Monday, January 30, 2012

RRSP facts – basics you need to know to save

Preparing for retirement should start early with a savings strategy that will make it possible for you to accumulate the most wealth for use (and enjoyment!) through all your retirement years.  The best retirement savings strategy for most Canadians is a Registered Retirement Savings Plan (RRSP) because your contributions and all the income that accumulates in your plan are tax deferred until you start using that money in retirement.  Add in the fact that your contributions can be used to reduce taxes and the magic of compounding that enhances RRSP growth over time, and it’s easy to see why a registered plan makes such good financial sense.

Here are some basic facts that will help you get the most into and out of your RRSP.
  • Be deadline driven This year, the contribution deadline for RRSPs is February 29, 2012 – don’t miss it!
  • Be a maximizer Always make your maximum contribution each year – you’ll get the most in immediate tax savings and in long-term growth. How much you can personally contribute can be found on your most recent notice of assessment from the Canada Revenue Agency (CRA).
  • Play catch up Fill up unused contribution room fast. You can do that in a single year or over a number of years until you reach age 71 – but quicker is better.
  • Match savings to income As you make more money, make larger contributions to your RRSP and you’ll have more income in retirement.
  • Consider borrowing to save An RRSP loan can be a good thing to maximize this year’s contribution or catch up on past contributions – but only if you can get one at a low interest rate and pay it back as quickly as possible. Even better: use your RRSP tax savings to help pay off the loan.
  • Choose a beneficiary Designate a beneficiary for your RRSP (in Qu├ębec, this must be done through a will). Generally, RRSP assets do not form part of your estate and do not attract probate fees. If your beneficiary is your spouse/partner or a disabled child/grandchild, your RRSP can be transferred tax-deferred to your beneficiary’s registered plan.
Contributing to your RRSP is an important way to save for retirement – but it’s just one part of a solid retirement plan. Get all the facts (and good advice) from your professional advisor to make sure your retirement dreams blossom into enjoyable reality.

Monday, January 16, 2012

Too much of a good thing? Information isn’t knowledge.

You can get it if you want it – everywhere! Information, that is.  And these days many consumers turn to social media and other electronic sources for information and guidance. But are Twitter, Facebook, blogs and websites the best places to get what you need?  When it comes to sound financial and investment information that reflects your life and your goals, the answer may be “no”. Here’s why.

It’s so easy Having an abundance of information at your fingertips is great -- but there are also many risks.  The top risk: Is the information reliable?  You key in your investment-related question into a search engine and bingo – pages and pages of websites to choose from.  And while that’s impressive, it’s also a problem.  Now you have to sort through a mash up of unfiltered, unverified sources – and that can be a lengthy and frustrating process.  It can also lead you to an abundance of poorly researched or woefully incorrect information.  And that can lead you to make decisions based on false evidence or ideas that are not in the best interest of you and your family.

It’s so not you  Whether the information you source is correct or not (and most of the time, it’s tough to tell) one thing you can count on is this: That information may not properly take you into account.  You’re getting wallpaper info not personal advice.  You are you – an individual with a unique life, characteristics and goals that change and evolve over time.  So even if you manage to hit on reliable internet information, how can you tell that the info is right and beneficial for your specific circumstances?

It’s so personal That’s where professional financial advice comes into the picture.  It is information and expertise you can trust that puts you at the centre of things, where you belong.

Your professional advisor is a valuable, face-to-face (not face-to-Facebook) resource who will assess your individual (and evolving) circumstances and provide you with a right and reasonable plan to meet your goals as they are today and as they will be tomorrow.  Whether you’re searching for: investment advice, how to save taxes or protect your family, how to pay for your dream home or fund a dream retirement; partnering with a professional will help you make informed, confident decisions you can trust.

Eliminate uncertainty, frustration and confusion and sleep better at night. Your search for the best financial and investment advice begins and ends with your professional advisor.

Sunday, January 8, 2012

Resolve to take control of your finances ... not just for the New Year

We’re now into January and if you are like most people, your New Year’s resolution has already fallen by the wayside.  While this may not be an issue if your resolution was to try the latest fitness craze, hopefully you’re taking a different approach with your finances.
The New Year is a good time to decide to take control of or reevaluate your finances, and a proper financial resolution should include investment planning, cash flow planning, education planning, estate planning, insurance planning, retirement planning, and income tax planning.  The key to a successful financial plan however, is tailoring each of those elements to you and your needs.  This might seem overwhelming to some, but creating and maintaining a financial plan is a long-term endeavor and is something that needs to be revisited regularly to ensure it still addresses your goals and concerns.  Therefore, to help you achieve your goal, it is a good idea to put a professional advisor on your financial team to make sure you get exactly the right plan for your situation.  Just as we use personal trainers to motivate us and help us achieve our fitness goals, a financial advisor with the qualifications, tools and track record you can count on, is key.  They will work with you both today and into the future.

Wednesday, January 4, 2012

TFSA facts – will it work for you?

In just a couple of years since it was introduced by the federal government, the Tax-Free Savings Account (TFSA) has become a very popular personal savings vehicle. And with good reason: Who doesn’t like the idea of tax-free savings growth? In fact, the TFSA has been called the most important savings option since the 1950’s launch of Registered Retirement Savings Plans (RRSPs). If you haven’t already hopped on board the TFSA savings wagon, you may be asking yourself these questions: Is a TFSA really that good? Should I have one? Will it work for me? Good questions – here are the answers.

How a TFSA works

Every Canadian over the age of 18 is eligible to save up to $5,000 a year in a TFSA and the investments held within the TFSA grows on a tax-free basis. TFSA withdrawals can be made at any time for any reason – and the withdrawn money is tax-free.

The value of the TFSA eligible investments is increased by making the most of all available contribution room. For example, you can contribute $5,000 a year plus the total of withdrawals made in the previous year. And all the contribution room you don’t use right away accumulates year after year so you can fill it any time you choose. It’s important to know that contributions to investments held in a TFSA do not affect RRSP contribution room.

TFSAs provide investment flexibility. TFSA-eligible investments are the same as those available for investments held within RRSPs, including mutual funds and money market funds, Guaranteed Investment Certificates (GICs), publicly traded securities, and government and corporate bonds.

How a TFSA works for you

A TFSA is a worthwhile investment option for almost every income-earning or retired Canadian because it works so well for both short- and long-term financial goals like these:
  • Providing an immediate source of emergency funds
  • Saving for just about anything – from a new car or cottage to a dream vacation
  • Saving for the down payment on a new home or even starting a business
  • Reducing taxes on your non-registered investments
  • Adding to your retirement savings. By the way, TFSA withdrawals don’t affect eligibility for such income-tested benefits as Old Age Security (OAS)
  • Splitting income with your spouse to minimize taxes

To explore these and the many other ways a TFSA can work for you, and to make sure you’ll always get the most from all the elements in your financial plan, talk to your professional advisor.