TFSA. Government benefits and credits such as Old Age Security (OAS), Guaranteed Income Supplement (GIS), Employment Insurance (EI) and Age Exemption Tax Credit are not affected or reduced as a result of income earned in a TFSA. The income earned also does not affect your eligibility for federal credits such as the Canada Child Tax Benefit (CCTB), Working Income Tax Benefit (WITB) and Goods and Services Tax/Harmonized Sales Tax Credit (GST/HST). If you are interesting in learning more about Tax Free Savings Accounts, contact YourStyle Financial.

So you’re getting married?

August 07, 2015

You’ve found “the one” and have decided you will spend the rest of your lives together. You may have talked about growing your family, a new house and other plans for the future but have you thought about how you will achieve those goals? Marriage is a partnership and you need to know how you can achieve those goals together. Discussing your finances may not be a conversation that you want to have but it is necessary to avoid issues that may arise later. Debt, for example is one of the most important things a couple should discuss. Do you or your partner have any outstanding debt? If yes, does your partner know about it? Are you aware of each other’s income? Whatever the case may be, you need to communicate with each other and be open about your finances. A recent BMO survey shows that most married Canadians wish they had discussed their financial matters with each other before walking down the aisle. While 98% of Canadians agree they should be on the same page as their spouses, when it comes to finances, most of them aren’t! A whopping 40% of these couples say they have different investing styles from their partners. It’s not surprising then, that more than half of Canadian married couples have financial regrets, with 62% saying they wish they had discussed their financial plans and pasts before getting married. Use our Marriage Preparation Checklist to discuss with your partner to ensure your plans for wedded bliss include financial matters. For help with your financial planning, give us a call.

Do you have a plan for debt elimination?

May 06, 2015

When most people think about retirement planning, they think of building a retirement nest-egg through RRSPs and pension plans. While these are key pieces of the puzzle, it’s important not to forget about another important element of retirement planning – debt elimination. After all, the less you spend on interest payments, the more you can allocate to your retirement savings. A debt-elimination plan doesn’t have to be complicated. But you should have one or you’ll likely be in debt longer than you have to. There are a few simple strategies for getting out of debt sooner, such as:

  • Building extra debt payments into your budget.
  • Consolidating all of your debts at the lowest rate possible.
  • Using your income and savings to automatically reduce your debt (without giving up access to that money).

When you’re planning for retirement, don’t forget about the impact that your debt has on those plans. With a strategy for becoming debt-free sooner, you may even be able to retire earlier than expected. I’d be happy to help you develop a debt-elimination strategy that complements your overall retirement savings strategy. Give me a call if you’d like to discuss how you can be debt-free sooner.

Help out the kids without hurting your retirement

April 10, 2015

As parents, we want nothing more than for our kids to succeed. Often, we wish to give our children a “leg up” in their transition to adulthood by helping them out with larger expenses, such as tuition for post-secondary education, a down payment on a home or even a reliable vehicle. If you find yourself in this situation, be sure to carefully consider where you take that money from so that helping your kids doesn’t hurt your retirement. For people who don’t already have savings set aside for their kids, such as an RESP or a savings account, there are generally two options: 1. Retirement savings. Tapping into your retirement savings may be the quickest way to access cash but it could have some undesirable consequences. For example, you’ll be charged taxes on a withdrawal from your RRSP and you’ll lose that contribution room forever. You’ll also forego any future growth on the amount you’ve withdrawn, which will most likely mean you’ll have less money available at retirement. 2. Home equity. Some people are reluctant to take on more debt in the years leading up to retirement. However, using a home equity line of credit to help out your kids may be the wiser choice in some instances. Here’s why: you won’t be charged any tax when you access your home equity and your existing retirement savings can remain intact and continue to grow. Some accounts will even allow you to track different portions of your debt separately. This can be particularly useful if you’re providing money to more than one child and/or if you wish to track the interest charged for different portions of the debt. We all want to help our kids succeed. By carefully considering how you help, you can help to ensure you don’t compromise your own future financial security. If you’d like to help your kids with a large expense, give me a call and I can help you determine which option makes the most sense in your specific situation.

First Time Home Buyers

Tax Rules for Home Buyers

March 10, 2015

If you’re one of the many Canadians who dream of home ownership, and you’re working hard to make this goal a reality, you should know that the Canada Revenue Agency has two programs that can help you get there faster.
There is the First Time Home Buyers’ Plan. Because the required down payment on a house purchase can be a stumbling block, the government will actually let you borrow the money to put down on your dream home – from yourself.

Under the rules of this program, you are allowed to take money out of your RRSP to help buy your home – up to $25,000. This money will remain sheltered from tax, so long as you pay it back within 15 years. This is a great way to put your retirement savings to work for you today, without the considerable tax consequences of withdrawing it outright. The only downside is that you won’t be earning interest on your investment, but that might be outweighed by the interest cost saved by using your own money instead of a loan.

Another helping hand for new homeowners from the CRA is the First-Time Home Buyers’ Tax Credit on your tax return. It’s a non-refundable tax credit that can put money in your pocket by reducing the amount of tax you owe for the year in which you buy your house.

Both of these programs are for first-time buyers only, and are designed to help you get yourself into the real estate market. If you have questions about these programs (or any other areas of estate planning or financial management), contact YourStyle Financial Inc. We take the financial stability or our clients very seriously, and can help you get your financial house in order, so you can get into the house you want.

We’re more than an investment company – we tailor financial plans individually, to fit each one of our clients. If you’re thinking about jumping into the real estate market, we can help make sure you do it with both eyes open.

Manulife’s Are you ready? – The Meeting

February 27, 2015

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