Monday, April 30, 2012

Changes to "Guaranteed Income for Life" products

The Ever Changing World Of Investments

Since the guaranteed lifetime withdrawal benefit products (GLWB) first made its debut, investors have been gravitating towards this "Guaranteed Income for Life" product as an alternative solution for their retirement plans; especially in these troubling economic times, However, as the adage goes, "all good things must come to an end", and we are now starting to see life insurance companies, modify, recede, and now even exit this investment product.

Market conditions over the past four years have left everyone worrying and scratching their heads as to where to put their retirement savings. Even Bonds and GICs, the once stronghold of the fixed income market for the ultra conservative investors, can no longer provide the same level of income with the low interest environment. There is no wonder as to why we are seeing an increasingly amount of GLWB sales in 2012.

However, financial markets have not been as responsive to the recovering global economy as analysts had hoped for, and as a result of this, life insurance companies have now started to modify, recede, and even exit from this investment product.

The main reasoning comes from a continuing low interest rate environment, market volatility and slow recovery. Sustainability and capital reserves requirements set out by FSCO (or as Insurance companies like to call "RISK") cannot be met. I am convinced that there will be other closures in the near future.

If you are a Conservative Investor or a Risk Adverse Investor now is the time to investigate this product group. Where else can you get guarantees that your principle is protected and that you cannot outlive your money? This product is ideal for people who do not have a pension plan from work. Check it out before the guarantees are gone.

Give me a call or send me an email and I can discuss your specific situation with you.

Sunday, April 1, 2012

Tax Tips

April 30, 2012 is the deadline to file your taxes if you're an employee and it is also the deadline for self employed people to make sure that the CRA has received full payment of their outstanding balance. Therefore, here are some tips to help you complete your tax filing. Please contact your accountant, tax preparer or the CRA if you have specific questions.

The CBC has listed 9 tips to save you money at tax time. Included are:
1. Be sure to take advantage of all income-splitting and pension sharing opportunities.
2. Don’t assume that you don’t need to bother filing a tax return because you have no income.
3. Be sure to transfer any unused credits – including Child Tax Credit, Tuition Credits and Donations.
4. Know the limits of using tax software or online tax filing programs.
5. Be sure to claim all eligible medical expenses. Note: only expenses that exceed the lesser of $2,052 or three per cent of net income can be claimed. But there’s a long list of expenses that qualify, so it’s often not too difficult to reach that threshold, especially for the lower income spouse.
6. Take advantage of the new tax credits – including:
a. non-refundable Children’s Arts Tax Credit – maximum of $75 per child
b. The Volunteer Firefighter’s Tax Credit
c. Family Caregiver Tax Credit – beginning next year
d. TFSAs – if you withdraw funds, they cannot be replaced until the following calendar year
e. Examination fees now qualify for the tuition tax credit
f. 2011 budget also loosened the restrictions on transferring investments held in one sibling’s Registered Education Savings Plans (RESP) to another sibling’s RESP
g. RDSP withdrawals no longer trigger refunds of grants and bonds paid in the last yen years if a doctor certifies that a plan recipient isn’t likely to survive for five years
7. Keep good records.
8. Be proactive with your taxes.
9. Be sure to report all T-slips.

For more information on these items – check out the original article .