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Life Insurance – Do You Buy, Rent, or Borrow?

Without a doubt, life insurance is valuable protection provided by your employee benefit plan, but should it be the only life insurance coverage you have?  Probably not, if you want to ensure you have sufficient long term protection to cover all your family’s financial needs should you die unexpectedly.

In a recent study conducted by the Life Insurance and Market Research Association (LIMRA), it was reported that 61% of Canadians hold some form of life insurance.  Surprisingly, it also revealed that only 38% of Canadians own an individual life insurance contract. This means that almost 40% rely solely on the life insurance provided by their employer. This can be problematic.  The disadvantages of having your employee benefit plan as your only life insurance protection include the following:

It is probably not enough to pay off your mortgage and/or provide income for your spouse and family.

The amount of life insurance protection provided by group insurance in most cases is equal to only one or two times annual income.  If this is not enough to do the job, the addition of individual life insurance should be considered. Read more

Private Health Spending Plans for the Owner/Operator Business

Individuals who have incorporated their business such as consultants, contractors and professionals often find that providing affordable health and dental care coverage for themselves and their families can be an expensive proposition.

Take Bob for example.  Bob had just left his architectural firm to set up on his own.  In looking at the options available for him to replace his previous firm’s Extended Health and Dental coverage for he and his family, he discovered that the monthly premium would be between $400 and $500 per month.  This was for a plan that didn’t provide coverage for all practitioners and procedures, had an annual limit on the benefits, and a co-insurance factor of 20% (only 80% of eligible costs were covered).  There wasn’t even any orthodontia coverage although he could purchase that in limited amounts at an additional cost!  He also had to move quickly to replace his lost coverage as he had a pre-existing condition that most likely would not be covered if he waited too long to implement the new plan. Read more

Optimizing Wealth Through Asset Re-Allocation

If you are an active investor, your investment holdings probably include many different asset classes.  For many investors, diversification is a very important part of the wealth accumulation process to help manage risk and reduce volatility.  Your investment portfolio might include stocks, bonds, equity funds, real estate and commodities.  All these investment assets share a common characteristic – their yield is exposed to tax.  From a taxation standpoint, investment assets fall into the following categories:

Tax Adverse

The income from these investments are taxed at the top rates.  They include bonds, certificates of deposits, savings accounts, rents etc.  Depending on the province, these investments may be taxed at rates of approximately 50% or more. (For example, Alberta 48.0%, BC 49.8%, Manitoba 50.4%, Ontario 53.53%, Nova Scotia 54.0%). Read more

Canada Pension Plan – Should You Take it Early?

New Rules governing the Canada Pension Plan took full effect in 2016.  Under these rules, the earliest you can take your CPP Pension is age 60, the latest is 70. The standard question regarding CPP remains the same – should I take it early or wait?

If you take it at the earliest age possible, age 60, your CPP income will be reduced by 0.6% each month you receive your benefit prior to age 65.  In other words, electing to take your CPP at age 60 will provide an income of 36% less than if you waited until age 65.

CPP benefits may also be delayed until age 70 so delaying your CPP benefits after age 65 will result in an increased income of 0.7% for each month of deferral.  As a result, at age 70, the retiree would have additional monthly income of 42% over that what he or she would have had at 65 and approximately 120% more than taking the benefit at age 60. The question now becomes, “how long do you think you will live?” Read more

Prepare in Advance for Next Year’s Tax Filing

Phew! Tax season is over!  You have hopefully just filed your 2017 personal income tax returns.  Was it a satisfying experience for you?  Do you feel a sense of accomplishment or dismay?  For many, the April 30th deadline seems to arrive way too soon.  If this is the case with you, starting the process much earlier would seem to be the answer.

The process should include proper record keeping, taking advantage of the tax saving methods available to you, and, perhaps, finally getting a professional to complete and file your return on your behalf.  The problem with handing your taxes alone is that often people don’t know what they don’t know.  This results in paying more in taxes than was necessary.  The cost of a professional completing your taxes potentially could be offset by the savings that might be gained.

Even if you earned little to no income, filing your return is a good idea and could prove to be advantageous.  This is because there are a number of federal and provincial government programs that you might be eligible for if your declared income is below a certain threshold.  You can refer to the Government of Canada website for the child and family benefits that might be available to you. Read more

Six Important Reasons to have a Will

It has been said that a Will is the last message you will leave your family.  Having a Will can provide clear direction as to what your wishes are and who will get what.  Die without a Will (known as dying intestate) and chaos will likely be the result.  Having a Will allows you to provide for certainty instead of chaos.

Most of the reasons to have a Will have to do with what happens if you don’t have one and that often will depend on what province you reside in.  Each provincial government has its own Wills and Estate legislation which also provides for the rules regarding intestacy.  The following are some of the reasons to have a Will and what could result without one.

  1. Informs your family how and when your property is to be distributed

Your Will affords you the opportunity to give clear instructions as to whom will receive your wealth.  It also allows you to make bequests of certain items such as family heirlooms which you may wish to leave to a specific individual. For those who wish to leave funds to a charity, the Will allows you to do this.  Without a Will, this opportunity may be lost. The bottom line is that you make the call.  Dying without a Will means that the provincial government will make the determinationon how your estate is to be distributed depending on the intestacy laws. Read more

ARTICLES OF INTEREST

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How health coaching can help diabetes patients

With diabetes on the rise, how well employees manage the chronic disease should be a concern for employers, Diana Sherifali, an associate professor at McMaster University’s school of nursing, told Benefits Canada‘s 2018 Healthy Outcomes conference in May.

Since diabetes often comes with other chronic conditions like cardiovascular disease, hypertension and high cholesterol, mitigating it is all the more necessary, she said. In addition, the stress of dealing with the condition can become extreme to the point of being a precursor to moderate depression, she added. Read more »