The Financial Group

Happy Mothers Day!

It’s Your Money! By William Burns Are You Financially Successful? Well, that all depends on what you consider as being Financially successful. Does that mean you own a Mansion, Cottage, Ferrari and a Boat? Or does that mean that you just own your own home and are up to date with your bills. It all depends on what you gauge as successful.... Do you want to be Financially Successful? Ask yourself what you desire. What are your goals? Are you willing to commit the time and effort to learn how to be successful? To achieve your goals and dreams. The average person works 40 hours per week or more. How much time do you spend per week studying and learning Financial Knowledge and Success? 1 Hour per week? Maybe? Is Financial Success important to you? Are you tired of living paycheque to paycheque? Refusing to answer the phone from Collection Companies? Are your Credit Card bills out of control? How much Interest do you get charged each month in Interest from your credit card company? How long will it take to pay off your credit card? 2 years, 10 years, 50 years! Your Credit Card statement usually tells you how long it will take you to pay it off. And at what cost? What does Financial Freedom mean to you? Paying off debts. Buying a home. Funding your child’s University Education. Having a vacation each year. Being stress free. Financial success means being able to live the lifestyle that you desire. Do you know that 50% of people over the age of 55 have zero Retirement Savings? They will have to work until 70, 75 or even 80. Is this what you want to do? You should also consider what your plan is if you get sick or injured and are unable to work and earn income. Who pays your bills? Also, if you die, is your family taken care of? How do you achieve Financial Success! Do you have to earn more income? Not always! Some people earning minimum wage are financially successful while others earning 3 and 4 times that amount are not successful. It’s not what money you make! It’s what you do with your money! Do you know that 70% of the Lottery Winners claim bankruptcy in 3 years? Basically, it is said that you will work until the day you die unless you learn how to make money while you sleep! In a nutshell, the key to Financial Success is to Save and Invest (Wisely). Learn as much as possible about Finances. Do you know what an MER is? Or a Segregated Fund? How about an Insured Retirement Program? Financial Advisors can help! You should start with a budget and keep it. You should try to save 10% of your income. As well, try to lower your taxes. Finally, have an Estate Plan to ensure your assets go to the people you love and when they get it. Keep learning and enjoy your life!

What is an Estate Plan? Why do you need an Estate Plan? How do you do an Estate Plan? Believe it or not, We all have an Estate.... Your Estate is compromised of everything you own! When you become mentally or physically disabled or die, you want to control who gets your possessions. Also to make sure the heirs get what they want and when. Or to control who takes care of your loved ones. You also want to have the least amount paid in final taxes, legal fees and Court Costs. To do that, you have to make an Estate Plan. If you don't, then the government has a plan that you probably won't like. If disabled, the court will control how your assets are used to care for you. This can be expensive, time consuming and open to the general public. If you die, your assets are distributed according to probate laws. For example, The father dies leaving the mother and 4 kids with no Estate Plan. Probate laws gives the mother and 4 kids each a share of the assets. The children cannot access the money until they turn 18. Therefore, the mother now has 1/5 of the money to live and raise the 4 kids. Even worse, if both parents die in a car accident, the court appoints a guardian (someone you may not know) to take care of and raise your children. If you have a choice, wouldn't you prefer these matters be handled by your family? Not the courts! To start an Estate Plan begins with a will. (But a will does not avoid Probate!) Probate can be expensive and could take 9 months to 2 years plus for your heirs to get the remaining money! I have a tool that can help you organize your Estate Planning. Estate Planning does not have to be expensive! The best time to start is now! For piece of mind, pm to me or email at [email protected] to get a copy of this helpful tool.

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Estates and Non-Registered Segregated Funds I want to share something that I think is very important for your estate planning. As we are aware, we have the spousal rollover rules as defined by the CRA. In essence, at the time of death, a person’s assets can rollover to their surviving spouse on a tax deferred basis. Rather a straightforward process for RRSP/RRIF, LIRA/LIF and TFSAs. ... It’s a bit more subtle for non-registered assets. Non-registered assets can rollover in-kind to a surviving spouse without triggering capital gains taxation. More specifically, capital property (property than can have either capital gains or losses) can transfer in-kind to the survivor. So, for example, a stock portfolio can move across to a surviving spouse without triggering a capital gain. But, here’s the rub, this can’t work with segregated funds where the spouse is the annuitant and there is no successor annuitant and successor owner named. Reason being, at the time of death, the contract pays out and the contract is closed. The amount paid out will be in cash. Cash is not a capital property and therefore cannot be rolled over to the spouse on a tax deferred basis. So, in the event the client has an accrued capital gain in a segregated fund at the time of death, those capital gains will have to be reported when the final tax return is prepared. If, on the other hand, the surviving spouse had been set as the successor annuitant and successor owner, the contract would become the property of the survivor and the segregated fund contract would continue with the survivor as the new owner and annuitant thus deferring any taxation on the capital gain until the death of the second spouse.

It’s Your Money! By William Burns TFSA or RRSP? Which is best for you? That depends on your individual situation.... Basically, a TFSA or Tax Free Savings Account is an account that can save and earn interest and you don’t have to pay tax on any of the money you earn. You can also withdraw any of your money at any time and you don’t have to pay any income tax. There are limits of how much you can deposit though. The deposit you can put in total right now is 69,500.00 or 6,000.00 per year. An RRSP or Registered Retirement Savings Plan is an account that you can deposit and earn interest without paying income taxes until you withdraw the money later. Any amount you deposit in that Calendar year you can then deduct off your income totals and thusly receive some of the money you paid in income tax back. For example . . . if you deposit 5000.00 in a year to your RRSP you could get back 1250.00 back on your tax return. Simply, you can defer the income tax you would pay on that and earn interest for years and not pay taxes until you withdraw. If you don’t pay income tax, then an RRSP is not for you. Except in a Spousal RRSP. If the spouse with the higher income deposits into an RRSP in the name of the lower income . . . then the higher income gets more on their tax return for that year and when the lower income withdraws the money their tax rate is lower, so they pay less tax. This Spousal RRSP can be advantageous for the couple. You can also borrow to buy an RRSP. If you are in a Marginal Tax Rate of 30% and borrow 10,000.00 to buy a 10,000.00 RRSP you could receive 3,000.00 on your tax return. Therefore you have an asset of 10,000.00 (RRSP) and an expense of 10,000.00 (Loan) meaning your net worth is 0. But, the 3,000.00 you earn on your tax return results in you now having a 3,000.00 Net Worth! The cost of the loan interest is usually offset by the interest earned on your RRSP. As I mentioned earlier, a TFSA or an RRSP depends on the individual needs and circumstances. Everyone is different. Don’t forget that you are only allowed to invest in an RRSP as indicated on your previous year Notice of Assessment. Your allowable RRSP Limit is 18% of your annual gross income. See more

Switch your Mutual Funds to Segregated Funds! The Financial Group 705-627-6109

Earn 3% Interest on your TFSA!!!

If you have mortgage Insurance with your bank or lender . . . You should look at Life Insurance instead! There are many advantages! Ask me how! [email protected]

If John, Mike and Bill get Disability Insurance at age 20 the monthly premium is only 34.00 mth!