What To Do with My Severance?

Several of my clients work at the federal government which is offering a one time lump sum offer to replace the retiring lump sum when they retire. The money can roll into an RRSP (if you have the contribution room) and therefore avoid taxes until the money is withdrawn in the future. [click to continue…]

Loyalty: Does it Always Make Sense?

In general I think loyalty is a great quality. I consider myself a loyal person and I value when others are loyal to me. I hope that I am also teaching my daughters about loyalty.

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How is your retirement looking?

I spend a lot of time these days doing retirement projections for my clients. I have a great computer program that displays your current age, planned age of retirement, what CPP and OAS will be when you start to take income, as well as future values for any savings, RRSPs, pensions etc. This is a valuable tool because it shows if you are on track, or not. And if you are not, you can make some decisions as to what to do. For example do you need to be saving more, working longer or changing your expectations about retirement?

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Reducing Your Taxes by Income Splitting

In Canada, we have a progressive tax system. That means that as your income rises, the increased income amounts have higher tax rates. You can think of it as a stair case. On your first step (the first ~$37,000) in BC you’ll pay about 20% tax, the next step up, (around $7,000) pays tax at about 23%, the next $32,000 you make pays tax at about 30% etc. and so one. For any income over $150,000 in BC it will be taxed at 45.8%. Here are the BC tax rates in 2014 from the CRA website: [click to continue…]

I have enough life insurance…Don’t I?

How much life insurance is enough?
The stock answer to this important question used to be “10 times your salary.” But, in my experience this ‘one-size-fits-all’ formula fails to consider the most important factor – the life of the person being insured.

If you are single and debt-free, 10 times your salary is probably far too much. If you have four children, a large mortgage and a stay at home spouse: it probably isn’t. [click to continue…]

Yes Virginia, you do have to save.

Do I really have to save for the future?

“… it’s so much more fun to spend my money on clothes, eating out and vacations,”  or “I can’t save because I need money for mortgage, food,  gas, clothes and  kid’s activities… there’s nothing left at the end of my  month.”

If your ‘reason’ for not saving falls into one of these categories, the answer is: no you don’t have to save …AS LONG AS: [click to continue…]

“Guaranteed Life Withdrawal Benefit” (GLWB) or “Guaranteed Income for Life” Products

Guaranteed Income for Life products have become very popular over the past several years, particularly since the market downturn of 2008. These products were introduced to address the risk of people outliving their retirement savings. The GLWB and GIL are not actually new products, rather they are an enhancement to segregated fund products (which are basically mutual funds offered through an insurance company with additional guarantees). [click to continue…]

My adult child needs money.  Should I help?

There is no clear cut answer

If you don’t have much money yourself, my answer would be no.  As a general rule, you shouldn’t sacrifice your financial security to meet your adult child’s needs, unless you are sure you will have the time, resources, and health to make up the deficit and provide for your own retirement.

I met a woman with limited resources once, who took on a big mortgage [click to continue…]