We hear a lot about financial literacy these days as Ottawa promotes its efforts to educate Canadians about money management, saving and investing. Clearly, the first steps begin with our kids, and not just in the classroom. Parents, grandparents, and other caregivers can provide some of the building blocks to economic maturity by sharing their own experiences with money. Here are 3 ways you can help them understand basic financial concepts. Let them manage their own income. It’s important for your kids to have their own money to manage – and mismanage. They will learn a lesson (albeit painful sometimes) when they spend their entire allowance on an impulse purchase. Help them set goals and allocate their money. Set goals for donating, savings and spending and give them separate piggybanks to allocate the chosen portion of the money they earn. Show them the power of compound growth. Open a savings account, GIC or other ...
Got a refund? Think RRSP If you anticipate receiving a tax refund, you may already be dreaming about how to spend it – maybe a trip or a new IPad. Here’s a better idea: use your refund to top up your RRSP (Registered Retirement Savings Plan) and enjoy a bigger nest egg when you need it. If you contribute now for the current year, you will be putting your money to work almost a year earlier than those who wait until the the last minute. You will maximize the tax savings and tax-deferred growth that make RRSPs so attractive in the first place. Let’s say your reinvest your tax refund of $2,000 in your RRSP. You will then have a $2,000 tax deduction for 2010 representing a $700 tax savings (assuming a 35% marginal tax rate). Not bad for reinvesting the government’s money! If you invested this $2,000 tax refund for 30 ...
Long term care services address the health, social and personal care needs of individuals who have lost the ability to care for themselves. While a certain degree of public support is available, government programs are not comprehensive and long term care services can be costly. Long term care insurance (LTCI) helps to pay for the care of services that other plans don’t provide, or works to bridge the gap between what is provided and the extra care or services you might prefer. LTCI helps to cover the costs, meaning: You have more choices around the kind of care and amount of care you'll receive. Either professionals or family members can provide care. Your savings and investments can be preserved. There are many misconceptions about what the government provides and pays for, and what extended ...
It is great to see that we are moving further towards consumer education and financial literacy in our country. A large part of our jobs as financial advisors is to raise the education and awareness of our clients, so they are more comfortable making decisions and more importantly, sticking to their decisions. A new guide has been released that helps consumers understand the basics of insurance. Here is a clip from the FCAC's recent Press Release: "The Financial Consumer Agency of Canada (FCAC) is officially launching its new publication, Understanding Insurance Basics. This publication provides a definition of insurance, and explains how it works and why we might need it. "Insurance is an important part of financial planning, but the field may sometimes be daunting," says FCAC Commissioner Ursula Menke. "This new publication is a starting point for your research: it describes the most common types of ...
Take a few minutes out of your busy day to really listen. Our own Deborah Wood introduces you to one of her longest standing, and most grateful clients.
www.SmallBizAdvisor.ca, brought to you by the editorial teams at Benefits Canada and the Advisor Group, goes live today. This one-stop destination for advisors with small businesses or entrepreneurs as clients addresses important issues surrounding the group benefits and retirement industries from the small business perspective. Featuring regular news articles and in-depth features on relevant small business topics written by Canada’s top experts in the group benefits and retirement markets, www.SmallBizAdvisor.ca is poised to become the go-to resource for Canadian small business advisors. Creative Planning Financial Group's president, Rob Franklin, and Darren Hanser provided www.SmallBizAdvisor.ca with two articles which can be found by following these links: Article 1: Introduction To Taxation Of Group Benefits Article 2: A Benefits Plan Or Larger Salary? Visit www.SmallBizAdvisor.ca today to read these and other stories.
With the current economic uncertainty, many people are looking for ways to reduce expenses. A relatively painless way to reduce your monthly expenses is to have a second look at the way you’re managing your debt. Over time, most of us take out a variety of loans for different purposes. These can include things like credit card debt, car loans, home renovation loans and, of course, the mortgage. And if you have more than one loan, you’re most likely paying a different interest rate on each loan. One of the easiest ways to reduce your monthly interest costs is to consolidate your debt at the lowest rate. Typically, your lowest-rate debt will be a loan that is secured by an asset, such as your home. If you have sufficient equity built up in your home, consider switching to a product that allows you to access your equity, such as a home-equity line-of-credit. ...
