Michael Horne: Freedom 55 Financial
14 Meadowlark Way L9Y0K1 Collingwood, ON, Canada

$27,830 That is the RRSP contribution limit for the 2020 taxation year or 18% of your income. Just want you all to know.

Current Thoughts on the Market This market is doing what it does best, convincing the masses to get positioned on the same side, only to reverse and catch every...one on the wrong side shortly after. Citigroup custom gauge shows we are in a euphoric stage my analysis, cycles, and indicators also confirm it. We are in a bubble fueled by the FED and millions of new traders/investors buying up stocks like its 2000 all over again. A bubble can last a long time, so picking a top is not easy but it will pop, and there will be money to be made on the way down. FOMO (Fear Of Missing Out) is wildly high, and everyone who does not follow the markets is now talking about them and investing more money. Near-zero rates have and are helping the stock market and real estate, but as with all things that happen long enough, the wave of money will eventually be exhausted and it will become the norm. That is when the bubble and trends will reverse, When? Could be any day, or many months out, no one knows, we just need to be ready to adjust positions when the time comes. My analysis shows a 20-35% drop in the SP500 from this current level when it does happen.

For all those applying for CERB, make sure you are utilizing this benefit wisely and setting aside a portion indefinitely as you will have to pay come tax time.... Here is an example of how you should be allocating this money! I hope that this is helpful If you have any questions pertaining to your personal finances and how to properly plan through this time, PM me! *This is an EXAMPLE. If you are not sure about how much of your benefit you should put away please make sure that you find out for yourself! Everybody’s situation is different!*

Happy Easter everyone. Stay safe.

Defer 3 months of mortgage payments to the end of your mortgage at roughly $1500/mo, the bank will earn roughly $12,000 of your hard earned dollars at 4.5% inte...rest over 20 years. You tell me who's winning at Covid19? Pay if you can. It sucks. You might starve in the meantime or lose your phone and only source of human contact but damn if the banks don't get their money and capitalize on us all during a world crisis. See more

I am "essential" so still out here working (almost exclusively from home) Let's talk Tfsa today. First off, I love them. Second, they are versatile, tax effic...ient and liquid. Another misunderstanding I often encounter is the investments that can be held within TFSA itself. It can really be almost anything. GIC, equity funds, physical gold and silver or direct stock ownership. The moral of the story, or the point I am trying to make is, you do not have to settle for the .025% interest rate your bank is currently offering you existing TFSA account with them. You can do so much more with it and I can help with that. See more

Corona virus and the stock markets. A lot of people have been reaching out to me out of fear. I am in daily contact with many colleagues (finance professional...s) and the consensus is; do not panic we have seen this before with other similiar health events dating back many decades. However, we do expect some pretty crazy volatility for the next several weeks and perhaps months. Moral of the story invest according to your risk tolerance. See more

Life insurance can be a core strategy for retirement savings TIM CESTNICK SPECIAL TO THE GLOBE AND MAIL... JANUARY 30, 2020 In 2001, Carey McWilliams obtained a permit in North Dakota to carry a concealed weapon. The thing that makes his story so unusual is that he’s legally blind. Mr. McWilliams had satisfied the state’s shooting test by hitting a human-sized target 10 times out of 10 from a distance of 21 feet, or 6.4 metres. Today, he has permits in five states. Even though Mr. McWilliams is blind, he hits the target every time once someone points him in the right direction. Retirement planning can be like this. Many people can’t see how much income or savings they’ll need to make ends meet in retirement, but if someone can point them in the right direction, they might just hit the target. I’ve been trying to help with this. In my article earlier this month, I mentioned eight core strategies to paying for life in retirement, and talked about life insurance as one of those core strategies. Today, I want to share how this can work. THE STORY Seven years ago, a close friend of mine, Scott, came to me concerned about how he was going to generate income in retirement. He was 46 at the time, and was behind in saving for retirement. He’s a business owner and had been plowing virtually all of his savings into his business to expand it (a common scenario). We talked about insurance as one vehicle to help him create the cash flow he and his wife will need in the future about $100,000 after taxes annually. They did implement an insurance strategy that is expected to provide them with about $44,000 of that cash each year. Scott has been paying insurance premiums on this policy since 2013, and in another three years the policy will be paid up," meaning he can stop paying premiums at that time. THE MECHANICS How does this actually work? Scott approached a trusted life insurance professional and had some projections done. At the age of 46, he purchased a whole life insurance policy with an initial face amount of $1,275,000. The premiums are costing Scott $50,000 annually. Yes, that’s a big number, and Scott could have opted for lower annual premiums, but he wanted the policy to be paid up after 10 years. (As an aside, it’s possible to borrow to pay your insurance premiums so the cash-flow impact today is minimal; a topic for another day.) Each dollar of premium that Scott pays is used for two things: Covering the charges for the insurance itself and making a deposit into an accumulating fund inside the policy. That accumulating fund is known as the cash value of policy. After 10 years, the cash value of Scott’s policy is expected to be $576,000 (every case is different, but it’s not unusual to have the cash value to be equal to or great than the amount you’ve paid in premiums by the 10th year). If Scott were to die on the 10th anniversary of the policy, the total death benefit that would be paid out, tax-free, would be about $1,896,000 (the initial face amount, plus the cash value, with some other adjustments that an actuary would have to explain; your insurance adviser can provide the projections). Scott can withdraw the cash value at any time if he wants, but it would be taxable as regular income, so he has a different plan. Starting at 65, Scott is going to receive $44,300 annually. How? He’s going to visit a bank and borrow $3,692 each month (about $44,300 annually) to use in retirement, using the policy as collateral (which many banks are glad to do; they’ll typically lend up to 90 per cent of the cash value). This is not taxable income. Loan proceeds are tax-free. There will be an annual interest charge on the borrowing, which Scott plans to capitalize (he won’t pay the interest annually, but the interest will be added to the loan balance over the years). If Scott passes away at the age of 95, the total insurance benefit to be paid out is projected to be $3,095,165. This money will be used to pay off the loan to the bank, which is projected to be $2,526,308 at that time. There will be about $568,857 left over in his estate for his heirs. Scott will plan to meet the balance of his cash needs in retirement using other strategies. You don’t have to structure your insurance plan exactly like Scott has. You could borrow less, or not borrow at all. You could reduce your premiums by stretching them out over a period longer than 10 years, or borrow to pay your premiums. You can choose to cover whatever portion of your cash needs in retirement that suits you. Speak to an insurance adviser about your various options. Tim Cestnick, FCPA, FCA, CPA(IL), CFP, TEP, is an author, and co-founder and CEO of Our Family Office Inc

Tax Tips Tuesday Ok, I know its not Tuesday but.... You have until Monday March 2, 2020 to make a tax deductible RRSP contributions for the 2019 year. Consider the higher income earning person contributing to their spouse's RRSP via a spousal RRSP for greater tax savings.

$40k within 2 days. No legals No appraisal Much cheaper than a private 2nd Mortgage.$40k within 2 days. No legals No appraisal Much cheaper than a private 2nd Mortgage.