tag:blogger.com,1999:blog-33830965026524032632024-03-06T00:41:51.364-08:00The financial journey from work and through the transitions in retirement. Tips traps solutionsIntended solely as a general guide that outlines some of the financial pitfalls that we may experience as we go through life and explore some of the solutions. Professional financial advice is also available for individual and group cases by contacting info@bequestinsurance.caJack Bergmanshttp://www.blogger.com/profile/08525941420822823641noreply@blogger.comBlogger21125tag:blogger.com,1999:blog-3383096502652403263.post-11713211429449141512024-01-18T12:19:00.000-08:002024-01-18T12:19:09.541-08:00The Best Features Of Segregated Funds<p><b> The Best Features Of Segregated Funds</b></p><p style="text-align: left;"><a href="https://doneslaving.files.wordpress.com/2024/01/img_20220917_100704.jpg"><img alt="" class="wp-image-362" height="240" src="https://doneslaving.files.wordpress.com/2024/01/img_20220917_100704.jpg?w=1024" width="320" /></a></p><!--wp:image {"id":362,"sizeSlug":"large","linkDestination":"media"}-->
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<p>In the ever-evolving landscape of investment options, Segregated Funds, often referred to as "Seg Funds," have emerged as an appealing choice for investors seeking to balance growth potential and capital protection. These specialized investment products combine the features of mutual funds with the benefits of insurance, offering a range of advantages that make them stand out in the market.</p>
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<li><strong>Principal Protection:</strong> One of the most attractive features of Segregated Funds is their principal protection. Unlike traditional mutual funds, which expose investors to market fluctuations, Seg Funds guarantee a return of a certain percentage of the initial investment, typically 75% to 100%, upon maturity or death. This safety net provides investors with a level of security that is especially valuable in times of market volatility.</li>
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<li><strong>Maturity and Death Benefit Guarantees:</strong> Segregated Funds often come with maturity guarantees, ensuring that investors receive a predetermined amount upon the fund's maturity, usually after a specified number of years. Additionally, in the unfortunate event of the investor's passing, the named beneficiaries are guaranteed to receive either the market value of the investment or the original capital, depending on the terms of the contract. These guarantees make Seg Funds an attractive option for risk-averse investors and those looking to provide financial security for their loved ones.</li>
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<li><strong>Potential Creditor Protection:</strong> In some jurisdictions, Segregated Funds may offer a level of protection against creditors in the case of bankruptcy. This can be particularly advantageous for business owners and professionals concerned about safeguarding their assets from potential legal claims.</li>
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<li><strong>Professional Management:</strong> Segregated Funds are managed by experienced investment professionals who make decisions based on market research and analysis. Investors benefit from the expertise of fund managers who actively monitor and adjust the portfolio to capitalize on market opportunities, aiming for optimal returns while mitigating risks.</li>
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<li><strong>Estate Planning Advantages:</strong> Segregated Funds offer efficient estate planning features. The ability to designate beneficiaries directly without going through the probate process can simplify the transfer of assets to heirs, potentially reducing administrative costs and delays. This feature is particularly valuable for those who wish to streamline the inheritance process and minimize the impact of estate taxes.</li>
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<li><strong>Privacy:</strong> Your Will is a public document. Segregated Funds bypass the Will and probate which means that your seg fund assets transfer quickly, directly and privately to your beneficiaries.</li>
