Canada Turnkey Video Library


Canada 1. Don’t Let Timing Ruin Your Retirement

Did you know that one of the greatest risks to your retirement portfolio can happen in the first years that you retire? The timing of when you begin withdrawing money from your investments can dramatically impact your long-term wealth. It’s called sequence of return risk and the danger is very real. When you making regular withdrawals from investments when market returns are down your portfolio shrinks faster because the investments are worth less. If that happens early in retirement it’s more difficult to rebuild your assets and get back on track. You could even deplete your portfolio before the good returns show up. But there are ways to protect yourself from negative returns in the early years of your retirement including reducing risk in your portfolio and modifying spending in down market years. For more information on how to achieve a successful retirement call or visit our website today.

Canada 2. Is A Tax Free Retirement possible?

A question we’re commonly asked is, is it possible to drastically reduce taxes in retirement or even eliminate them? It is possible, but you must start planning before you retire. Many people don’t realize that when you contribute to a Registered Retirement Savings Plan to accumulate savings, and then begin drawing out money through the Registered Retirement Income Fund, it is fully taxed upon withdrawal. So, the key is to diversify your retirement income. You can do that by opening a Tax Free Savings Account that allows savings to accumulate tax free up to certain limits, while you’re still working. Once you’re retired, it’s all about monitoring your adjusted gross income to control your tax bracket. You can limit the amount of taxable income you need to withdraw by pulling income from your tax-free accounts. Also, by withdrawing from non-taxable accounts, instead of selling investments that trigger taxable income, you can reduce the taxable income that can affect your OAS benefits. At about $75,000 taxable income your OAS benefits start to get clawed back and are eliminated at about $130,000 taxable. To find out how you can reduce your taxes in your retirement years, call us or visit our website today.

Canada 3. When is the Best Time to Retire?

You might be asking yourself when should I retire? Should I retire early or defer it? Deciding when to retire may not be one decision, but a series of decisions and calculations. For example, you’ll need to estimate not only your anticipated expenses, but also what sources of retirement income you’ll have and how long you’ll need your retirement savings to last. You’ll need to take into account your life expectancy and health, as well as when you want to start receiving Old Age Security or Canada Pension Plan benefits. You’ll also want to consider when you’ll start to tap your retirement savings. Each of these factors may affect the others, as part of an overall retirement income plan. Contact us today for a complimentary consultation about your retirement planning.

Canada 4. How Do You Create a Simple Retirement Income

A retirement income plan is needed because life changes in retirement. Your retirement plan should account for every year in retirement, even past your life expectancy. For each year, make a list for you and your spouse that includes Old Age Security income, Canada Pension Plan and annuity income. Also, list earnings from investments and working part-time, list any other fixed and regular income sources for each year. List your desired gross retirement income. You need be sure to include taxes, the effects of inflation and potential medical expenses. Then for each year, determine the gap or surplus, by subtracting expenses from income. If you see that you have gaps in your retirement plan, give us a call today. We can make sure you have a strategy to help you reach your retirement goals.

Canada 5. Is Estate Planning Only For The Rich?

You’ve worked so hard to build your net worth, but it could fall into a sinkhole if you don’t do estate planning. Estate planning isn’t just for the rich. It is a necessity for everyone. An estate plan will allow you to pass along what you own to whom you want to receive it, the way you want them to receive it and when you want them to receive it. A will is a good start. Seventy percent of Canadians with children under 18 in the household don’t have wills. If you don’t make a will, the courts may decide the distribution of your assets for you. The will should take into account all you own and all the potential beneficiaries. You may want to consider adding a Continuing Power of Attorney for Property and a Continuing Power of Attorney for Personal Property. Both these documents allow someone else to act on your behalf in case you are incapacitated. It’s also important that all investment titling and beneficiary designations are working in concert with your will or other estate planning documents. Speak with your estate and tax planning professionals to evaluate any potential tax ramifications and call us today to learn more about strategies and resources that may help you preserve your nest egg.

Canada 6 – How to Allocate Assets Within Your Portfolio When You Retire

If you’re nearing retirement you may need to consider asset allocation in a different way. Be aware that asset allocation cannot eliminate the risk of fluctuating prices and uncertain returns. When you were younger, you may have invested in stocks and mutual funds for the growth and perhaps the diversification offered. You had time on your side. You invested for the long haul and could weather the ups and downs of the stock market. But when you’re nearing or in retirement, the ground rules change. Losses are difficult to recover and your income stream could suffer, just when you’re counting on it. Often a balance between stocks and bonds is used, because these investments usually move in opposite directions. This is where asset allocation comes into play because investments may go up and down and your financial needs may vary. Your planning must allow for contingencies. Various types of investments can help accomplish this by allocating investments for growth potential, guaranteed income risk management, Canadians with children under 18 and taxes. We can develop a strategy to help you meet your financial goals. Please give us a call today to find out how you can allocate your assets for your retirement.

