Monday, March 9, 2020

Why You Need to Share Your Financial Stories With Your Grandkids

I'm lucky to have Clifton Corbin from Cliftoncorbin.com share his thoughts on sharing your financial stories with your Grandkids on the blog today.
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Grandparents play a critical role in the guiding and moulding of a generation.

I can bear witness to the remarkable relationship children can have with grandparents.  I watch my children interact with my parents in wonder and awe.  My rule-following, austere parents that I thought I knew, transform into a playful version of themselves, and it warms my heart.

For many kids, mine included, their grandparents are their first confidants.  They feel comfortable sharing with their grands’ in ways they don’t with other family or friends.  I believe it is because they receive unconditional love, without the restraints that parents put upon them. That combination allows for an openness that they cannot experience with many others.  It also makes for a beautiful relationship that enables children to discuss whatever interests or concerns them freely.  Add to that their grandparent’s worldly perspective gained through a life filled with experiences, and you have a marvellous combination.


Luckily, most grandparents acknowledge the role they can play in their grandchild’s life. According to a 2019 AARP study, “81% of grandparents say they play an important role in their grandchildren’s lives”. Grandparents have the power to influence those young souls.  They look to their grandparents not only for a loving shoulder to lean on but also as role models to fashion their lives after.  Is there any better way to model good behaviour than to include your grandchildren in your retirement planning journey?

Share Your Family Stories

I still love hearing about what my parents and grandparents had to go through to get where they are today. Walking to school, working as a bookbinder, a cab driver, a baker and au pair.  The stories about buying first homes or first cards.  Looking for work after immigrating to a new country.  Trials and tribulations of working and going to university with a young family at home.  Not to mention the discrimination that they experienced.

All of those stories helped to inspire me to work hard and appreciate what I have.  They helped me understand where I came from and how fortunate I am to have what I have.  The same would be true for the stories you share with your grandchildren.  Retirement is the ultimate story of delayed gratification.  You work and toil, all the while putting a little bit of money aside for someday in the future.  You doubtlessly have had both ups in downs in your financial journey.

Share your financial stories with your grandchildren. Children that hear about good financial habits are more likely to adopt those habits.  Telling your stories will help to empower your grandchildren to build good financial behaviours. Those stories have the power to influence and to educate.  They teach the need for forethought and planning, the importance of saving early, how hard work pays off, and the need for perseverance.

Planning for retirement can be an exciting time in your life as you all the possibilities that lay ahead. Retirement is the opportunity to reap the ultimate reward of all of your hard work.  Include your grandchildren in this exciting part of your life so they can learn and grow from your valuable experiences.

Clifton blogs at CliftonCorbin.com an online resource teaching finical literacy for parents and their kids.  You can follow Clifton's personal and business ramblings on Twitter @cdcorbin

Wednesday, January 1, 2020

A Few of My Favourite Things: 2019 Edition


I’m no Oprah Winfrey but I just wanted to share a couple of ways I save money throughout the year on everything from my cell phone bill and groceries to my pesky online shopping habit. (Please note some of the links below include referral codes which may result in a monetary bonus for me and you).

Enjoy the list!


We recently switched from Telus to Public Mobility and feels like we cut our cell phone bill in half. You do need to own your phone outright and to buy a Public Mobile SIM card. Public Mobile offers rock bottom prices on their plans because they have no physical stores or call centre. You are not on your own for support as there is a community that offers help for most frequently asked questions. I went through Amazon to get the SIM card as most were sold out in the stores (I feel like that is a good sign). They use Telus' network so I've had no interruptions and have not noticed slower internet on the network.





I do A LOT of online shopping and I make sure to always hop over to Rakuten first to get a percentage rebate back from whatever I buy. The rebates don’t add up too much unless you know some of the ins and outs and use some of these tips:
  •  Use Rakuten for all your travel bookings (almost all of the hotels and main booking engines are available 
  • Shop on the bonus days and look for double cashback at your favourite stores
  • Look for bonus days in the Gift Card Shop 

There is a learning curve as you have to remember to visit Rakuten and log in before you shop. Or you can download their browser plugin to help remind you before you checkout online.



Online grocery pick up was completely new to me this year. My friend suggested it and I thought she was crazy. I also live within two blocks of a Loblaws, so really didn’t think there would be any benefit. Boy was I wrong. One of the biggest benefits I have noticed is that it saves SOOOO much TIME. Your regular purchases are stored in your account online so it’s quick to add stuff to your cart (pardon the pun). The second biggest benefit is that it saves so much MONEY. I am spending less because I avoid any impulse purchases. And almost every other week they are giving away $10 coupons on purchases over $100.00. 



