You and Your Dental Benefits

One of the areas people often ask me questions about are dental benefits.  I’m not an expert.  However, the Ontario Dental Association has a great web site with explanations written for the non-dentist.  Check it out here.

This web site covers a number of areas regarding your dental plan including the differences between your plan and the fees that your dentist may charge, claim forms, billing, what to do if your dental claim was denied, the ODA suggested fee guide and more.

If you are having any major work done (i.e. more than routine cleanings, x-rays or small cavities filled), you may want to have your dentist submit a pre-treatment determination to your insurance company.  This way, you will know in advance what the insurance company will cover.  If you are having a bridge, crown or inlay, there may be laboratory fees in addition to the dental fees.

The ODA site also explains many of the common dental procedures.  Click here to read about them. 

They even have an IQ test that you can take. 

New Estate Information Return

Ontario releases new Estate Information Return

Effective January 1, 2015, estate trustees (i.e., executors) in Ontario have additional duties, with Ontario’s release of its Estate Information Return.   Part of the probate process, this new return must be filed within 90 calendar days after a certificate of appointment of estate trustee is issued.  This return is not required where an application for probate was made prior to January 1, 2015.

On the Estate Information Return, the estate trustee will need to provide information on the Fair Market Value of the assets forming part of the estate for estate administration tax (i.e., probate fee) purposes.

In the FAQ, Ontario has confirmed that certain assets are excluded from the value of the estate for purposes of the tax.   Excluded assets include “RRSPs, RRIFs, TFSAs and life insurance policies where there is a living named beneficiary”. (Please see the 8^th point in the section entitled, "Value of estate assets" in the FAQ)

The return, as well as the Guide for completing it, can be accessed from the Ontario Ministry of Finance’s web-site.

Also, in 2012, when the proposed changes had been tabled, we prepared a summary of the changes to the Estate Administration Tax Act in Probate Process – Ontario (7193).  Here, you will also find an example of how the legislation has impacted estate executors’ responsibilities.

More than ever, it’s the right time to discuss segregated funds’ advantages, which include estate bypass when a named beneficiary is designated.   Contact your sales office for more details.

Information provided by Standard Life 

Your Legacy

Your legacy is more than a bank balance. It's the impact you make on your community and your family. Here are six tips for turning a nice thought into a powerful reality:

1) Get Organized - Ensure your personal information - bank account and investment contract numbers, insurance policies, tax information, etc. - are up to date and stored somewhere safe and accessible by your advisor, attorney, beneficiaries or family members.

2) Check your Will - Make sure you have a will and it reflects your current intentions. Do the same with any power of attorney or other legal documents. If you don't have a will, or need to change it, contact me or someone you trust to obtain the name of an estate lawyer ho can help draft yours.

3)  Name Names - Select an executor for your estate and ensure that all beneficiary designations complement those outlined within your will.   

4) Consolidate your Finances - Streamline your investments and bank accounts to simplify administration. Having joint accounts makes it easier to ensure resources are readily available.

5)  Minimize Taxes - Consider investments and strategies that allow your estate to bypass probate and minimize the tax bill for the next generation.

6) Discuss your Plans with your Family - Keeping them informed can help them understand your decisions.    

Over time, situations change.  Your children become adults, tax laws change, your executor ages.  It is important to review your plans every few years to ensure that they are still appropriate. 
 

Review of financial markets

I would like to wish you a happy, healthy new year. This post will provide you with a brief update on financial markets and my thoughts on what may lie ahead.

The global economy in aggregate continued to strengthen in 2014, although the improvement, as has been the case through most of the current recovery, was uneven. After shrinking in the first quarter, the U.S. economy grew at a much stronger rate than expected in the second half of the year. While not as robust, Canada’s economy also registered encouraging signs of improvement during 2014. In other regions, geopolitical events such as conflict in Ukraine and the Middle East, slower growth in China and the risk of deflation in Europe affected financial markets. Overall, the global expansion moved cautiously forward.

Global financial markets also started the year on a hesitant note, but benefited from improving economic trends and strong corporate profits through the spring and summer months. Most equity indexes were positive through the end of the third quarter, but volatile conditions surfaced in the fourth quarter as investors began to focus on the slowing pace of growth in emerging markets, particularly China. Concerns about oversupply in the energy market caused a sharp drop in the price of oil and other commodities, which was felt broadly across many markets and sectors. The price per barrel of crude dropped to less than US$50 at the start of 2015, the lowest since 2009.