Canada 7 – 5 Common Mistakes to Avoid in Retirement

You’ve been saving for your retirement for decades. Don’t undermine your own plans by making these five common mistakes when you retire.
First, don’t retire too soon. Lifespans are increasing and many retirees underestimate their life expectancy when calculating the money needed to live on. The second mistake to avoid is spending too much in the first years. It’s easy to overspend while playing with your newfound freedom, but it can cause shortfalls later in life. Budget accordingly and stick to your plan. The third mistake is underestimating medical expenses and over estimating OAS benefits. Avoid surprises by factoring in enough money to supplement OAS and consider buying added health insurance, like Long Term Care to fill in any gaps. Another mistake is taking OAS and CPP benefits too early. CPP can start at age 60, but OAS starts at age 65. But, the longer you wait, the higher your monthly benefit will be. Lastly, don’t fail to do estate planning. Having an estate plan and a will maximizes the chances that your wishes will be followed and your assets will go where you dictate. It’s easy to make mistakes in the beginning stages of retirement. For more information on retirement, please give us a call or stop by our website

Canada 8 – Should I Invest In Stocks or Bonds?

Stocks and Bonds are two of the most common investment asset categories. When you invest in more than one category, you reduce your overall investment risk. So, many people add a mix of both stocks and bonds to diversify their portfolio. The right mix depends largely on your financial goals, because these two asset classes play different roles. Stocks are a form of ownership. A company sells stocks to raise money. When you purchase a share of stock, you’re purchasing an ownership stake in the company. Bonds represent debt. A government or company issues a bond or an I.O.U to raise money, with a promise to pay back your original investment, along with regular interest payments. The volatility of stocks makes them riskier than bonds, but they also offer the greatest potential for growth, especially in the long term. Bonds may offer more modest returns, but are typically less volatile than stocks and are also advantageous for their income from the interest payments. For more information on the right investment mix for your financial goals, please give us a call or visit our website today.

Canada 9. What’s Your Risk Tolerance?

Risk tolerance is the level of risk or market ups and downs an investor is willing and able to tolerate. An aggressive investor, one with a high risk tolerance, is willing to risk greater loss to potentially maximize returns, while a conservative investor prefers investments that have a lower risk of negatively impacting the portfolio’s value. It’s important to understand your own risk tolerance when building an investment portfolio so that you won’t over react during market swings. The first step toward gauging your risk tolerance is to outline your financial goals, such as saving for college a car or a new home. Then create a timeline for when you’ll need the money. Lower risk investments are best for short-term goals, since there’s a little time to recover from loss. Keep in mind that investments with a very low risk will grow more slowly and could even lose purchasing power due to inflation and taxes. Also consider your personal comfort level in investing. Can you sleep at night with the choices you’ve made in times of market volatility? To learn more about how risk tolerance affects your investment strategy, please call or visit our website today.

Canada 10. Why Is Asset Allocation Important to Investing?

To keep your investment portfolio on target for financial goals, you want to balance risk and diversify your assets. That’s the purpose of asset allocation the process of dividing your portfolio among major categories like cash, stocks and bonds. Historically, the returns on these three major asset categories have not moved up and down at the same time. So including a mix of these assets in your portfolio can protect against losses. There is no perfect formula for asset allocation. It differs with each individual, depending on their risk tolerance and time horizon. Risk tolerance is the amount of your investment you’re willing or able to lose in exchange for greater possible returns. Risk tolerance is closely tied to time horizon, or the amount of time you have to invest. An investor saving to make a down payment on a home in five years might choose less risky investments than someone saving for retirement in 20 years. A longer time horizon allows more time to recover from loss. Asset allocation may be one of the most important investment decisions you make with your portfolio. Call us today to learn more.

Canada 11. How To Make Your Retirement Tax Free

Are you planning for retirement and wondering how to get the most out of your Registered Retirement Savings Plan? What many people don’t know is that life insurance can provide a wonderful vehicle for a tax-free retirement. Here’s how it works. When you put money into a RRSP, you get a tax deduction and the money grows tax deferred. When you withdraw the money from an RRIF in retirement, you pay taxes on it. But, when you purchase a life insurance policy, it’s different. You don’t receive a tax deduction at first, but the money grows tax deferred just like an RRSP. But, when you withdraw the money from life insurance it’s tax free by a collateral assignment. This could add up to savings of four hundred percent on taxes over a 30-year period. To learn more about smart retirement saving strategies, give us a call or visit our website today.

Canada 12. Do You Know The Silent Killer for Retirees?

The medical profession refers to high blood pressure as the silent killer. In investing, the silent killer is inflation. The minimum return on any Registered Retirement Savings Plan must be at least equal to inflation. Here’s why. Suppose your retirement goal is to withdraw 90 thousand dollars per year from your Registered Retirement Income Fund? To maintain your purchasing power, you must adjust your withdrawal amount for the inflation factor. That means that to get ninety thousand dollars per year, at an inflation rate of 3%, your withdrawal amount in year fifteen will be one hundred forty thousand, two hundred and fifteen dollars. Are you on track to manage inflation during your retirement? To learn more give us a call today or visit our website.

Canada 13. How Do Ultra High Net Worth Investors Invest?