Earn a whopping 3.3% Interest on your savings via Laurentian Bank’s new online High Interest Savings account offering. Separate from Laurentian’s physical banks they have launched with what looks like an impressive non-promotional rate. The perfect spot great place to stash your Christmas bonus or for any money that may be needed on a short term basis.


If you want to keep an eye on your credit score Credit Karma is a great free service designed to help you make sure all of your information is accurate with the credit bureaus.

I’d love to hear what everyday things you do to save money throughout the year. Please share some of your favourite things in the comments below this Holiday Season.



Thursday, November 14, 2019

Financial Planning Week Gives Canadians the Opportunity to Take a Closer Look at Their Finances


The 11th Annual Financial Planning Week Takes Place Across Canada from November 17-23, 2019

Canada, November 14, 2019. For Canadians, managing finances let alone talking about money has its challenges. Conflicting priorities make it difficult to figure out the best way to set and reach goals. With an endless amount of information available, it’s hard to determine how it all applies to one person’s particular situation.

Taking a proactive approach to money management can help build confidence and reduce the stress and anxiety most Canadians feel about managing their money.

FP Canada's National Financial Planning Confidence survey revealed that Canadians aren’t getting the financial help they need due to low confidence. The survey shows that 41% of Canadians don’t feel confident talking about their finances and 34% don’t know what questions to ask.

Ayana Forward is a fee-only Certified Financial Planner at Retirement in View in Ottawa. She is seeing more and more clients looking specifically for advice and don't want to be sold products.  "A trend I'm noticing more and more is clients looking specifically for "fee-only" or "fee-for-service" financial planning engagements. They want a plan first from an unbiased and independent professional who has no incentive to sell them products”.

Except for Quebec, the financial planning industry in Canada is largely unregulated. By working with a Certified Financial Planner you can ensure your advisor has met a standard of experience, education, ethics, and competence.

Mrs. Forward has developed a quiz designed to help people determine what type of financial planner is best suited for their particular needs



Here are some tips for taking a proactive approach to your finances:
·      Review your spending habits regularly
·      Optimize your investment accounts for tax efficiency
·      Plan for irregular expenses that might not show up in your day-to-day budget
·      Seek professional guidance in areas where you feel you need the most help
·      Establish short and long term goals and write them down on paper


Where financial planners can help:

·      Overall review your financial picture
·      Help you determine what to prioritize based on your goals
·      Provide professional insight, guidance, and support
·      Help improve your tax efficiency
·      Make sure your investment portfolio matches your risk tolerance and objectives

Media Contact:
Ayana Forward, CFP

Retirement in View
240 Catherine St. Suite 201
Ottawa ON
K2P 2G8
613-416-9593
ayana@retirementinview.ca



Friday, July 19, 2019

7 Questions To Ask Before Applying For CPP

The Canada Pension Plan is a contributory program that helps provide Canadians with a guaranteed retirement pension for life.


Below is a list of important considerations to make before applying for CPP. We have also provided some resources and contact information for Service Canada: 1-800-277-9914


1. CPP Payments: How Much CPP Will I Get?

The first question to consider is: “How much will I get from CPP?”. You and your employer contribute to CPP directly via deductions from your paycheck. If you are self-employed you contribute both the employee and the employer amount. You can view your CPP statement of contributions and the amount of your estimated monthly benefits through your MyService Canada account.


2. Should I take CPP early?

You can apply for CPP as early as age 60 but the amount you receive will be reduced by 0.6% per month you take it before age 65.  You also have the opportunity to delay receipt of CPP past age 65, in which case you add 0.7% bonus per month you delay up until age 70. You can add hundreds of dollars to your monthly retirement income simply by delaying CPP. This is particularly important if you decide to continue working past 60.

3. Should I partake in CPP pension sharing with my spouse?

CPP payments are unique when it comes to income splitting with your spouse. You need to request pension sharing when you apply for CPP as the split is not done on your income tax return. Sharing your CPP pension can lower your overall tax bill if you and your spouse are in different tax brackets.

4. Do I have low earning years I can eliminate from my CPP benefit Calculation?

Eliminating low earning years from your CPP benefit calculation can increase the amount you are entitled to.  You can drop out years where you were raising children or were on disability. Click here to learn more about the child-rearing provision.

5. How will my other Government benefits be affected?
It is important to consider how CPP will impact the other Government Benefits you are entitled to including GIS and OAS.
If you are a low income senior taking CPP may affect your GIS benefit payments as these are income tested.
If you are a high income senior adding CPP may affect your OAS payments if you are pushed above the clawback threshold.

