Want a subject matter everyone has a strong opinion on other than politics and religion? Look no further than the Reverse Mortgage program available to Canadian seniors, a subject misunderstood by far too many retirees.
As a financial advisor to a large group of seniors I have seen this product successfully create an unexpected source of wealth to allow retires to maintain or even enhance their standard of living.
You have done the hard part and made it to your ‘50s in better financial shape than where you were at a decade ago. If you have children, they are now launched, and their financial dependency on you has hopefully decreased. If you did not have children, you probably used the additional cash flow to hammer away at your mortgage and build up your assets.
Now as you look at your options for retirement you are wondering, “can I do this early or am I looking at the traditional age of 65 to make it happen?”
Over the years I have reviewed a handful of my client’s RRSPs who had their assets with one of my competitors, and several times I have been shocked with how poorly it was communicated to the customer how important the beneficiary selection is.
In the last year a long-time senior client of mine sadly died unexpected and had two RRIFs. One with me showing his spouse as beneficiary (as Successor Annuitant/Owner) and the second with an online self service provider with his “Estate” as beneficiary.
In 2009 the federal government introduced the Tax Free Savings Account concept to Canadians. For anyone 18 years or older the TFSA has been whole-heartedly embraced as a tax-efficient vehicle to save money for short and long-term needs.
However, many people do not fully understand the importance of proper beneficiary designations and subsequently, they miss additional tax planning opportunities.
On February 24th, 2022, Russia invaded the Ukraine, setting off an inflation spiral not seen since the early 1980s. As Russia is the 3rd largest producer of oil and natural gas (behind Saudi Arabia and the USA) the impact of declining reserves was immediate in the prices we paid at the pump this last Spring.
The rise in oil and gas prices in turn escalated the cost of all consumer goods, services, and food items so that the rate of inflation for June 2022 was 9.3%.
What exactly is inflation in economic terms?
With over 350 clients Adam and I are consistently asked a number of key financial questions that we thought all of you would appreciate reading.
Here is the Top 10 list of the most frequently asked questions:
In December 2021 the federal government announced that the 2022 annual TFSA limit will remain at $6,000. This means the cumulative tax-sheltered lifetime limit is now at $81,500.
As I have explained to many clients, there is no “downside” to owning a TFSA, any TFSA is better than no TFSA. However, many people make mistakes with the accounts which can cost them in the long term.
Since my 1980 start in the financial industry, I have had many clients retire only to realize a big disconnect between how they envisioned their retirement versus the assets that they have accumulated.
For most people, it is not just one mistake made over the years, but rather a multitude of poor financial decisions, many of which were implemented mid-life (from age 35 to 55).
The 15 most common reasons that financial health was negatively impacted:
Draft a Will
Dying “Intestate” creates legal and financial obstacles for your family, something which could easily be avoided with a Will.
By not having a Will the government will use a default selection, stating how assets are to be split between your spouse and children
With February being the busiest month of RRSP season, I am often asked during annual reviews “what is the best way to get the money out of my RRSP?”
Canada Revenue Agency (CRA) allows RRSP holders to defer withdrawals until the end of the year they turn 71. At this point in time, the RRSP must be turned into a pension (either an Annuity or RRIF) or it will be redeemed in full on December 31st of that year.