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<li><strong>Diverse Investment Options:</strong> Investors can choose from a variety of Segregated Fund options, including equity funds, bond funds, and balanced funds. This diversity allows investors to tailor their portfolios to match their risk tolerance, financial goals, and investment preferences.</li>
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<p>While Segregated Funds may not be suitable for every investor or financial situation, their combination of principal protection, guarantees, and professional management makes them a compelling choice for those seeking a balanced and secure approach to investing. Seg funds add unique insurance protection to your investments, with features that can’t be found with other investments. With any investment decision, it's crucial to carefully evaluate your financial objectives and consult with a financial advisor to determine if Segregated Funds are the right fit with your overall investment strategy.</p>
<!--/wp:paragraph-->Jack Bergmanshttp://www.blogger.com/profile/08525941420822823641noreply@blogger.com0tag:blogger.com,1999:blog-3383096502652403263.post-32656972304982750712023-09-21T11:17:00.007-07:002023-09-22T07:18:54.067-07:00Should small businesses offer health and dental plans?<p><span face="Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"" style="background-color: white; color: #222222; font-size: 16px;"><b></b></span></p><div class="separator" style="clear: both; text-align: center;"><br /></div><b>Every small businesses should investigate the value of offering health and dental plans to their employees for several compelling reasons:</b><p></p><p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjRCZXHgzCPnvuVJ64qPf1arWphFAg-t7TBGm8L3a6HYnRGkpjZMfFfPZPGWJOHCx76KdNm9EVqOq6g_mVs9HRFrZQG3NyIETk619HHoDuSvEjb6_DRduj22XWloCIaILKSKF7xLjLWDAQv7LxIl6p5hT0TV8zsKh_DVzSDt6Yvst6V8XYxbL6gGPRZ39jI/s6464/IMG_20200624_201135.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="2304" data-original-width="6464" height="114" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjRCZXHgzCPnvuVJ64qPf1arWphFAg-t7TBGm8L3a6HYnRGkpjZMfFfPZPGWJOHCx76KdNm9EVqOq6g_mVs9HRFrZQG3NyIETk619HHoDuSvEjb6_DRduj22XWloCIaILKSKF7xLjLWDAQv7LxIl6p5hT0TV8zsKh_DVzSDt6Yvst6V8XYxbL6gGPRZ39jI/s320/IMG_20200624_201135.jpg" width="320" /></a></div><br /><span face="Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"" style="background-color: white; color: #222222; font-size: 16px;"><br /></span><p></p><p><span face="Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"" style="background-color: white; border: 0px solid rgb(217, 217, 227); box-sizing: border-box; color: #222222; font-size: 16px; font-weight: 600;">Competitive Advantage</span><span face="Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"" style="background-color: white; color: #222222; font-size: 16px;">: Offering health and dental benefits can give small businesses a competitive edge in attracting and retaining top talent. In a competitive job market, prospective employees often consider the availability of benefits when evaluating potential employers. By providing these benefits, you can make your business more attractive to skilled workers.</span></p><p><span face="Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"" style="background-color: white; color: #222222; font-size: 16px;"><br /></span></p><p><span face="Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"" style="background-color: white; border: 0px solid rgb(217, 217, 227); box-sizing: border-box; color: #222222; font-size: 16px; font-weight: 600;">Employee Retention</span><span face="Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"" style="background-color: white; color: #222222; font-size: 16px;">: Offering health and dental plans can help retain valuable employees. When employees have access to these benefits, they are more likely to stay with the company for the long term, reducing turnover and the associated costs of recruitment and training.