Category Archive for: ‘Retirement Planning’

Five truths about RRSPs

RRSPs aren't for everyone

This post is a condensed version of the article published in the February/March 2013 issue of MoneySense ( Fewer  Canadians expect to retire with employer pensions, making RRSPs a popular solution for retirement planning. But just because they’re popular for tax-sheltering strategies, it doesn’t mean that they’re right for everyone. What about the people who operate in a low tax …

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Guaranteed Retirement Income For Life

Man On Bench1

For many Canadians, relying on a defined benefit pension plan for guaranteed income is a thing of the past. Certainly, the concept of guaranteed retirement income for life is the kind of thing that dreams are made of. As we look to retirement, we need to build up personal savings while preparing for the potential of financial risk so we …

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Canada’s Retirement Landscape

Sunny Day1

In Canada’s retirement landscape, few Canadians have the luxury of employer pensions plans that guarantee income for life, wondering where their retirement income will come from. Converting all or a portion of your self-directed retirement plan (RRSPs, TFSAs, personal savings, etc) into a product that would guarantee income for life is one way to enjoy peace of mind during times …

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Convert Your RRSP to a RRIF


Baby Boomers, the cohort born between 1947 and 1966, are entering their retirement years.  The average retirement age in Canada is 62, so the wave is well under way.  The result of this wave is that many of Canadians will be looking to convert Registered Retirement Savings Plans (RRSPs) to Registered Retirement Income Funds (RRIFs) to help fund their retirements. …

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Back-to-Back Annuities – An Alternative Fixed Income Option, Part 2

Annuity 21

Yes – you can leave it all behind The insurance aspect of the back-to-back annuity works well for estate planning purposes since the client names a beneficiary of the insurance payout.  This means that it can be creditor protected while the client remains alive; then goes directly to the named beneficiary on death while avoiding probate fees. Back-to-backs are useful …

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Annuities – An Alternative Fixed Income Option, Part 1

Annuity 2

Set them up and leave them alone.  That’s the ‘plus’ for these low-risk and high-yield investments that provide a guaranteed payment stream.  Having the option to receive fixed income from a back-to-back (insured) annuity and a guaranteed tax-free return to a beneficiary seems like a no-brainer, right? In a world gone mad with volatility, it’s nice to be able to …

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When Should I Begin CPP Income?

My Pension Fund

One conundrum for people approaching age 60 is when they should start receiving Canada Pension Plan (CPP) payments. Like the answer to many questions, it depends! First you should have some idea of your life expectancy, and your family health history may have some relevance.  Heart attack, stroke, cancer or other diseases prior to age 65 with siblings, parents or …

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Myths around Death & Taxes

Tax Stress

Though none of us will avoid death or taxes, many of us will be living much longer than Canadians did 50 years ago, and will experience first-hand the fulfillment of various myths around death and taxes. The average male now has the potential to live to age 80 and female to 83, which means that 50% will die sooner and …

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New Retirement Risks

Breaking The Bank1

We are in a new and uncharted financial era.  More than ever we need to identify the level of retirement risk that’s acceptable, while still managing the conflicting goals of adequate pre-retirement income replacement, capital preservation and long-term growth.  To do this requires us to address these major risk factors. Longevity risk: We Canadians are now living longer and healthier …

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TFSA, RRSP, or a life insurance policy?


Should I invest in TFSAs, RRSPs, or a life insurance policy? This is a question I was recently asked by a farmer. He is divorced, has a married son, and three grandchildren who have shown no interest in taking over the farm.  His tax planning is based on having minimal taxable income, and has almost no RRSP contribution room as …

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Retirement Challenges in 2012

Ready Set Retire

Unforeseen events may present retirement challenges for baby boomers The time-honored retirement strategies planers have historically used are now being radically reshaped by high levels of debt, new investment rules, historically low interest rates, volatile markets, taxes and the growing concern of a housing market bubble.  This means for those of us nearing or now in retirement, it’s becoming exceedingly …

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Real Estate Investments

For Sale1

Looking for income? Some other options to consider With today’s stock market volatility and 10 years of no real investment growth in equities, clients are looking for alternatives.  People want returns, but fixed income isn’t delivering, and many are frightened of further investments in equities.  An alternative to consider is the benefits of real estate investments to round out your portfolio. …

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Eliminate Your Debt Before Retirement

eliminate debt

Is Debt Freedom #1 On Your Retirement Bucket List? A recent survey about debt by Manulife Bank revealed that Canadians rank good health, being debt-free, and having retirement income as the most important factors for a successful retirement.  Having debt in retirement can have a very significant impact on one’s retirement lifestyle and force you to have to continue working …

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In Search Of Tax Efficient Income For 2012 and Beyond

I’m getting a lot of calls from people asking what income options are available that offer better returns than GICs plus provide better tax efficiency.  Currently 3.25% seems to be at the top end and most chartered banks are offering slightly over 2% for five-year GICs. In other words, one million dollars invested at 3.25% would earn $32,500 gross annual …

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Where Do Seniors Find Safe Investments?

Money Growing1

With today’s low interest rates and no increase in sight until 2014 or beyond, there aren’t a lot of guaranteed income options for seniors to pick from.  $100,000 invested in a 5 year GIC at 2.70% only earns $2,700 gross a year, so someone in a 30% tax bracket would only have $1,890 net after tax.  Many people either in …

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Canadians Adverse to Risking Retirement Savings

High Speed1

Canadians are renowned for being conservative with their finances.  A recent bank survey found that over 50% were investing in low risk, guaranteed options for their RRSPs.  Ironically, this may be putting future retirement dreams at risk because the real risk in sticking with “low risk” investments is that the returns man not keep up to inflation.  Gone are the …

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This Year Consider Investing in Segregated Funds

Investment 21

With today’s volatile markets, people are looking for safety in fixed income type products such as savings accounts, GICs, money market funds and bonds.  Those of you either approaching or in retirement should consider the many benefits of segregated funds.  There are some very powerful advantages with these types of funds. Just like mutual funds, segregated funds offer a wide …

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