Often we see older investors shift gears near retirement and beyond. Many become risk averse and move their assets into fixed income type investments. Unfortunately this often results in the assets being exposed to higher rates of income tax and lower rates of return – never a good combination.
Or maybe the older investor cannot fully enjoy their retirement years for fear of spending their children’s inheritance.
The Estate Bond financial planning strategy presents a solution to both of these problems.
Advocis recently partnered with the Investment Funds Institute of Canada (IFIC) to deliver new evidence on the value of financial advice. The research paper, “Econometric Models on the Value of Advice of a Financial Advisor,” demonstrates the causal link between the presence of financial advice and the accumulation of financial wealth.
Among the key findings:
- Advice has a positive and significant impact on wealth accumulation
- Advised households experience the beneficial effects of saving
- Advice positively impacts retirement readiness
- Advice positively impacts levels of trust, satisfaction and confidence in financial advisors
To download the executive summary of the survey, click here
By Melissa Cassar, VISA Canada
You need to know what you and your spouse are worth together and what you’re worth on your own. It sounds like a big job but it comes down to a simple equation:
Net Worth = Assets – Liabilities.
It does get a little more complicated. There are three categories of assets:
- Joint Assets These include “property” such as the home you owned together and any other real estate holdings; they include joint savings accounts, chequing accounts, mutual funds and other investments, cash, and any business interests that are jointly owned.
- Your Assets These are accounts that you opened or owned before you were married and to which you have remained the sole contributor. Properties that you owned before you married are also included in your assets.
- Spouse’s Assets These are anything your spouse opened or owned before the marriage, including RRSPs or assets inherited from family members.
Whether your estate is large or modest, it is always a good idea to review your estate plan regularly to ensure that it continues to meet your objectives and keep up with any changes in your financial or family situation. If you do not have an estate plan, perhaps now is the time to consider implementing one as it is never too soon to start the planning process. The objective of an estate plan is the orderly distribution of one’s assets to intended beneficiaries with a minimum of taxes, expenses, and emotional turmoil.
The foundation of any estate plan is the Last Will and Testament. This is the document that instructs your executor how your estate is to be distributed and to whom. Unfortunately, you won’t be there to confirm or expand on those instructions, so an appropriate amount of thought and planning is required to get it right the first time. This article will provide you with an overview of what is required for an effective estate plan.