</span></p><p><span face="Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"" style="background-color: white; color: #222222; font-size: 16px;"><br /></span></p><p><span face="Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"" style="background-color: white; border: 0px solid rgb(217, 217, 227); box-sizing: border-box; color: #222222; font-size: 16px; font-weight: 600;">Tax Benefits</span><span face="Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"" style="background-color: white; color: #222222; font-size: 16px;">: In Canada, employer contributions to health and dental plans are generally considered a non-taxable employment benefit. This means that both the employer and employees can benefit from tax advantages, as premiums paid by the employer are typically tax-deductible, and benefits received by employees are not considered taxable income.</span></p><p><span face="Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"" style="background-color: white; color: #222222; font-size: 16px;"><br /></span></p><p><span face="Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"" style="background-color: white; border: 0px solid rgb(217, 217, 227); box-sizing: border-box; color: #222222; font-size: 16px; font-weight: 600;">Enhanced Employee Wellness</span><span face="Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"" style="background-color: white; color: #222222; font-size: 16px;">: Health and dental coverage contribute to the overall health and well-being of employees. Regular check-ups, preventative care, and access to dental services can help employees stay healthy, reducing absenteeism due to illness and promoting productivity.</span></p><p><span face="Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"" style="background-color: white; color: #222222; font-size: 16px;"><br /></span></p><p><span face="Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"" style="background-color: white; border: 0px solid rgb(217, 217, 227); box-sizing: border-box; color: #222222; font-size: 16px; font-weight: 600;">Lower Absenteeism</span><span face="Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"" style="background-color: white; color: #222222; font-size: 16px;">: Employees with health and dental benefits are more likely to address health issues promptly, reducing the number of sick days taken. This can help maintain productivity and minimize disruptions to the business.</span></p><p><span face="Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"" style="background-color: white; color: #222222; font-size: 16px;"><br /></span></p><p><span face="Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"" style="background-color: white; border: 0px solid rgb(217, 217, 227); box-sizing: border-box; color: #222222; font-size: 16px; font-weight: 600;">Employee Satisfaction</span><span face="Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"" style="background-color: white; color: #222222; font-size: 16px;">: Providing health and dental coverage demonstrates that you value and care for your employees. This can boost morale, job satisfaction, and overall workplace happiness, leading to increased productivity and a positive work environment.</span></p><p><span face="Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"" style="background-color: white; color: #222222; font-size: 16px;"><br /></span></p><p><span face="Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"" style="background-color: white; border: 0px solid rgb(217, 217, 227); box-sizing: border-box; color: #222222; font-size: 16px; font-weight: 600;">Positive Company Image</span><span face="Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"" style="background-color: white; color: #222222; font-size: 16px;">: A small business that offers health and dental benefits is often seen as a responsible and caring employer. This positive image can enhance your brand, reputation, and relationships with customers, partners, and the local community.</span></p><p><span face="Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"" style="background-color: white; color: #222222; font-size: 16px;"><br /></span></p><p><span face="Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"" style="background-color: white; border: 0px solid rgb(217, 217, 227); box-sizing: border-box; color: #222222; font-size: 16px; font-weight: 600;">Recruitment Success</span><span face="Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"" style="background-color: white; color: #222222; font-size: 16px;">: Access to health and dental plans can help you attract candidates who might otherwise overlook small businesses for larger employers who offer benefit packages. It can also attract candidates who place a high value on their health and well-being.