Thursday, June 7, 2012
A list of documents you need to gather
Can you imagine what would happen if you died and your beneficiaries didn’t know where to find your will? Or your money? To make sure this doesn’t happen to your family, always have the following key documents safely stored together in a place where they can easily be found:
1. Your will: Outlines who gets what when you die. It also appoints guardians for your underage children. Without a will, your assets will be divided according to provincial law, not your own wishes. Worse, your children might end up not living with the guardian of your choice.
2. A living will: Spells out how you want to be treated if you are unable to make decisions about your own health (i.e., whether you want to receive life-sustaining treatments like respiration or resuscitation or whether you want organs donated).
3. A power of attorney: Gives someone the power to make financial decisions for you in the event you’re no longer able to do so. Without this document, the courts will have to appoint a guardian to look after your affairs, and that can take a lot of time – and money. NOTE: You should ensure that there is a second signature on all of your bank accounts as well.
4. Proof of ownership: Gather together all documents that show you own your house, land, vehicles, stocks and any other assets. Without these, your family might not know what you own or be able to prove it.
5. Three years of tax returns: Tax returns give your executor a sense of the assets and finances that are part of your estate.
6. A list of bank accounts and safety deposit boxes: According to the Bank of Canada, there are approximately 1.3 million unclaimed balances in Canada worth some $465 million. You want your family to be able to find your money – show them where it is by listing all your accounts.
7. Stock certificates and savings bonds: Hang onto your investment account statements and store them safely with your certificates (if you have any on paper), so your family can easily determine exactly what you own.
8. Pension, retirement and annuity documents: Help your family access any remaining retirement benefits they are eligible for through your retirement plan. If you’re getting money from an annuity, the contract will help your beneficiaries understand what they are entitled to and from which company.
9. Insurance policies: You bought insurance so your loved ones would be financially covered when you die, so be sure to keep copies of all insurance-related documents on hand so your family will know what policies you have.
10. A list of your debts and loans: A list like this will ensure your family won’t end up having any unwanted surprises down the road, such as debts they did not know about.
11. Marriage licence and/or divorce papers: Legal proof of marriage and divorce can make it easier for the executor of your estate and for your family.
12. Your user names and passwords: With social media and online accounts becoming increasingly important, you want to be sure your loved ones will be able to access your accounts.
13. Contact information: Do you have a lawyer, financial planner, or other professionals who assist you.
Make sure that their names and contact information are also listed.
Review your list once a year to ensure that it’s kept up to date.
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.
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 .
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 .
Friday, March 30, 2012
Highlights of the 2012 Federal Budget
The budget will:
• Gradually raise the age of eligibility for Old Age Security from 65 to 67 beginning in 2023.
• Give people the option to voluntarily defer taking your OAS pension, for up to five years, and receive a higher, actuarially adjusted, annual pension as a result.
• Adjust the RDSP to make it easier to open accounts for mentally challenged individuals; permit parents, who save in a Registered Education Savings Plan (RESP) for a child with a severe disability, to transfer investment income earned in an RESP on a tax-free (or “rollover”) basis to a RDSP, provided the plans share a common beneficiary;and to relax the rule to provide greater access to RDSP savings for small withdrawals
• Contain no new taxes or tax increases.
• Eliminate the penny.
• Reform regulation in the resource industry, including amending the Canadian Environmental Protection Act.
• Allow Canadians to claim more goods duty-free at the border. The limit after 24 hours goes from $50 to $200; for 48 hours it goes up to $800.
• Cap EI premium rate increases to 5 cents a year until the fund is balanced again.
• Eliminate 19,200 government jobs over three years, including 600 senior executives and 7,200 through attrition.
• Cut $2.1 billion from the Department of National Defence over the next three years.
• Cut funding to the CBC by 10 per cent over three years totaling $115 million.
• Cut funding to Elections Canada by $7.5 million a year starting in 2012-13.
• Give $5.2 billion over 11 years to the Canadian Coast Guard.
• Provide $450 million for sports facilities in the Greater Toronto Area for the 2015 Pan American and Parapan American Games.