Canada’s commodity-heavy S&P/TSX Composite Index was particularly volatile in the fourth quarter, staging a series of sharp declines and rebounds. The Canadian index finished the three-month period with a loss of 1.5%, but registered a respectable gain of 10.6% for the year. The falling price of oil, which is a major Canadian export product, also caused the Canadian dollar to lose value relative to the U.S. dollar. The loonie finished the year about 8% lower at 86.2 cents U.S.

The MSCI World Index, which measures large and mid-cap equities across 23 developed markets, gained 5.5% for the year in U.S. dollar terms. Accounting for the Canadian dollar’s decline, however, this gain was magnified to 15.1% for Canadian investors. The performance of the World Index reflected generally weaker results in emerging and developed markets outside North America and the robust gains for U.S. equities. The benchmark S&P 500 Index benefited from strong U.S. economic trends, growing consumer and business confidence and healthy corporate profits, adding 13.7% in 2014. Again, Canadian investors in U.S. stocks benefited from the decline in the value of our own currency, with the U.S. market up 24% in Canadian dollar terms.

 
Turning to fixed-income markets, the moderate pace of global economic activity in 2014 meant that monetary policy remained highly accommodative to growth. Although the U.S. Federal Reserve officially ended the asset purchase programs it had used to stimulate the economy since 2009, central banks in Europe, China and Japan took steps to keep interest rates low, their currencies weak and their export markets competitive. Bonds performed well in this environment. The FTSE TMX Canada Universe Bond Index, a measure of Canadian government and investment-grade corporate bonds, added 2.7% in the fourth quarter for a gain of nearly 8.8% for the year.

As we head into 2015, the global economy continues to slowly expand. Although interest rates remain low, there are some indications that rates, at least in North America, could begin to move higher in the coming year, which could be a headwind for fixed-income investments. Nearly six years after the financial crisis, equities have delivered generally positive results, but markets are cyclical, and it is always difficult to predict their direction in any given year. While the sharp drop in oil prices has weighed on the Canadian equity market in particular, it is important to remember that asset classes, industry sectors and geographic markets often move in divergent directions. Lower oil prices, for example, can be positive for other sectors as they strengthen consumer confidence and reduce costs for manufacturers, transportation companies and related industries.

In my view, recent market events support the case for maintaining a portfolio that is well diversified across asset classes, geographies and industry sectors. Diversification will help to maximize returns for your portfolio, while mitigating risks as they occur, including currency and interest rate movements.

I hope you find this overview helpful. We work hard to develop the portfolio that best reflects your long-term financial goals and tolerance for risk. Should you have questions about your investments or any other issue, please feel free to give me a call. I wish you all the best in 2015.

 

The information in this post is derived from various sources, including CI Investments, Signature Global Asset Management, Cambridge Global Asset Management, Globe and Mail, National Post, Bloomberg, Yahoo Canada Finance, and Trading Economics. Index information was provided by TD Newcrest and PC Bond, and all quoted equity index returns are on a total return basis (including dividends). This material is provided for general information and is subject to change without notice. Every effort has been made to compile this material from reliable sources; however, no warranty can be made as to its accuracy or completeness. Before acting on any of the above, please contact me for individual financial advice based on your personal circumstances.

Diversity in your investment portfolio

I will periodically be posting information that I think is of interest and that I have received.

 

Canadians who diversified their equity exposure and invested in US Equities in 2014 made a wise decision.  The S&P 500 is up 12% YTD while the S&P TSX has done roughly 6% (price only).  With 2015 around the corner this trend looks likely to continue.  The Canadian consumer remains highly leveraged, our housing market is overvalued and a slumping oil price means eastern provinces will be under pressure to pick up the slack from those in the west.  By contrast, the US housing market looks stable, unemployment levels continue to fall and as this week’s Muse explains, American consumers are in a better position to spend in 2015 than they have been for years.