</span></p><p><br /></p><p><span face="Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"" style="background-color: white; border: 0px solid rgb(217, 217, 227); box-sizing: border-box; color: #222222; font-size: 16px; font-weight: 600;">Customization</span><span face="Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"" style="background-color: white; color: #222222; font-size: 16px;">: Small businesses can tailor health and dental plans to suit their specific needs and budget. This allows for flexibility in selecting coverage options that align with your employees' requirements and your financial constraints.</span></p><p><span face="Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"" style="background-color: white; color: #222222; font-size: 16px;"><br /></span></p><div class="MsoNormal" style="background: white; margin-bottom: 0cm;"><span style="mso-bidi-font-family: Garamond;">If you have any general questions or would like to learn more about health and dental plans for small business I invite you to contact me today.</span></div><div class="MsoNormal" style="background: white; margin-bottom: 0cm;"><s><span style="mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;"><br /></span></s></div><div class="MsoNormal"><span style="background-color: white;">Please note: As an insurance broker, at Bequest Insurance we also offer a variety of small business health and dental plans.</span></div><div class="MsoNormal"><br /></div><p><br /><span id="yui_3_16_0_1_1440509754576_62155" style="font-family: "times new roman" , "new york" , "times" , serif;"><span id="yui_3_16_0_1_1440509754576_62154"><b id="yui_3_16_0_1_1440509754576_62153">Jack Bergmans CFP</b></span></span><br /></p><div id="yui_3_16_0_1_1440509754576_62011"><span id="yui_3_16_0_1_1440509754576_62151" style="font-family: "times new roman" , "new york" , "times" , serif;"><span id="yui_3_16_0_1_1440509754576_62150" style="font-size: x-small;">Certified Financial Planner/ Founding Partner </span></span><br /><div id="yui_3_16_0_1_1440509754576_62010"><div id="yui_3_16_0_1_1440509754576_62148"><span id="yui_3_16_0_1_1440509754576_62147" style="font-family: "times new roman" , "new york" , "times" , serif;"><span id="yui_3_16_0_1_1440509754576_62146" style="font-size: x-small;">Life Insurance & Estate Consultant</span></span></div><div id="yui_3_16_0_1_1440509754576_62012"><span id="yui_3_16_0_1_1440509754576_62144" style="font-family: "times new roman" , "new york" , "times" , serif;"><span id="yui_3_16_0_1_1440509754576_62143" style="font-size: 13px;"><a href="http://www.bequestinsurance.ca/" id="yui_3_16_0_1_1440509754576_62142" rel="nofollow" target="_blank"><span class="yiv723444988Apple-style-span" id="yui_3_16_0_1_1440509754576_62141"><b id="yui_3_16_0_1_1440509754576_62140">Bequest Insurance</b></span></a></span></span></div><div id="yui_3_16_0_1_1440509754576_62012"><span id="yui_3_16_0_1_1440509754576_62144" style="font-family: "times new roman" , "new york" , "times" , serif;"><span id="yui_3_16_0_1_1440509754576_62143"><span class="yiv723444988Apple-style-span" id="yui_3_16_0_1_1440509754576_62141"><b id="yui_3_16_0_1_1440509754576_62140">jack@bequestinsurance.ca</b></span></span></span></div><div id="yui_3_16_0_1_1440509754576_62139"><span id="yui_3_16_0_1_1440509754576_62138" style="font-family: "times new roman" , "new york" , "times" , serif;"><span id="yui_3_16_0_1_1440509754576_62137" style="font-size: x-small;">Phone: (416) 356-4511 </span></span></div></div></div><p><span class="yiv723444988Apple-style-span" id="yui_3_16_0_1_1440509754576_62132" style="font-family: "times new roman";"><span class="yiv723444988Apple-style-span" id="yui_3_16_0_1_1440509754576_62131" style="color: #1f497d;"><span id="yui_3_16_0_1_1440509754576_62130" style="color: blue; text-decoration-line: underline;"><span id="yui_3_16_0_1_1440509754576_62129" style="font-family: "times new roman" , "new york" , "times" , serif;"><span id="yui_3_16_0_1_1440509754576_62158"><a href="http://www.linkedin.com/in/jackbergmanscfp" id="yui_3_16_0_1_1440509754576_62157" rel="nofollow" target="_blank">Linked In</a></span></span></span></span></span></p><p><span face="Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"" style="background-color: white; color: #222222; font-size: 16px;"><br /></span></p><p><span face="Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"" style="background-color: white; color: #222222; font-size: 16px;"><br /></span></p>Jack Bergmanshttp://www.blogger.com/profile/08525941420822823641noreply@blogger.com0tag:blogger.com,1999:blog-3383096502652403263.post-72020163383014905162023-02-16T09:48:00.003-08:002023-02-16T10:52:35.691-08:00Quick estate planning tips that can help with a smooth transition <p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhuKPcfSfkAspMZDUGFK2ZHPsHN8d9JfHhAjJs26u2gVs4gePy_JFqg1clz2B4XqqFhz9ahsL3fppKyniRygSnCgDqwWjvanzyZ3HjjEtkYKoNnyiJjQayHd8E9QKceo6YKpsh253r26vceHsAWyEkazTed-pQQ8yWs58Yc3PmMxOZslun6bJM0At5kpw/s3648/IMG_20220911_193730.