Provided by: Joan Morrow & Jay Llave, advisors at Creative Planning Financial Group Last June’s unexpected death of music icon Michael Jackson offers good lessons on estate planning. What he did right Jackson had a will. Many people do not. In Canada, if there’s no will, the provincial law is applied for distributing wealth and it’s up to the courts to select a guardian for minor children. Jackson’s will was revised in 2002 after the birth of his youngest child. A will should be reviewed after every major life change and whenever property is acquired or sold. Jackson named competent executors. He named a guardian for his minor children and an alternate to replace that guardian, if required. The will establishes a trust for his three children. Testamentary trusts enable parents to set standards for care and ensure their children are looked after. Trusts can save tax for the beneficiaries. Trusts make it harder to challenge the ...
By Joe Gilinsky, FCIS, TEP, RHU I had insured a client and his wife 8 years ago as it was their wish to protect their mortgage in the event of death so that the survivor would be in a position to retire the mortgage if he or she chose to do so. They had decided to insure themselves independently so that they would be the direct beneficiaries of each other’s insurance instead of the bank being in control of the funds. At the time of claim, it frequently is to the survivor’s benefit to receive and deal with the insurance proceeds to suit the needs of the claimant. In the interim, the husband had assigned the policy on his life to his business bank in order to secure a Business Line of Credit where the outstanding balance owing to the bank will be taken from the insurance proceeds and the residue, if ...
In support of the Daily Bread Food Bank's annual holiday food drive, we will be organizing a group from CPFG to help sort food at the Daily Bread Food Bank on December 9th from 12:00 noon to 4:00pm. The Vision and Mission of the DBFB: Fight to end hunger in our communities Provide food and resources for hungry people Mobilize greater support, involvement and action Create social change to reduce poverty through research, education and advocacy Visit the Daily Bread Food Bank's website directly to find out more about what they do and how you can help provide food for those in need.
The past week was full of discussions about the impact of financial advice on Canadians, the regulation of financial advice in Canada, and many other topics of interest. Advocis (The Financial Advisors Association of Canada) held a symposium on The Regulation of Financial Advice in Canada. Speakers included Presidents and CEOs of the Investment Industry Regulatory Organization of Canada (IIROC), Investors Group, the Alberta Securities Commission, Executive Director of the Insurance Council of British Columbia, and many other influential leaders. The lunch session included an address from The Honourable Dwight Duncan, Ontario Minister of Finance. The topic of commission disclosure around the world and hightened consumer financial literacy were a large focus of the day. We have included links to some articles posted following the symposium, along with others that include valuable information on current issues in the financial services arena. IFIC Report: "The Value of Advice" No need ...
We are constantly receiving information from the insurance and financial industry. We are going to now post a weekly summary of pages we feel will impact our clients. These may include updates from our partners at the insurance carriers, updates on tax related issues from industry associations, or just interesting thoughts from our peers. Here are some from the past week: 1. The results from the latest CPP Actuarial Report concludes that the current legislated contribution rate is sufficient to meet the CPP's future obligations: 25th Canada Pension Plan Actuarial Report 2. Women, as main caregivers, take a hit in retirement. This is a great article outlining the experience of when Dr. Amy D'Aprix, coincidently a gerontological social worker, spent a decade caring for both of her parents. Globe and Mail Article - "Women And Retirement" 3. In a special to the Globe And Mail, Preet Banerjee discusses the ...
Of course it is! Often quoted pension actuary, Malcolm Hamilton, finds in the Nov 27, 2009 Retirement Savings Research Program that for a 65 year old opposite-sex couple: at least one will live to approximately age 90; approximately 10% of couples will have one partner that lives 8 years beyond the normal life expectancy; approximately 1% of couples will have one survivor who lives 14 years beyond the normal life expectancy. That's impressive! What does this mean to you? Couples entering retirement at age 65 can expect to have at least one partner still receiving income at age 90. That's 25 years of income that needs to be provided by all sources. This could be from the Canada Pension Plan, Old Age Security, RRSP/RRIF income, private pensions and other investment assets. In partnership with Investor ...
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by Joe Gilinsky, FCIS, TEP, RHU When people ask me what I do for a living, my usual answer is: “I assist people to protect their families, their incomes, their businesses and their estates with the effective use of life insurance should they die too soon, live too long or become disabled and critically ill along the way.” As a result of hardships experienced by certain of my clients in recent years, I have realized that this act of “Protection” in our business has a far greater meaning than merely placing the insurance in force. I have always felt that we insurance advisors are the only people who deliver cheques to the bereaved whereas many others deliver only bills! I have a young, married client of 40 who cannot practice as a veterinarian because of a debilitating illness. However, the cheque that he receives each month as a result of his disability income policy ...