6. Am I in Good health?

If for health reasons you have a shortened life expectancy you will likely want to consider taking CPP as soon as possible. If you have a disability before the age of 60 you may qualify for CPP disability benefits.

7.  Do I have a bridge benefit through my current pension?

If your current pension offers a bridge benefit you may want to consider taking CPP early as the bridge benefit offsets part of the penalty from taking CPP early. It also provides you more money while you are younger and likely in good health.



Related Resources:






Friday, May 3, 2019

Your Retirement Planning Checklist For 2020



Planning for retirement can be confusing...

There are so many moving pieces and we need to make sure we are doing everything in our power to get our finances organized before we head out into this next phase of life.


We have put together a comprehensive retirement action plan checklist for anyone nearing retirement in 2020.  It makes sense to complete a financial audit prior to retirement so that you can prepare for the transition as proactively as possible. 


At the end of the post, there is a free checklist that summarizes all of the points that you are welcome to download.






1. GETTING ORGANIZED: Gather Your Financial Data


You won't be able to start planning for retirement effectively until you pull all of your pertinent documents together. Put some time aside to gather your: 

  • Pension statements
  • Most recent investments statements 
  • Insurance documents, wills, powers of attorney
  • Debt statements


2. HOW MUCH WILL YOU NEED? 


Create a budget that addresses your basic necessities, major expenses, travel, fun, and leisure. Understand how your expenses will change in retirement and also make note that some of your expenses will decrease including employment deductions.


Start thinking about the activities that matter the most to you and make sure your budget addresses these items first.


Explore and estimate costs you should be aware of for health and long term care in your region.



3. HOW WILL YOU FUND YOUR LIFESTYLE? 


Retirement comes with a mindset shift in terms of where cash flow will come from now that you won't have a traditional paycheck to rely on. Have a clear outline of the makeup of your new income sources.

  • Assess the best time to access Government Benefits 
  • Estimate your annual pension plan benefits (if applicable)
  • Determine how much sustainable income your investments can produce annually
  • Include other potential sources of income (part-time work, small business, etc) 


4. MAPPING OUT LONG TERM FINANCIAL PROJECTIONS

  • Set your target retirement date
  • Understand how much you need to save to reach your income goal
  • Incorporate assumptions for inflation, investment returns, and life expectancy


5. PUTTING IT ALL TOGETHER

 

Having a clearly written plan in place for retirement can bring you peace of mind. Don't hesitate to work with a Certified Financial Planner if you need guidance and an independent review of your finances before you decide to retire.  Below are some ways a good planner can add value.

  • Long-term income and expense projections
  • Utilize proactive tax planning opportunities​
  • Explore different scenarios


Saturday, March 30, 2019

What to know for 2019 Tax Season

Welcome to the 2019 Tax Season! 

Below I have listed some key facts, figures, and resources to help with filing for your 2018 tax return.


Key Dates:

Feb 18: NETFILE opens (first day you can file online)
Feb 28: You should have received most of your slips (except T3s)
Mar 1: RRSP contribution deadline 
Mar 31: You should have all your slips (including T3s)
April 30: Filing deadline for most people, June 15th for Small Business Owners (taxes payable still due April 30)

What’s New For 2018?

New payment options: You can now pay your tax balance owing with Interac® Online, Visa® Debit, or Debit MasterCard®. (*fees do apply starting at 2.29%)

Provincial Tuition Tax Credits: Have been eliminated in Saskatchewan, Ontario and New Brunswick. The Federal Tuition credit is still available to eligible students.

Service Animals: Can now be claimed as an eligible medical expense

Climate Action Incentive: Tax credit designed to offset the coming increase to in prices to gasoline, natural gas and propane in provinces Saskatchewan, Manitoba, Ontario and New Brunswick

Accelerated CCA: Small businesses can now claim more depreciation in the first year of owning a new asset.


Common Missed Deductions/Mistakes

  • The Investment Management Fees you are charged on non-registered accounts is deductible as a carrying charge on your return. For 2018 this amount will be calculated on the worksheet instead of Schedule 4.
  • If you are part of a Group RRSP matching program make sure your Jan-Feb slips are provided on your 2018 tax return. The most common cause of RRSP over-contributions are from those who have forgotten these matching contributions are recorded for the previous year's return.
  • Have your adjusted cost base (book value) available for any Capital Gains you have to claim on securities transactions in your non-registered accounts. Often times financial institutions are not including book values on the T5008 slips they provide you.


