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Retirement Planning Tips – July 2014

Whether you are decades away from retirement or if it is just around the corner, being aware of the planning opportunities will take the fear and uncertainty out of this major life event.

The Big Question – How much will I Need to Retire?

Recent studies reported in Canadian Business (May 2012) suggest that middle and upper middle class couples spend approximately $50,000 to $60,000 per year in retirement.  If this seems a lot lower than what you and your spouse are spending now, it probably is.  That is because most retirees no longer have the same level of expenses around housing – education and raising a family.

The average age for retirement in Canada for males is age 62 (females, age 61).  At that age, normal life expectancy is another 22 years.  Many financial advisors use a rule of thumb that says you will need a nest egg of approximately 25 times your post-retirement spending. Read more

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How To Be A Smarter Investor – June 2014

While we’ve enjoyed several years of equity markets rebounding from the lows after the financial crisis, before we start to get too complacent, it is a good time to review and consider what it means to be a smart investor.  If the past has taught us anything, it is that in times of choppy or declining financial markets, rational and savvy investment decisions often get lost in the fear and panic of the moment.   Following these few key points can help you avoid making poor investment decisions and become a smarter investor.

  • Know Your Risk Tolerance: Prior to making any investment, you should know how much risk you are prepared to accept.  All investments carry some type of risk.  If making a specific investment makes you significantly uncomfortable, or keeps you up at night, then you probably need to rethink it.   Anything that has the potential to increase considerably, also carries the same potential to decrease significantly.  If this happened, would it seriously jeopardize your financial plans?  Read more
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The Corporate Extraction Strategy – May 2014

Transferring a Life Insurance Policy to a Corporation

 

The Corporate Extraction Strategy involves transferring a personally owned life insurance policy to a corporation for its fair market value (FMV).  When handled properly, it will result in withdrawing capital from the corporation tax free!

The preferred candidates for this strategy:

  • Own a life insurance policy that they wish to maintain;
  • Own all the shares in a corporation;
  • Are usually older and/or would be rated or declined for life insurance due to health concerns. Read more
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Critical Illness – Are you Protected? April 2014

We all face many risks – contracting a critical Illness is one of them. Being diagnosed with a life threatening illness is not something anyone wants to contemplate; however, you can purchase critical illness insurance to protect against the financial impact.
The Back Story
Critical illness insurance was invented by Dr. Marius Barnard. Marius assisted his brother Dr. Christiaan Barnard in performing the first successful heart transplant in 1967 in South Africa. Through his years of experience with cardiac patients, Marius observed that patients with minimal financial stress, recovered more often and much quicker than those with financial hardship. He came to the conclusion that he, as a physician, could heal people, but only insurance companies could provide the necessary funds to create the environment that best promoted healing. As a result, he worked with South African insurance companies to issue the first critical illness policy in 1983.

Medical practitioners today will confirm what Dr. Barnard observed – the lower your stress levels the better the chances for your recovery. Read more

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Taxation of Life Insurance – New Rules Create New Opportunities – March 2014

In August the Department of Finance published their changes to the taxation of life insurance as previewed in March 2013 Federal Budget.  When final legislation is passed later this year, these changes will result in an updating to the “exempt test” which determines how much tax-deferred value can accumulate in a life insurance policy before it is subject to accrual taxation.  The new rules take effect and will apply to policies issued January 1, 2016 and later.

Highlights of the new rules and their affect

 

For Cash Value Life Insurance:

  • Effective with policies issued after 2015 the new rules will reduce the ability to tax-shelter accumulating cash values;

Read more

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ARTICLES OF INTEREST

28
Jul
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Co-ordinate Your Health-Care Plans and Save

by Susan Yellin, BrighterLife.ca

Do you and your spouse or partner each have a health-care benefits plan at work? Here’s how to make the most of them.

Whether it’s the traditional two-parent family or the more modern blended household, working couples are increasingly likely to have access to more than one health and dental plan.

The plans may differ in exactly what and how much they cover, but if you co-ordinate your benefits, you can take advantage of both and potentially get back 100% of your out-of-pocket health-care expenses. Read more »