A question we get asked frequently is, “How do the ultra-wealthy invest?” One thing that everyone can agree on is that the investment landscape has changed. According to research from Callan Associates, investors need to take approximately 6 times more risk to achieve the same return that a 100% investment in cash and bonds generated 30 years ago. Institutional and Ultra High Net worth clients realize this and may invest in alternatives to complement traditional investment strategies such as stocks, bonds, mutual funds, and ETFs. Even the Canada Pension Plan invests over 50% of its assets in alternatives. One type of alternative is known as structured products, and although it is created by Canada’s Big Banks, it’s only available through brokerage channels. This investment solution can provide some known objectives, such as creating a barrier of protection against principal loss and achieving returns or income in sideways and down markets. Constructing a portfolio without alternatives is like driving without airbags and a seatbelt. To find out more about alternatives, call us today.

Canada 14. Wealth Creation

Here are some simple strategies you can use for your goals to create – and maintain – personal wealth. The first is to spend less than you make, and to maximize this effect, find ways to earn more while cutting expenses. Another strategy is not to leave savings sitting in a bank account earning little to nothing, but instead put your hard-earned savings to work. People who save consistently often underestimate the power of compound interest, where you can earn interest on your money… and then interest on the interest! If you invested $100,000 and received 10% return on your money, you will have at the end of year one $110,000. After year two, you will have $121,000, because you will have earned a return on your principal … and the interest. At the end of year ten, you would have a total of $259,374.25 of which $159,374.25 was a result of compound interest … your money making you money. Referred to as passive income, this is how wealth creation works… allowing you to spend more time enjoying life. To find out more about creating wealth, call us today.

Canada 15. Why Most Canadians Won’t become Millionaires

Too many Canadians want financial instant gratification and succumb to FOMO… the fear of missing out. Others are obsessed with keeping up with the Joneses by spending money to impress people they don’t even like. That’s why most Canadians lack the discipline required to be become a millionaire.The first secret to achieving financial success is deferred gratification, because it’s critical to spend less than you make. The second, is that most Canadians don’t save enough – only an average of 7.81% of their income over the past 80 years. The third is that they fail to leverage the power of time. For example, if you save $1,500 per month, in the first 10 years, this will become $195,019.37 based on an 8% interest rate. Continue to save that same $1,500 a month for 20 years and it becomes $423,760.95. In 40 years, that initial $1,500 would become $1,006,743… you’re a millionaire! To find out more about building wealth, call us today.

Canada 16. Covering the High Cost of Education

Are you concerned about covering the rising cost of education? Each child or grandchild is eligible to get up to $7,200 of free grant money from the Canadian government under the Registered Education Savings Plan. These funds can grow tax-free and can be used to cover education costs in the future. The maximum annual grants are $500 per year per beneficiary on a contribution of $2,500 per year – that’s a 20% return. If you have or plan on having more than one child, a family plan may be a good option, as it provides you flexibility in how to best utilize the funds to cover each child. The funds you invest will continue to grow tax free, if they remain in the Registered Education Savings Plan. The grants and investment returns are taxed while they are in the hands of the child, only when they start making withdrawals. This is financially extremely advantageous, as children are usually in a low tax bracket while attending school. To find out more about the free grant money available under RESP, call us today.

Canada 17. Covering the High Cost of Education

Are you a HENRY? A HENRY is a term for a high-income earner, a great saver… but not rich yet. Are you putting the next dollar you save into a Registered Retirement Savings Plan or into a Tax-Free Savings Account? Why not consider doing both? You may be thinking, “I don’t have the money to do both.” But you can… and here’s how. Let’s say you earned $115,000 gross annual income for the year and you managed to save 14% of your gross annual income or $16,100. If you take that $16,100 and contribute to a Registered Retirement Savings Plan, given the current margin tax brackets, you defer tax at 38.5%. That will provide you with a tax refund of $6,198.50. Contribute the $6,000 to your Tax-Free Savings Account, assuming you earn 8% a year, and repeat this strategy every year. After 20 years, you will have amassed over a million dollars in retirement savings! If you’re a HENRY, call us today.

Canada 18. Which Retirement Plan Should I Choose?

The most common retirement plans are Defined Benefit and Defined Contribution pension plans offered by employers. DB pension plans are administered through your employer and the income you receive in retirement is calculated by your salary and number of years you contributed into the plan. With a DC pension plan, you decide how much to contribute into the plan and your employer will match a portion. You may have some choice in deciding how your funds are invested, and the amount you receive in retirement depends on how your plan is managed and how well the investments perform. When you retire or leave an employer, make sure that you review your options with your advisor to determine if it makes sense to transfer the assets out of the employer plan and take control of them. You can open a Registered Retirement Savings Plan or a Tax-Free Savings Account through an investment firm or a bank. When you contribute funds to an RRSP, you receive a tax deduction, and the funds grow tax-deferred until you withdraw them in retirement. With TFSA, you contribute after-tax dollars, the money grows tax-free, and you pay no tax on withdrawals. To find out more, call us today.