• Tell consumers to complain directly to food companies about product labelling.
• Give $67 million to the National Research Council to refocus on "business-led, industry-relevant research."
• Streamline overall regulatory reviews of major economic projects.
• Provide $275 million to build and renovate schools on reserves.
• Pass legislation to create standards for First Nations education.
• Refund $130 million in application and processing fees to skilled foreign workers stuck in immigration limbo.
• Raise the retirement age of public servants from 60 to 65, for new employees beginning in 2013.
• Increase employee-contribution levels to pension plans for those working in Canadian Forces, RCMP, Public Service Commission and parliamentarians.
• Make the Governor General pay income tax beginning in 2013.
• Shut down the Public Appointments Commission, Assisted Human Reproduction Canada, and the National Round Table on the Environment and the Economy.
• Sell official residences abroad, generating $80 million in revenue.
• Standardize all government emails to one system.
• $205 million over one year for Hiring Credit for Small Business.
• Give $50 million over two years to Youth Employment Strategy.
• Give $150 million over two years on Community Infrastructure Improvement fund
• Give $105 million next year to Via Rail for operational and capital projects.
• Give $101 million over next five years for Esquimalt Graving Dock.
• Give $50 million over two years to protect wildlife at risk.
• Give $8 million to clean up low-level radioactive waste in Port Hope and Clarington, Ont.
• Provide $44 million over two years to the Canadian Grain Commission to reform their funding model.
• Provide $13.5 million over two years to improve pipeline safety.
• Give $35.7 million over two years to improve tanker safety and inspections, emergency preparedness related to oil spills and updated charts for shipping routes.
• Announce a new global commerce strategy in 2013 that sets trade priorities.
• Provide $9.6 million over three years to the RCMP to fight counterfeiting.
• Give $ 99.2 million over three years to help the provinces create permanent flood mitigation measures.
• The Government has found $5.2 billion in ongoing savings from departmental spending or less than two per cent of federal program spending.
If you would like additional information, feel free to email.
• Gradually raise the age of eligibility for Old Age Security from 65 to 67 beginning in 2023.
• Give people the option to voluntarily defer taking your OAS pension, for up to five years, and receive a higher, actuarially adjusted, annual pension as a result.
• Adjust the RDSP to make it easier to open accounts for mentally challenged individuals; permit parents, who save in a Registered Education Savings Plan (RESP) for a child with a severe disability, to transfer investment income earned in an RESP on a tax-free (or “rollover”) basis to a RDSP, provided the plans share a common beneficiary;and to relax the rule to provide greater access to RDSP savings for small withdrawals
• Contain no new taxes or tax increases.
• Eliminate the penny.
• Reform regulation in the resource industry, including amending the Canadian Environmental Protection Act.
• Allow Canadians to claim more goods duty-free at the border. The limit after 24 hours goes from $50 to $200; for 48 hours it goes up to $800.
• Cap EI premium rate increases to 5 cents a year until the fund is balanced again.
• Eliminate 19,200 government jobs over three years, including 600 senior executives and 7,200 through attrition.
• Cut $2.1 billion from the Department of National Defence over the next three years.
• Cut funding to the CBC by 10 per cent over three years totaling $115 million.
• Cut funding to Elections Canada by $7.5 million a year starting in 2012-13.
• Give $5.2 billion over 11 years to the Canadian Coast Guard.
• Provide $450 million for sports facilities in the Greater Toronto Area for the 2015 Pan American and Parapan American Games.
• Tell consumers to complain directly to food companies about product labelling.
• Give $67 million to the National Research Council to refocus on "business-led, industry-relevant research."
• Streamline overall regulatory reviews of major economic projects.
• Provide $275 million to build and renovate schools on reserves.
• Pass legislation to create standards for First Nations education.
• Refund $130 million in application and processing fees to skilled foreign workers stuck in immigration limbo.
• Raise the retirement age of public servants from 60 to 65, for new employees beginning in 2013.
• Increase employee-contribution levels to pension plans for those working in Canadian Forces, RCMP, Public Service Commission and parliamentarians.
• Make the Governor General pay income tax beginning in 2013.