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="2736" data-original-width="3648" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhuKPcfSfkAspMZDUGFK2ZHPsHN8d9JfHhAjJs26u2gVs4gePy_JFqg1clz2B4XqqFhz9ahsL3fppKyniRygSnCgDqwWjvanzyZ3HjjEtkYKoNnyiJjQayHd8E9QKceo6YKpsh253r26vceHsAWyEkazTed-pQQ8yWs58Yc3PmMxOZslun6bJM0At5kpw/s320/IMG_20220911_193730.jpg" width="320" /></a></div><div class="separator" style="clear: both; text-align: center;"><br /></div><div class="separator" style="clear: both; text-align: center;"><br /></div><!-- wp:paragraph -->
<p>Planning for your estate is a practical gift that you can leave for your family, heirs and charities.</p>
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<p>Here is a short list of some common estate snags that you can avoid with just a little bit of planning.</p>
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<p>1. Get a Will. </p>
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<p>i)In general, in most jurisdictions dying without a Will means that your estate will be distributed by the courts in a rigidly prescribed manner which neither you nor your survivors have any control over. </p><p>Having a Will avoids having your estate being distributed to people you didn't intend to give money to.</p><p>ii) Powers of attorney for your financial affairs and health care are very important additional items that you walk out of your lawyers office with when you make out your Will. These may seem like throwaway items at the time but can become extremely important documents that can have a dramatic influence for many years of your life, long before you pass away. </p><!-- wp:paragraph -->
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<p>Though not technically an estate snag, having powers of attorney in place avoids giving up control over these important life matters and can often help to avoid potential abuse of your assets while you are alive. </p>
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<p>2. Review and update your Will.</p>
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<p>Over time things in life change. Births, deaths, preferences, divorce, remarriage and the charities you support are just a few things that should be considered. A rule of thumb is to review your Will <em>at least once</em> every 5 years. Be sure to share any changes with your financial advisor who should be able to help you protect your assets and get the most out of your estate for your heirs. </p>
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<p>Like getting a Will in the first place, updating your Will avoids your estate being distributed to people you didn't intend to give your money to.</p>
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<p>3. Probate. </p>
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<p>Thankfully there are exceptions however in general, when you die most of your assets instantly belong to a new legal entity that's referred to as your estate, known as 'the estate of ... '. In most jurisdictions 'the estate of ...' must go through the probate process before it can be distributed. Probate is time consuming and expensive, reducing the value of your estate while your executor has little if any control over it. In general, your estate can't be accessed by your heirs until it clears probate which includes paying probate taxes and legal fees etc. </p>
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<p>If your estate is simple, probate can often take six to nine months or more; in more complicated cases it can literally take years. In particular, if you expect that your heirs will quickly need access to your estate assets to pay the bills etc. ask your financial advisor about setting aside money that sidesteps being included in your estate and avoids the probate process entirely. </p>