Key Takeaways

Widespread spending

• ‘I don’t think there’s a single headwind for consumers, it’s all tailwinds blowing at different strengths’ said Mark Zandi, chief economist for Moody’s Analytics Inc.
• According to a Bloomberg survey, spending is anticipated to increase by 2.7% in 2015, compared to the 2.2% growth seen in the first three quarters of 2014
• ‘We don’t have all our eggs in one basket anymore where we’re just relying on the wealthy to drive spending’ said Ellen Zentner, a senior economist at Morgan Stanley

Broad-based Hiring

• The breadth of industries hiring last month was the most extensive since 1998, a strong sign that the expansion is having widespread benefits on the economy
• Weekly earnings adjusted for inflation climbed 0.9% on average last month, the biggest increase in six years
• Consumers’ incomes are forecast to grow 1.8% over the next 12 months, the most since 2008 according to a Thomson Reuters/U of Michigan consumer sentiment surve

Middle Class

• Research by Goldman Sachs economists shows that middle-income households spend the most on gasoline as a share of total household purchases
• Furniture stores, vehicle dealers, clothing outlets, restaurants and hotels are among the retailers that benefit the most from wage growth and accessible credit, according to Morgan Stanley
• ‘You’ve got your debt down to levels that are reasonable, your labor market conditions are making some really significant gains, so people are feeling much more comfortable and they’re willing to spend’ said Michael Carey, chief economist at Credit Agricole CIB.  Carey forecast a 2.9% increase in spending for 2015

LINK: http://www.bloomberg.com/news/2014-12-19/americans-seen-getting-groove-back-with-spending-burst-in-2015.html

While there are clearly many signs that the American consumer will help to propel the US economy in 2015, especially given the current exchange rate, prudent investors will be careful not to overexpose their portfolios to US stocks.  The unpredictable nature of the markets should be enough to remind investors to focus on their long-term goals and seek a reasonable growth rate. 

Happy Holidays,

Information provided by Great West Life

 

2014 Year end tax tips

It’s that time of year again – Year End Tax Planning.  Each year, Jamie Golombek of Renaisance Investments puts together a list of tips. To see his full list click here .   My abbreviated version follows.

1.     Are you between 60 and 64 and considering taking CPP early?  You may want to apply before Dec. 31, 2014 as the “downward monthly pension adjustment” increases from 0.56% in 2014 to 0.58% in 2015.

2.     Did you turn 71 in 2014?  You must convert your RRSPs to a RRIF or registered annuity before the end of the year.  If your spouse or partner is younger than 71, you can continue contributing to a spousal RRSP.

3.     Review which investments you hold in your RRSP, TFSA and non-registered accounts.

a.      Non Registered Accounts – Canadian dividends are taxed more favourably than interest income.

b.     RRSP – 2014 maximums (assuming that you have used all of your previous contributions) is limited to 18% of your income to a maximum of $24,270 less any pension adjustments.

c.      TFSA – You can contribute up to $31,000 in 2014 (if you have not contributed before).  If you have withdrawn funds from your TFSAs, make sure to check when you did it, as re-contribution room is not available until the following calendar year.

4.     Registered Education Savings Plans (RESP) and Registered Disability Savings Plans (RDSP) – the government has matching grants for both of these programs.  The RESP is designed to save tax efficiently towards children’s post secondary education. The RDSP is designed for people who qualify for a Disability Tax Credit and are under 49 years of age.  Contact me for information on both of these programs.

5.     Charitable Donations, Investment Expenses, Childcare Expense, some Business Expenses should be done before the end of the year to use the expenses on your 2014 taxes.  You have until March 2, 2015 to make your 2014 tax year RRSP deduction.

6.     As of 2014 Safety Deposit Box fees  are no longer deductible

There are many additional tax planning activities that you may be able to use to decrease your taxes.  Speak to your accountant or give me a call.

Toronto International Film Festival 2014

Another year of the Toronto International Film Festival (TIFF) has come to an end and it’s time for me to let you know what movies to watch out for.  This year, I only saw 18 movies (over 7 days). Only one was a Hollywood movie – Learning to Drive, staring Patricia Clarkson and Ben Kingsley.  It is a chick flick and was enjoyable. The plot summary - After her husband leaves her, a Manhattan writer (Patricia Clarkson) finds solace in her biweekly lessons with a Sikh driving instructor (Ben Kingsley), in this adaptation of Katha Pollitt’s 2002 essay for The New Yorker.  