Key Numbers:


TFSA Room for 2019: $6,000.
If you have been eligible to contribute to a TFSA since 2009 you  total available, cumulative room is $63,500

RRSP: 
2018: 18% of your earned income to a dollar limit of $26,230

Resources:




CRA My Account:
 Find your slips, carryforward information, contribution room and payment summary

If you retired in 2018 or are retiring soon, we offer a 60 minute 1:1 workshop to help you with everything from income splitting, to maximizing your deductions and ensuring tax efficiency in retirement. Schedule your workshop today 613-416-9593!

Free Income Tax Clinic for Low Income Seniors:
Join us Wednesday, April 3rd 12:00pm - 6:00pm and Thursday, April 4th 10:00am-3:00pm
Free for seniors with income below $25,000 (single individual) and $30,000 (total for a couple). Simple returns only (no rental properties or small business schedules).

***You will need an appointment in order to access the clinics and workshops.  You will be given a time to come in to drop off your slips.*** Schedule today via 613-416-9593  or info@retirementinview.ca

Thursday, February 28, 2019

RRSP vs TFSA: What to Consider Before you Invest




RRSPs and TFSAs are really a gift we have access to as Canadians from our Federal Government. They provide a great avenue for us to invest on a tax-sheltered basis.  The big benefit of the RRSP over the TFSA is the immediate tax deduction you receive when you make a contribution. So you are always going to have a bit of a head start with an RSP contribution because you are investing with money that hasn’t been taxed yet.

When to prioritize an RRSP: 

  • You don’t have a pension through your employer
  • You are on a higher end of tax brackets in terms of your income 
  • You are saving with a long term horizon
Once you are making over $40,000 annually an RRSP deduction starts to become more attractive as the likelihood of you being in a lower tax bracket in retirement has increased. The main strategy here is to deposit the money while you are in a higher tax bracket and defer the income tax until retirement when in all likelihood you will be a lower tax bracket.

When to prioritize the TFSA:

  • Your Income is under $40,000
  • You need flexibility
  • You need the money in the shorter term as more of a lump sum 
  • You have a hot stock tip :), as you will want to be able to access your windfall on a tax free basis 
  • Great savings vehicle for large purchases, renovations, trips, emergency fund
If you think you are going to be in a much higher tax bracket in the next couple of years, it may make sense to hang onto some of that RRSP room and only claim the deduction when you are in a higher tax bracket and getting more bang for your buck.


Some Quick Facts:

RRSP: 

  • Gains are only taxed when they are withdrawn. 
  • You lose your contribution room once you make a withdrawal unless you qualify for one of the prescribed programs (Home Buyers Plan or Life Long Learning Plan).


TFSA:

  • Gains and withdrawals are never taxed. 
  • You can replace any money you have withdrawn including the growth

RRSP and TFSA FAQs:

How should I invest the money in my TFSA and RRSP?:
Financial advisor or planner can help you decide which investments to choose based on your risk tolerance, time horizon and objectives. What you want is a low cost, balanced, and broadly diversified portfolio that is easy for you to follow and understand. 

Should I withdraw money from my RRSP to pay down debt?:
If you have exhausted all other avenues; you’ve seen a credit counselor, you have tried consolidating debt and you have no other options. You will want to make sure the tax hit you take from making the withdrawal is less than the interest you are paying.

Where do I go to get Fee Only Financial Advice?:

Start with a Certified Financial Planner who works on Fee Only or Fee for Service basis: these individuals will charge you just for advice and they have no motivation to sell you additional products. They typically charge by the hour or by the plan. 

Common mistakes I see:

Sometimes your accountant and your investment advisor are different people and they aren’t looking at your finances as a whole. Taxes and investments are intertwined so you should have someone that you trust to look at your finances as a whole.

Watch your limits. There are penalties for making over contributions into these plans.

I will often see people holding cash in non-registered savings accounts when they could be taking advantage of the tax savings in an RRSP. Taking the time to make sure your investments are in the right accounts is a crucial strategy for building wealth. Ask for help if you are not sure where everything should go.

Limits:
TFSA:  2019 limit 6,000 your cumulative limit $63,500 assuming you have been eligible to make contributions since they were introduced in 2009

RRSP: 18% of your previous year's income up to a limit of $26,230 for 2018 or $26,500 for 2019

Quick tips:

  • Take full advantage of group RRSP contribution matching plans through your employer if available
  • If you have a feeling you have an investment will increase in significant value, consider the TFSA
Related Resources:
Here are some of our Media Mentions this year around the topic of RRPS and TFSAs:
Global News: Money123 Newsletter 
CBC Radio Ontario Morning: RRSP Deadline (I appear at minute 26:00)