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<p>Avoiding probate where ever practical avoids putting a lot of unnecessary stresses on your survivors and allows 'the estate of....' to flow quickly and smoothly to your intended heirs.</p>
<!-- /wp:paragraph -->Jack Bergmanshttp://www.blogger.com/profile/08525941420822823641noreply@blogger.com0tag:blogger.com,1999:blog-3383096502652403263.post-51261113099709335572020-07-17T11:06:00.003-07:002020-07-17T12:35:50.834-07:00Mortgage insurance from the bank vs. Better Mortgage Insurance<div style="-webkit-print-color-adjust: economy; background-color: white; box-sizing: inherit; break-inside: avoid; color: #525146; font-size: 18px; margin-bottom: 1.6rem; max-width: 728px;"><span style="box-sizing: border-box; font-family: georgia, palatino;"><br /></span></div><div style="-webkit-print-color-adjust: economy; background-color: white; box-sizing: inherit; break-inside: avoid; color: #525146; font-size: 18px; margin-bottom: 1.6rem; max-width: 728px;"><span style="box-sizing: border-box; font-family: georgia, palatino;"><img border="0" data-original-height="1536" data-original-width="2048" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiMO6nApecF3zh8bqNjhmcopxLAJjzdOHwYrsOXjfsjEarJDaCgt-_Cswe1KnwL6RruQ7y368YDiKs-nozpCUy6HltasOWC0tn51qgvgRC3SQ6jJHeCSEk8O3W0N12LFzxz9kC3slV5xR7v/s320/IMG_20200123_072802.jpg" style="background-color: transparent;" width="320" /></span></div><div style="-webkit-print-color-adjust: economy; background-color: white; box-sizing: inherit; break-inside: avoid; color: #525146; font-size: 18px; margin-bottom: 1.6rem; max-width: 728px;">
<span style="box-sizing: border-box; font-family: georgia, palatino;">Mortgage Insurance is a group insurance that's typically marketed towards homeowners who may be concerned that an unexpected death or illness could leave their loved ones in a difficult position of financial hardship. </span></div>
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<div style="-webkit-print-color-adjust: economy; background-color: white; box-sizing: inherit; break-inside: avoid; color: #525146; font-size: 18px; margin-bottom: 1.6rem; max-width: 728px;"><span style="box-sizing: border-box; font-family: georgia, palatino;">Better Mortgage Life Insurance is individual insurance that can perform a similar function for you, but isn’t tied directly to only covering your mortgage debt. It’s simply designed to provide your beneficiaries with money in the event of your death. Its flexibility allows your beneficiaries to use the money for whatever purpose they wish. </span></div>
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<span style="box-sizing: border-box; font-size: medium;">Why <a href="https://bettermortgageinsurance.ca/BISolutions" style="background: transparent; box-sizing: border-box; text-decoration-line: none;"><span style="color: #3d85c6;">Better Mortgage Life Insurance</span></a> vs Mortgage insurance from a bank?</span></div>
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<span style="box-sizing: border-box; font-size: medium;">1. It costs you less!</span></div>
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<span style="box-sizing: border-box; font-size: medium;">2. It's a fast, easy and safe way to <a href="https://bettermortgageinsurance.ca/BISolutions" style="background: transparent; box-sizing: border-box; text-decoration-line: none;"><span style="color: #3d85c6;">purchase mortgage insurance directly on-line here</span></a>. </span></div>
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<span style="box-sizing: border-box; font-size: medium;">3. You own the policy. It stays with you and you get to choose the beneficiary.</span></div>
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<span style="box-sizing: border-box; font-size: medium;">4. Your payments stay the same for the term. </span></div>
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<span style="box-sizing: border-box; font-size: medium;">5. The benefit doesn't decrease as you pay down your mortgage - unlike a the bank!</span></div>
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<span style="box-sizing: border-box; font-size: medium;">6. With Better Mortgage Insurance there is no need to requalify for insurance when you change your bank or mortgage provider.</span></div>