• Shut down the Public Appointments Commission, Assisted Human Reproduction Canada, and the National Round Table on the Environment and the Economy.
• Sell official residences abroad, generating $80 million in revenue.
• Standardize all government emails to one system.
• $205 million over one year for Hiring Credit for Small Business.
• Give $50 million over two years to Youth Employment Strategy.
• Give $150 million over two years on Community Infrastructure Improvement fund
• Give $105 million next year to Via Rail for operational and capital projects.
• Give $101 million over next five years for Esquimalt Graving Dock.
• Give $50 million over two years to protect wildlife at risk.
• Give $8 million to clean up low-level radioactive waste in Port Hope and Clarington, Ont.
• Provide $44 million over two years to the Canadian Grain Commission to reform their funding model.
• Provide $13.5 million over two years to improve pipeline safety.
• Give $35.7 million over two years to improve tanker safety and inspections, emergency preparedness related to oil spills and updated charts for shipping routes.
• Announce a new global commerce strategy in 2013 that sets trade priorities.
• Provide $9.6 million over three years to the RCMP to fight counterfeiting.
• Give $ 99.2 million over three years to help the provinces create permanent flood mitigation measures.
• The Government has found $5.2 billion in ongoing savings from departmental spending or less than two per cent of federal program spending.
If you would like additional information, feel free to email.
Thursday, March 22, 2012
Unlocking Old Ontario LIFs and LRIFs
April 30, 2012 is the deadline for Ontario Old Life Income Fund (LIF) and Locked-in Retirement Income Fund (LRIF) clients to take advantage of the one time 50% unlocking opportunity available to them.
In June 2009, Regulation 909 under the Pension Benefits Act of Ontario was amended to include changes to the rules governing Ontario locked-in accounts including Old LIFs* and LRIFs. Until April 30, 2012, owners of an Old LIF or LRIF will have a one-time opportunity to withdraw or transfer 50% of the total market value of the assets of the fund to an RRSP or RRIF.
The request to withdraw or transfer must be made on a form approved by the Superintendent of Financial Services and be submitted to us by April 30, 2012.
No applications for any withdrawal or transfer may be made after April 30, 2012.
Effective May 1, 2012, owners of Old LIFs and LRIFs will no longer be able to
withdraw or transfer 50% of the assets in their account.
For more information check out the information on the FSCO web site
* Old LIFs are Life Income Funds issued on or before December 31, 2007 and locked-in under the Pension Benefits Act of Ontario.
In June 2009, Regulation 909 under the Pension Benefits Act of Ontario was amended to include changes to the rules governing Ontario locked-in accounts including Old LIFs* and LRIFs. Until April 30, 2012, owners of an Old LIF or LRIF will have a one-time opportunity to withdraw or transfer 50% of the total market value of the assets of the fund to an RRSP or RRIF.
The request to withdraw or transfer must be made on a form approved by the Superintendent of Financial Services and be submitted to us by April 30, 2012.
No applications for any withdrawal or transfer may be made after April 30, 2012.
Effective May 1, 2012, owners of Old LIFs and LRIFs will no longer be able to
withdraw or transfer 50% of the assets in their account.
For more information check out the information on the FSCO web site
* Old LIFs are Life Income Funds issued on or before December 31, 2007 and locked-in under the Pension Benefits Act of Ontario.
Monday, February 13, 2012
30% off Ontario College & University Tuition
Are you a student or do you know a student who is eligible? Here are the conditions:
• Students must be less than four years out of high school and their parents' gross income must be $160,000 or less to qualify for the grant.
• Students with disabilities may receive the grant for up to six years of study.
• The grant for the current semester is $800 for students in a degree program and $365 for students in a college diploma and certificate programs.
This September the permanent 30% off tuition grant will apply to the full school year. Students in a university or college degree program will save $1,600, while students in college diploma and certificate programs will save $730.
Because the grant is calculated to be 30% off the average Ontario tuition, the amount of the grant will keep pace with any increased future costs -- meaning it will always be 30% off the price of tuition.
More than 300,000 students are eligible to receive the grant this year. Students who already receive OSAP will have their applications submitted automatically.
