We are living longer. In fact, statistics are telling us that our retirement will last longer than our carrier. I don\u2019t know what that tells you, but it tells me we can\u2019t sit back and keep putting off the planning for our financial future.<\/p>\n
Five common reasons why people haven\u2019t prepared a financial plan:<\/p>\n
\u2022 You think you do not have sufficient
\nincome or assets to warrant planning.
\n\u2022 You are confused and\/or intimidated by
\nthe financial planning process.
\n\u2022 You are afraid of the commitments
\ninherent in the financial planning process.
\n\u2022 You think that obtaining a financial
\nplanner will be too expensive.
\n\u2022 You resist planning for life\u2019s risks or
\npotential obstacles getting in your way\u2014
\nsuch as a critical illness, disability, or even a
\npremature death.<\/p>\n
Some of us don\u2019t mind leaving our homes with the beds unmade, they are used to fixing it before they get back in to go to bed.
\nOthers can\u2019t leave home until the whole house is perfect. Think of what you will be leaving behind for your loved ones. Planning
\nahead doesn\u2019t just provide financial security, it provides comfort in grief.<\/p>\n
Structured planning will lead to a secure future. Statistics discovered that two-thirds of Canadians who plan to retire in 2030 may not be saving at the levels required to meet household expenses in retirement.<\/p>\n
Today\u2019s retirees can expect to live longer with a much more active lifestyle than previous generations requiring prudent retirement planning. Living longer means that fixed-income products won\u2019t be enough to meet the long-term needs of most retirees.<\/p>\n
Your retirement savings need to be protected from inflation and the unexpected expenditures later in retirement. There is a
\nlot of data out there that suggests that you should match your anticipated monthly expenses with \u2018guaranteed\u2019 inflation protected
\nincome products.<\/p>\n
For example, if you need $2,000 a month, you should match it with your defined employee benefit pension, old-age security, CPP, and perhaps even an inflation indexed annuity. Once your basic living expenses have been met, other income can come from a structured pool of securities and mutual funds. This type of strategy requires a detailed estate plan and, of course, a well managed investment portfolio.<\/p>\n
Every person has their own unique needs, and investments are certainly no exception When would you use a segregated fund over
\namutual fund?<\/p>\n
A mutual fund is an investment vehicle that is made up of a pool of individual stocks. Mutual funds are operated by money
\nmanagers, who invest the fund\u2019s capital and attempt to produce capital gains and income for the fund\u2019s investors.<\/p>\n
A segregated fund is a pool of money, invested in stocks, bonds and\/or Treasury Bills, held solely for the benefit of the unit
\nholders of the fund. Inmost cases, the fund cannot be touched by creditors.<\/p>\n
Segregated funds are considered to be insurance products sold by insurance companies and, as a result, the governing bodies
\nand regulations responsible for overseeing segregated funds are usually the same ones that cover insurance companies.
\nAnother fundamental difference between segregated funds and mutual funds is that segregated funds offer a degree of protection
\nagainst investment losses.<\/p>\n
This differs from mutual funds because, in the unlikely event that all of the underlying stocks that make up a mutual fund
\nbecome worthless, investors stand to lose all of their investment. <\/p>\n
Segregated funds also have other benefits relating to the death benefit portion of their policies. Beneficiaries of the policy will usually directly receive the greater of the guaranteed death benefit or the market value of the fund holder\u2019s share.With a mutual fund, the market value of the fund represents the value that you will receive.<\/p>\n
There are definite advantages to investing in segregated funds. Peace of mind is a big one. Being able to go to bed at night and
\nknowing that, if the markets around the world crash, your money will still be there. RRSP or TFSA, what is the better option?
\nThis is yet another contradicting investment discussion.<\/p>\n
I imagine that many are still unsure of the many benefits of having a Tax Free Savings Account (TFSA). A TFSA is very similar to
\nthat of a Registered Retirement Savings Plan (RRSP), with the TFSA having the added advantage of not being penalized
\nby making withdrawals.<\/p>\n
An RRSP is a tax deferred savings plan for income-earning Canadians. Contributions to this plan are tax deductible and grow tax free until withdrawal. Each withdrawal amount is taxed at the individual\u2019s marginal tax rate. At age 71, you need to transfer the
\nfunds to a Registered Retirement Income Fund (RRIF), purchase a life annuity, and\/or cash in your RRSP.<\/p>\n
In contrast, a TFSA holder contributes after-tax dollars that grow without tax consequences, and the withdrawals are tax-fee
\nCanadians have the options of holding both an RRSP and a TFSA at the same time, or may select one or the other as their
\nretirement savings vehicle.Many advisors suggest that, if your income falls in a lower income tax bracket at retirement, an RRSP may be a better option.<\/p>\n
Taking the time to sit down with a financial advisor to review your financial position is the only way to properly determine which retirement investment vehicle is the best option for you. <\/p>\n
This will help you protect your investments, and therefore, help you reach your long-term goals.<\/p>\n
Long-Term Care Insurance (LTCI) is a new Canadian product. It is a great addition to everyone in their working years. I consider
\nit a fantastic asset protector. <\/p>\n
The inflated costs of long-term care expenses rise every year. According to the Council on Aging of Ottawa, approximately
\n45% of seniors will, at some point in their remaining years, require long-term care and spend time in a nursing home or long-term
\ncare facility. For a couple over age 65, there is a two-out-of three chance that at least one spouse will enter a facility at some point. In closing, please remember that if your colleague\/sibling\/neighbour has a particular investment, it doesn\u2019t mean it\u2019s right for you. Each person\u2019s retirement strategy is as unique as their fingerprint.<\/p>\n
Most of us tend to plan our vacations more diligently than our future. On that note, don\u2019t forget to buy your out-of province
\ninsurance for your getaways this summer.<\/p>\n
Another helpful tip: photocopy two sets of all of your family\u2019s personal documents, including the complete contents of your
\nwallet and\/or purse. Leave one set with a friend or relative and carry the other set in your luggage.<\/p>\n","protected":false},"excerpt":{"rendered":"
We are living longer. In fact, statistics are telling us that our retirement will last longer than our carrier. I don\u2019t know what that tells you, but it tells me we can\u2019t sit back and keep putting off the planning for our financial future. Five common reasons why people haven\u2019t prepared a financial plan: \u2022 […]<\/p>\n","protected":false},"author":1,"featured_media":39,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[10,1],"tags":[],"_links":{"self":[{"href":"https:\/\/latchmaninsurance.com\/articles\/wp-json\/wp\/v2\/posts\/32"}],"collection":[{"href":"https:\/\/latchmaninsurance.com\/articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/latchmaninsurance.com\/articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/latchmaninsurance.com\/articles\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/latchmaninsurance.com\/articles\/wp-json\/wp\/v2\/comments?post=32"}],"version-history":[{"count":1,"href":"https:\/\/latchmaninsurance.com\/articles\/wp-json\/wp\/v2\/posts\/32\/revisions"}],"predecessor-version":[{"id":33,"href":"https:\/\/latchmaninsurance.com\/articles\/wp-json\/wp\/v2\/posts\/32\/revisions\/33"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/latchmaninsurance.com\/articles\/wp-json\/wp\/v2\/media\/39"}],"wp:attachment":[{"href":"https:\/\/latchmaninsurance.com\/articles\/wp-json\/wp\/v2\/media?parent=32"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/latchmaninsurance.com\/articles\/wp-json\/wp\/v2\/categories?post=32"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/latchmaninsurance.com\/articles\/wp-json\/wp\/v2\/tags?post=32"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}