I always am asked which movie did I like the best.  Of the 18, I saw, there were only 2 that I didn’t think were TIFF quality and both were perfectly good “Made for TV” movies.  (Much better than the year I saw Mother and Son which was so bad, you can’t find it on Google.

Amongst my favourites were the following:

The Dead Lands

In this dazzling action epic set in pre-colonial New Zealand, the young son of a murdered tribal chieftain seeks vengeance on his family’s killers by learning the ancient Maori martial arts from a legendary warrior. This film is in Maori, shows how the 16 year old chieftain’s son grows up and develops the ability to make independent decisions that go against tribal customs.

Kahlil Gibran's The Prophet

The Prophet, by Lebanese author Kahlil Gibran, is among the most popular volumes of poetry ever written, having inspired millions of readers in over forty languages since its publication in 1923. Director Roger Allers (The Lion King) assembled an array of internationally acclaimed animators to realize episodes from the classic text by the renowned Lebanese poet, which are woven into the tale of a mischievous young girl (voiced by Beasts of the Southern Wild’s Quvenzhané Wallis) who attempts to free an imprisoned poet (Liam Neeson). This animation in this movie was incredible and it prompted me to re-read the poetry.

 
X + Y

If you were a nerd or know one, this movie is for you. A socially awkward teenage math prodigy (Asa Butterfield, The Boy in the Striped Pyjamas, Hugo) finds new confidence and new friendships when he lands a spot on the British squad at the International Mathematics Olympiad, in this warm and inspirational drama co-starring Sally Hawkins, Rafe Spall and Eddie Marsan.

Whiplash

If you’re into Jazz or drumming, you will enjoy this movie, which was filmed in 19 days.  An ambitious young drummer (Miles Teller) at a prestigious music academy clashes with a hard-driving instructor (J.K. Simmons) in this sizzling drama.  Miles Teller does all his own drumming.  By the end of the movie, I was exhausted, much like the young drummer at the end of   his incredible playing

Seymour, An Introduction

Ethan Hawke directs this intimate documentary portrait of classical pianist, composer, author, teacher and sage Seymour Bernstein. The teaching style of Mr. Bernstein is in stark contrast to that of the Instructor in Whiplash, that there is no comparison.  The movie is worth seeing, just for the classical piano playing.

 

List of the Movies I saw:

·       The Lesson

·       The Dead Lands

·       The Crow’s Egg

·       Kahil Gibran’s The Prophet

·       Who Am I – No system is safe

·       X + Y

·       Kill me three times

·       1001 Grams

·       Red Rose

·       Whiplash

·       Theeb

·       Mr Turner

·       The Look of Silence

·       Run

·       Learning to drive

·       International Shorts

·       Li’l Quinquin

·       Seymour, An introduction

I received comments (by email) from a number of people in response to this blog.  I thought that I would add them below:

1)

My favourite movie was definitely Second Chance, directed by Susanne Bier, Oscar winning director of After the Wedding and A Better World.

It's a story about a detective and his wife who have a newborn baby.  So do the junkie couple that he has arrested in the past and that he visits to find their baby neglected and lying in filth.  The detective's baby suddenly dies one night of SIDS and in the horror of the moment he races over to the junkie couple's apt and switches the babies, assuming that their child will die anyway and he can give their child a "second chance."  All these assumptions play out differently than anyone could imagine.

Runner up for me was Pride - wonderful true story.  It's already playing in theatres now, so if you have a chance to see it you'll really enjoy it.

 

 2)

Thanks for the summary of these movies.  We go to movies, perhaps twice a month.  We just saw "my old lady" with a wonderful cast.  Kevin Kline, Maggie Smith, and Kristen Scott Thomas (?) spelling.  So far this year I haven't seen anything that spoke to me since, "Salmon Fishing in the Yemen" which is the best movie I have seen in years.  It was funny and poignant and not the least predictable.  That was a last year's movie.  I love to watch TCM movies, which are such fun.  I don't know if you get that channel, but it is amazing if one likes older movies.

 

3)

The one we saw and did not like was The Riot Club. The acting and production was good but both of us left wondering, why make this movie?