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<span style="box-sizing: border-box; font-size: medium;">7. <a href="https://www.investopedia.com/terms/r/renewableterm.asp#:~:text=A%20renewable%20term%20is%20a,being%20paid%20by%20the%20beneficiary." style="background: transparent; box-sizing: border-box; text-decoration-line: none;"><span style="color: #3d85c6;">Renewable</span></a> without the need to requalify for insurance. </span></div>
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<span style="box-sizing: border-box; font-size: medium;">8. <a href="https://www.investopedia.com/ask/answers/09/convertible-insurance-policy.asp#:~:text=A%20convertible%20insurance%20policy%20is%20a%20term%20usually%20related%20to%20life%20insurance.&text=This%20type%20of%20policy%20provides,needs%20and%20financial%20resources%20change." style="background: transparent; box-sizing: border-box; text-decoration-line: none;"><span style="color: #3d85c6;">Convertible</span></a> to permanent insurance without needing to requalify.</span></div>
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<span style="box-sizing: border-box; font-size: medium;">9. Questions? Professional life <a href="http://bequestinsurance.ca/Contact_Us.php" style="background: transparent; box-sizing: border-box; text-decoration-line: none;"><span style="color: #3d85c6;">insurance-licensed advice</span></a> is always available .</span></div>
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<span style="box-sizing: border-box; font-size: medium;">Note: <a href="https://bettermortgageinsurance.ca/BISolutions" style="background: transparent; box-sizing: border-box; text-decoration-line: none;"><span style="color: #3d85c6;">Better Mortgage Insurance</span></a> is underwritten by <span style="background: transparent; box-sizing: border-box; color: #3d85c6; text-decoration-line: none;"><a href="https://www.assumption.ca/en/Home" style="background: transparent; box-sizing: border-box; text-decoration-line: none;">Assumption Life</a>.</span></span></div>
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Jack Bergmanshttp://www.blogger.com/profile/08525941420822823641noreply@blogger.com0tag:blogger.com,1999:blog-3383096502652403263.post-52568014347979015192020-02-27T12:22:00.005-08:002022-01-12T07:27:39.064-08:00Should you have a savings plan that's similar to having your own Defined Benefit Pension Plan?As the Canadian postal workers union <a href="http://www.cupw.ca/" target="_blank"><span style="color: blue;">(CUPE)</span></a> continues to negotiate with Canada Post over their contract and in particular <span style="color: blue;">t<a href="http://www.cbc.ca/news/business/canada-post-pension-fight-explainer-1.3666723" target="_blank"><span style="color: blue;">he issue of phasing out of Defined Benefit (DB) plans in favour of Defined Contribution (DC) plans as was recently discussed on the CBC</span>,</a> </span>I've been wondering why we're not hearing any discussions about guaranteed retirement income solutions that are already a huge market for many Canadians without DB pensions and have been available through a variety of Canadian insurance providers right across the country for many years.<div><br /></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEiU38Nvy7UOUnwq-UzTqP7D9nBnxl1FP2C6kp--s_Y_0hdO5NE8yFuiGXNxQ9OPfZF3rxI-uUzWMEZVsb5Ljzoac_b7hUEm1AG5P2jjYq5cR0mzVmrf9vT3SUxrIR5B6AWxrtmJXHMcADXJ8lj74ls3lvX8riUb3dGjc_I4UfpsKPQ4bq_pPzJVDln8Ag=s4608" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="3456" data-original-width="4608" height="240" src="https://blogger.googleusercontent.com/img/a/AVvXsEiU38Nvy7UOUnwq-UzTqP7D9nBnxl1FP2C6kp--s_Y_0hdO5NE8yFuiGXNxQ9OPfZF3rxI-uUzWMEZVsb5Ljzoac_b7hUEm1AG5P2jjYq5cR0mzVmrf9vT3SUxrIR5B6AWxrtmJXHMcADXJ8lj74ls3lvX8riUb3dGjc_I4UfpsKPQ4bq_pPzJVDln8Ag=s320" width="320" /></a></div><br /><div><br />
<br /><br />In our practice we speak with many Canadians who have saved and/or are saving for retirement and find that most people have the common desire to have at minimum, a rock solid core retirement income that's guaranteed to keep them in the lifestyle they prefer. I would suspect that the postal workers union and their members probably have the same goals in mind.<br />
