Keep in mind that, despite new disclosure rules to increase transparency, the fee shown on your investment report may not be the total fee you paid your adviser
When comparing your investment returns to that of others or those you see published, selection and timing are two critical issues. Make sure you’re comparing apples to apples: that you’re weighing similar investments. Each investor has their own risk tolerance and objectives. What’s right for your friend, neighbour or family member may not be right for…
It depends. As with all financial planning questions, no one answer fits every situation
“Did I need to take the insurance the bank sold me when I got my mortgage? Do I need mortgage insurance at all?” C.P. wrote and asked. I’m often asked this and the answer is usually the same: That depends. As with all financial planning questions, no one answer fits every situation. The simple answer in…
Can you afford to hold off and increase your payments later? Will you need more CPP and OAS later in life? And how long do you expect to live?
Most people know they can start collecting their Canada Pension Plan (CPP) at age 60, even though they’ll get smaller monthly payments than if they waited until 65. Many people just want the money now and don’t care about any added benefits to delaying CPP and Old Age Security (OAS). The standard CPP and OAS…
A financial plan is a six-step financial planning process that starts with having an initial meeting with your prospective planner
Many people don’t understand the difference between a financial plan and an investment plan, and often assume that they’re one and the same. They’re not. An investment plan is focused solely on your investments and the return on those investments, which is important. But that’s only part of the story. What happens to your investment plan…
There’s no hiding from the success tax, but several things can help legally reduce or even eliminate the amount your estate or your heirs pay
There’s no official estate tax in Canada but we do have what I call the success tax. It's what we pay if we’ve been financially successful in a lifetime of investing and asset accumulation. The more successful you’ve been, the greater the tax could be. If you have assets that will be taxable when sold or when deemed to have been…
Seek professional help if your financial plan doesn't protect you from the four Ds: death, divorce, disability and disaster
Your financial plan should provide you with as much protection as possible from the four Ds: death, divorce, disability and disaster. While you can’t totally protect yourself from any of these events, you should at least have a good plan in place in case something does happen. Death is the only D that can’t be avoided,…
Be sure to read the fine print if you see a variable-rate investment such as an ETF or a mutual fund advertising what looks like a promised future return
Long-term investors need to be concerned about personal annualized return – the return on their money over the entire period of the investment. When investing in guaranteed investment certificates (GICs), your annualized return is known when you make your investment. For example, you buy a five-year GIC that pays three per cent so you know…
TFSAs provide great options. If you build up the money in your TFSA while you’re working, you can draw from it tax-free any time
K.M. wrote to ask if she should stop making registered retirement savings plan (RRSP) contributions and instead focus on her tax-free savings account (TFSA). With a little personal information from K.M., we decided it would be best for her to focus on her TFSA. Here’s why: K.M. works in a job she’s likely to leave…
Examining the three types of permanent insurance: term to 100, whole life and universal life plans
There are many types of insurance and many ways to look at how it fits into your financial plan. In my last column I wrote about term insurance being the “if you die prematurely” option. In this column, I'm going to do a basic review of permanent life insurance plans. There are three types of…
Term insurance allows the most amount of coverage with the least amount of cost for a select period of time
From a pure income replacement point of view, perhaps basic term life insurance should be called death insurance. It isn't because people do not like to think of their own mortality. Like all insurance, you pay a monthly or annual premium for life insurance. In exchange, the insurance company pays you – or in the case…
When comparing your investment returns to that of others or those you see published, selection and timing are two critical issues. Make sure you’re comparing apples to apples: that you’re weighing similar investments. Each investor has their own risk tolerance and objectives. What’s right for your friend, neighbour or family member may not be right for…
