Posts

Are RRSPs overrated?

For many years RRSPs (Registered Retirement Savings Plans) were viewed as the best option available for retirement savings. However, the truth is that there are several variables to consider for your best investment options.

Here is a short list of questions to ask yourself:

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The Registered Disability Savings Plan (“RDSP”) is one of the least talked about Registered Savings Plans on the market today.  To be honest, this plan is becoming more recognized because the Government of Canada is marketing the plan for Canadian’s with a disability.  In the past, RDSP’s have flown under the radar; however, throughout the past year, more and more people have been asking about it.

It is a little more complicated than your typical RRSP or RESP.

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How to safeguard your retirement…

Have you ever been scuba diving? With scuba diving, you need to plan your dive, how long, what depth, do you have the right gear, etc. If you make a big mistake there are no do overs, it could cost you your life. Retirement planning is similar, you only get one shot at it and the difficulty is, people will only do it once in their lifetime. Fortunately, as a planner we get to experience retirement many times over as we walk alongside our clients.

For people that are in the building phase (ages 30-55) and those that are in their final approach to retirement (ages 55-65), it is crucial to make sure that certain key elements have been looked at. Read more

In life and finances, the government is our biggest business partner, usually in the form of taxes.

If you are a business owner:
1.  You are a tax collector (payroll taxes, GST, PST).
2.  The government is your business partner (corporate taxes).

As a family, taxes are often your largest expense:
1.  Income tax (as high as 45.7% of every dollar you earn).
2.  Sales taxes (GST, PST).
3.  Property taxes, and so on.

Fortunately, the government has provided different vehicles to help us plan when we pay our taxes (RRSP, TFSA, pensions, IPPs). These can all be great vehicles to help us defer, smooth out and/or lower our tax bills.

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For most Millennials, the thought of retirement can seem like light years away.  While a lot can and will happen between now and then, ignoring it or putting a plan on the back burner is a major mistake.  In a constantly evolving society, Generation Y faces unique challenges compared to those faced by previous generations. For this age group (18- to 34-year-olds), gaining an understanding of their financial situation and potential hurdles is critical.

When it comes to the question of being able to retire one day, the biggest advantage Millennials have on their side is time. They are generally considered to be anywhere from 30 to 45 years away from retirement. The most important benefit to their age bracket is the opportunity to take advantage of compound interest.  Defined as interest on top of interest or earnings on earnings, compound interest is in direct correlation with time, and understanding its power is key for Millennials hoping to retire one day.  In other words, when it comes to saving money, the sooner the better.

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To Split or not to Split…That is the question.

Income Splitting Strategies                        

So what is Income Splitting, and who is eligible to quality for the benefit?

Income Splitting is a way for families to split up their income so that if one spouse earns more than the other, the higher-earning spouse can allocate some of their income to their lower-earning spouse’s tax return. Since our tax system has graduated tax brackets, Income splitting is a great strategy to pay less household tax, and keep more money in your pocket!  Read more

You may have built a successful business but have you planned your exit strategy?

Preparing for succession may not be at the forefront of every business – but it should be.  Having a succession plan allows for employees, owners and the company itself to have a clear direction on how the company will move forward in its life cycle. Often, the best way to explain a concept is to share a real life story. Recently my Father, Phil Singer, and I were published in a nationally distributed magazine called Collision Quarterly. It is directed to members of the ARA (Automotive Retailers Association).

The article describes how our team at Singer Olfert assisted my Dad in the selling of his business a few years back. I will summarize the two-page article and you may click the link to read more about our story. Read more

Know What You’re Getting From Your Financial Advisor

Do you know how much you are paying your financial advisor? Are they doing a good job for you? Those both seem like reasonable questions, but most people cannot answer them. Can you?

One of the services that financial advisors provide is to manage your investments. When it comes to the world of investments, there are many different types you can choose from as well as many different people that offer them. So it’s no wonder that it can leave consumers with their head spinning. Here’s some information to help you make sure that you are receiving the best service for your situation. Read more

Planning On Selling Your Business…

Are you approaching retirement and planning on selling your business?
As an entrepreneur, you dreamed of building your own successful business. After all those years of hard work, you plan to reap the rewards in the form of a successful business sale. Sounds like a great plan! But, making the sale is not as easy as it may appear. Read more

How technology has made a difference…
Remember that great invention, the magic eight ball? You ask it a question, shake it and then turn it over to reveal the answer. If only all of life’s difficult questions could be answered so easily!

When it comes to retirement planning, people have a lot of questions but often times they do not know how to address them. Our goal is to help our clients have a clear understanding of where they are at financially, where they want to be in the future and how to get there. Sounds simple and yet so many Canadians are not prepared for retirement. Read more

It’s Not That Much Anymore…
Is a million enough? It used to be that having a million dollars was a big deal, right? You were set for life with no cares or worries financially. When did that change?

Have you ever made any statements such as; I remember when gas was only 25 cents per litre. As my kids remind me, yes I am getting older but it also means that inflation is slowly affecting the cost of living.

If you had a million dollars saved to provide for retirement, how much income would you have? Read more

What Are Your Options?
What is the best investment plan to use to save for retirement? It used to be fairly simple; the answer was maximizing your RRSP. Do you know what is the best strategy for your situation? Do you know what your options are?

Here is a basic overview:
1. Save – The first rule of thumb to be concerned about is that you are saving money for your future. Too many Canadians are spending all of what they earn and not putting away any money for their future. A good place to start is to aim at putting away 10% of what you make.

2. Tax Efficient – Ever since the launch of the TFSA, there has been a debate by financial professionals over which investment plan is more tax efficient to use, the RRSP or TFSA? My opinion is that it depends on your situation both now and in the future and should be looked at on a case-by-case basis to see what fits best. I would be cautious if a financial advisor is always only promoting one plan type over the other, both have their benefits. (For more info on TFSAs, see my article from Sept 2013 – http://jaybrecknell.ca/demystifying-tfsa/)

3. Business Owner – If you are a business owner the question can get even more complex as you have more options. Should you use your RRSP, TFSA or instead save your retirement funds in a holding company? Since corporate tax rates are at an all time low in Canada more business owners are saving corporately versus in a RRSP or TFSA. There can be many benefits to saving corporately as it can provide flexibility to the business owner. As this can be complex it needs to be put together by a professional that understands your corporate structure and the tax and legal rules that are involved.

As with any financial strategy we would recommend ensuring that you have your personal situation reviewed by a professional to make sure that is done in the best way possible. If you have any questions or would like your plan reviewed feel free to contact us.

 

Questions?

Did Your Pension Move When You Did?
Do you have a UK (United Kingdom) pension? There are a good number of British expatriates who are now Canadian residents that have pensions back in the UK. Have you forgotten about that plan from an old employer? Do you know your options?

When I create a retirement plan for a client I review what savings and pensions they may have. Quite often, past pension plans can be forgotten or misplaced, so this exploratory part of the process is critical so that nothing is missed. Read more