There are changes with permanent life insurance pricing coming in the next few months. One Major carrier has given us advance notice that there is to be approximately a 10% average increase in rates for all permanent life insurance; This 10% average means that some age groups will see no changes, but others will see very significant increases in pricing (20%-40%)! The same carrier will be implementing a 0.5% reduction to the contractual guaranteed interest rates offered within tax sheltered policies. (The guarantee is contractual for life); In the past few years, there has been an expectation that insurance rates would be increasing, as a large assumption in pricing these policies is the interest rate environment; Background can be found in a recent report by the Conference for Advanced Life Underwriting (CALU): CALU InfoExchange - Buyers Market For Level Cost With historically low interest rates, the insurance industry has been waiting for some ...
Why start the discussion? Owners of small businesses and other key executives spend a lifetime to acquire the knowledge, experience, judgment, reputation, relationships and skills that make them valuable to the business. When these people are taken out of the business due to death or illness, the business loses a key member of the management team which in most cases, has a severe financial impact. What are some of the issues when losing a key person? lenders may cut back credit creditors may press for immediate payment debtors may delay making payments employees and customers may lose confidence, and competitors may take advantage of the situation. In small business situations, finding an immediate replacement with the same qualifications as a deceased or ill key person is difficult and can be expensive. How do businesses replace this expertise? This is a difficult endeavour, as it is often necessary to look outside of the business to find a replacement. If anyone has ...
This is a great question as life insurance provides protection where other asset classes may not. The right to designate a beneficiary under a life insurance contract must be taken seriously, as there are different rights and protection available depending on who is named, and how they are named. Beneficiary Designations: Irrevocable: Where a beneficiary is designated as “irrevocable” the owner has in a way given control over to the beneficiary. The owner may not surrender that contract or make any other changes that would impact the potential benefits of the policy without the consent of the irrevocable beneficiary. A creditor would not be permitted to force the owner to surrender the contract during the life of the policy. At death, the death benefit would be paid directly to the irrevocable beneficiary so that the proceeds would not be subject to the claims of creditors of the owner of the policy. Revocable: Where ...
We are proud to introduce Insure Right - five steps that will provide clarity about your insurance needs. Ask yourself this: “If I die suddenly, will my family have enough money to maintain their current lifestyle? What if I become critically ill or can’t look after myself? Who will pay the bills or look after me?” Anything can happen. That’s why it’s important to get all the coverage you need to protect your lifestyle, your family and everything you’ve worked hard to achieve. Knowing that buying life and health insurance can be a daunting task, we have decided to make it easier for you, with Insure Right: five steps to help you determine the right life and living benefits insurance coverage for your specific needs. REVIEW THE 5 STEPS WHEN YOU ARE READY TO LEARN MORE, CONTACT A CREATIVE PLANNING ADVISOR
If you are a shareholder of an incorporated business and considering life insurance, you may have wondered “Should my life insurance policy be personally owned, or through my corporation?” Unfortunately, the only true answer to this question is “it depends”. Unless specifically restricted, all individual life insurance policies can be personally owned or corporately owned and the correct choice for you will depend on the following factors: What is the purpose of the insurance? Who will ultimately receive the proceeds of the insurance? How quickly will the funds be required after death? Are there creditor protection concerns within the company? Are there any liability concerns? Are there any family law concerns? Let’s explore some of the reasons a business would require life insurance: Key Employee Protection – companies will buy life insurance to protect the business in the event that there would be a financial loss if a key employee were to die or become disabled. Buy/Sell Funding – ...
By Joe Gilinsky, FCIS, TEP, RHU “Insurance companies are in business to make money and not to pay claims”. “How can I be sure that my policies will pay out if I die or become disabled?” These are concerns of many people whom I have met and served during my 27 years as a Life and Health Insurance advisor. Several have had experiences where insurance claims were denied outright or circumstances where the claimants had to wait many months and sometimes years for payment of their claims. It is therefore understandable that claims for unpaid “Insurance” proceeds cause great concern and aggravation amongst the insurance buying public. I am here to dispel this concern particularly about Life, Disability, Critical Illness and Long Term Care Insurance where it is indeed a myth that the insurance companies avoid paying claims by any means possible. I have not enjoyed my involvement in the paying of claims ...