For more information and to apply
NOTE: Deadline to apply for the term starting January 2012 is MARCH 31, 2012
• Students must be less than four years out of high school and their parents' gross income must be $160,000 or less to qualify for the grant.
• Students with disabilities may receive the grant for up to six years of study.
• The grant for the current semester is $800 for students in a degree program and $365 for students in a college diploma and certificate programs.
This September the permanent 30% off tuition grant will apply to the full school year. Students in a university or college degree program will save $1,600, while students in college diploma and certificate programs will save $730.
Because the grant is calculated to be 30% off the average Ontario tuition, the amount of the grant will keep pace with any increased future costs -- meaning it will always be 30% off the price of tuition.
More than 300,000 students are eligible to receive the grant this year. Students who already receive OSAP will have their applications submitted automatically.
For more information and to apply
NOTE: Deadline to apply for the term starting January 2012 is MARCH 31, 2012
Sunday, February 5, 2012
Should I top up my RRSP?
I have had a number of my clients calling me the last few weeks asking if they should top up their RRSP this year. I thought that I would review the process I go through with them to determine what is best in each individual situation.
Question 1 – Do you carry a balance on your credit cards each month? Credit card debt is between 18 and 20 percent. If you are carrying a balance on credit cards, you are probably better off paying down this debt rather than putting money into your RRSP.
Question 2 – What is your marginal tax rate? The higher your marginal tax rate for 2011, the larger the tax refund you will get from putting money into your RRSP. In general –“ more bang for your buck” the more money you earn.
Question 3 – Are you likely to need the money in the next two or three years? If you are likely going to take the money out in the next few years – you should top up your TFSA (Tax Free Savings Account) first. In 2012, you can deposit a total of $20,000 if you do not already have a TFSA account. If you do have an account and have never taken money out of it, you need to subtract the amount of money you have already deposited from the $20,000. If you have taken money out, the calculation is more complex – give me a call.
Question 4 – Are you likely to be a first time home buyer in the next few years? The Home Buyers Plan (HBP) lets you “borrow” up to $25,000 from your RRSP to acquire a home in Canada to be used as your principal residence. (This money must be repaid over a 15 year period.) If you are planning on buying a first home and don’t have $25,000 in your RRSP, it may make sense to top up now.
Question 5 – How old are you? The longer the money remains inside the RRSP, the greater the compounding that will occur.
You get a tax break when you put money into an RRSP. The money grows tax free inside the plan. However, you do pay taxes when you withdraw the money – so you need to think about what your tax bracket is likely to be later.
Do you have additional questions? Give me a call and we can work out the numbers for you.
Question 1 – Do you carry a balance on your credit cards each month? Credit card debt is between 18 and 20 percent. If you are carrying a balance on credit cards, you are probably better off paying down this debt rather than putting money into your RRSP.
Question 2 – What is your marginal tax rate? The higher your marginal tax rate for 2011, the larger the tax refund you will get from putting money into your RRSP. In general –“ more bang for your buck” the more money you earn.
Question 3 – Are you likely to need the money in the next two or three years? If you are likely going to take the money out in the next few years – you should top up your TFSA (Tax Free Savings Account) first. In 2012, you can deposit a total of $20,000 if you do not already have a TFSA account. If you do have an account and have never taken money out of it, you need to subtract the amount of money you have already deposited from the $20,000. If you have taken money out, the calculation is more complex – give me a call.
Question 4 – Are you likely to be a first time home buyer in the next few years? The Home Buyers Plan (HBP) lets you “borrow” up to $25,000 from your RRSP to acquire a home in Canada to be used as your principal residence. (This money must be repaid over a 15 year period.) If you are planning on buying a first home and don’t have $25,000 in your RRSP, it may make sense to top up now.
Question 5 – How old are you? The longer the money remains inside the RRSP, the greater the compounding that will occur.
You get a tax break when you put money into an RRSP. The money grows tax free inside the plan. However, you do pay taxes when you withdraw the money – so you need to think about what your tax bracket is likely to be later.
Do you have additional questions? Give me a call and we can work out the numbers for you.
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