CLU Comment - May/Jun 2010 <-------- Click to open The CLU Comment is a publication distributed by CLU Institute®. The most recent issue (May/June 2010) outlines what is taxable in the event your life insurance policy is “disposed of”. Also there are recent proposals that may alter the way life insurance policies are valued when donated to a charity. Both of these topics and more are discussed in this issue. If you have questions or comments about the material provided, please call our office. We look forward to speaking with you soon. Background Information: DISPOSITION OF A LIFE INSURANCE POLICY Income Tax Act references: Subsection 148(1) – amounts included in computing policyholder’s income [on disposition of a life insurance policy] Section 54 and subparagraph 39(1)(a)(iii) – [exclusion of a life policy (other than a segregated fund contract) from the definition of capital property] Paragraph 56(1)(j) – life insurance policy proceeds [inclusion in regular income] Subsection 148(4)– income from ...
Based on the traffic reports on the 400 every week, there are a great number of families preparing for trips up to the family cottage. Over the past few months, we have been getting into conversations about cottages, and they have now expanded to include much more than what was on the barbecue this past weekend (which was delicious). Whether you own a cottage, or will eventually inherit one, an open dialogue is important. There’s no argument here – the following problems are all nice to have! There are many things to consider in any plan that involves family and different generations, but perhaps the most difficult is just starting the conversation. This is a very awkward subject for some families, where Children may feel especially uneasy opening up this subject with their parents, but it’s in everyone’s best interest to deal with any issues early on. In fact, many parents find ...
When you are approved for a mortgage, your lender is obligated to offer you mortgage insurance. That may seem convenient and honourable, but… before you say yes to mortgage insurance, you should know what buying creditor mortgage insurance really means. Here are some key areas to consider: What’s the difference? I can save so much money by using the bank – AND I don’t have to give blood! Individual insurance plans require you qualify medically BEFORE you can receive your policy. This means that the insurance company is fully aware and comfortable with insuring you. If you have creditor insurance and need to claim for an illness or death, the bank will NOW start to investigate your health history… and have the freedom to deny a claim if you incorrectly answered one of their questions. If you file a successful claim, the BANK is the automatic beneficiary of your certificate. By using Private / ...
Did you know that 1 in 3 people, on average, will be disabled for 90 days or longer at least once before age 65. The average length of a disability that lasts over 90 days is 2.9 years. What would that mean to your income and lifestyle? Here are a few questions we get from clients, as well as questions we want our clients to be asking of us. Who needs Disability Insurance? Most people need some kind of coverage, which will replace most of their usual income in case they cannot work due to disability. When people without disability insurance become disabled, income stops or is reduced, and savings are drained. Some exceptions are those with high levels of investment income, students, or individuals whose spouse continues to provide enough income to cover all existing, and any new, expenses. Do I need both ...
Critical illness insurance is a form of financial protection that provides a lump-sum payment in the event of the diagnosis and survival of a serious illness. Here are a few questions we hear on a regular basis: I’m in great health - Why Do I need Critical Illness Coverage? There are several factors to consider when making the decision to purchase Critical Illness insurance: Anyone can become critically ill - and survival is more likely than ever because of advancements in medical science Not all medication and surgical procedures are covered by government health plans There may be gaps in employer-sponsored group coverage Most Canadians are not prepared for the impact a critical illness would have on their finances There may be tax consequences associated with withdrawing funds from retirement savings to fund recovery How many Canadians actually get sick each year? Every year in Canada, ...
Since all of our insurance and investment advisors are independent, and partner with our firm by choice, our clients wonder who CPFG is, and why our advisors choose to operate under our banner. To answer this question, it is important to clarify who we are not. We are not owned by an insurance company or a bank – we are 100% independent. Although we may have great relationships with some insurance and investment companies, we are not married to one, and in actuality, work as advocates of our clients when dealing with insurance companies – from a new policy to helping work through the claims process. Visualize a boutique law or accounting firm – there’s usually a group of partners who either started the firm or are its new leaders, they manage their practices and clients as well. A team of highly skilled associates manage and build their practice, and may be ...
Thank you for visiting our blog! This is officially the first posting of many. We hope to share relevant information, new developments from our industry, and profile the solutions we can bring to the market. An open dialogue between our firm and you, our valued clients, professional partners, and the public, is our ultimate goal. Please send us your comments and questions – this is a place for you to get answers. We pride ourselves in being the advisors of choice for successful individuals, private business owners, and wealthy retirees. Communicating with you and being able to receive feedback in an open forum will allow us to provide better service and advice – in our continuing effort to improve and satisfy the needs of our clients. Thank you again for visiting. Visit our website