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From the outside looking in, the main problem in this dispute appears to be that even though DB plans are often the best guaranteed retirement income solutions available for employees the <a href="http://business.financialpost.com/executive/risk-management/analysis-determining-the-fate-of-canadas-defined-benefit-pensions" target="_blank"><span style="color: blue;">financial risks of DB plans</span></a> are considered too high for most of today's corporate managers to take on. So the compromise of a simple DC plan offers similar ongoing financial support for workers but eliminates the corporate capital requirements required by pension regulation and future retirement income risks of employees away from the corporation.<br />
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A few of the key differences between DB plans and some of the available guaranteed income plans such as with <a href="http://www.empire.ca/consumer/investments/our-products/class-plus-2-1/en/" target="_blank"><span style="color: blue;">variable annuity plans</span></a> also known as <a href="http://www.getsmarteraboutmoney.ca/en/managing-your-money/investing/complex-investments/Pages/Guaranteed-minimum-withdrawal-benefit-products.aspx#.V5J_VzkrLCM" target="_blank"><span style="color: blue;">GMWB</span></a>'s are:<br />
a) savers maintain access to their savings in the event they need the money.<br />
b) plans can be portable when people change jobs.<br />
c) some plans offer lifetime income that is based on deposits plus 4-5% during your savings years (or market value which ever is higher).<br />
d) lifetime retirement income might not be indexed to inflation.<br />
e) savers can choose from a wide variety of investments.<br />
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Guaranteed income for life solutions that combine some of the <a href="https://www.sunlife.ca/Canada/ataglance/Archives/Investments+-+Investing+Information/Defined+Benefit+vs+Defined+Contribution?vgnLocale=en_CA" target="_blank"><span style="color: blue;">DC plan attributes </span></a>with some of the <a href="https://www.sunlife.ca/Canada/ataglance/Archives/Investments+-+Investing+Information/Defined+Benefit+vs+Defined+Contribution?vgnLocale=en_CA" target="_blank"><span style="color: blue;">DB plan attributes</span></a> such as these are often a good compromise that suits a majority of retirement income needs.<br />
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That's because in our experience we find that clients who integrate guaranteed income solutions into their financial plans tend to do so for a variety of common reasons. These often include such things as:<br />
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a) peace of mind comes from having a core part of retirement income that's provided for life that's above and beyond meagre <span style="color: blue;"><a href="http://www.servicecanada.gc.ca/eng/video/cpp-rpc.shtml" target="_blank"><span style="color: blue;">CPP</span></a> </span>and <a href="http://www.esdc.gc.ca/en/cpp/oas/benefit_amount.page" target="_blank"><span style="color: blue;">Old Age Security (OAS)</span></a> payments.<br />
b) as a passive supplemental guaranteed income above small or insufficient existing DB plans in order to guarantee anticipated lifetime income needs.<br />
c) create as close to a DB plan equivalent with <a href="http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/rrsps-eng.html" target="_blank"><span style="color: blue;">RRSP</span></a>'s, <span style="color: blue;"><a href="http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrif-ferr/menu-eng.html" target="_blank"><span style="color: blue;">RRIF</span></a>'</span>s and DC plans as possible so the requirement for taking on additional investment risks are reduced or eliminated in savings years and most importantly, during <span style="color: blue;"><a href="http://www.manulife.ca/wps/portal/manulifeca/Manulife.caHome/Manulife.ca/Manulifefinancial/investments/manulife%20gif%20select/inv_about_riskzonevideo/!ut/p/b1/hZPZjqM6FEW_pT4ghcExkEczhCFAAhgSeEEMSYohQIAQ4Os7VeqWbvdVV_vNOmvLOmvLVEidqLCOx_waD3lTx9XnPWQjUxcEuEVroBAoAY0o0DM4wmCBfQHBCwB_ORj8nucRYoBmIMnWIUcDhfmZVzTgy8TX-TVgtkBDLliznAEVG37l_zZmEXWkTiQAk9SYTxm7kV1aLRPGuqkcz9hm2BpHuaBvnMtWKjeeUrq7zueaGZwHLPX3aaYhPcijyExaaZu7s_cgyaWTxEU2H5EXjtp-8vWJRqtG7wpf8GNx7wGnKyqShifD3MBwaItmNx_A5N_EiuSLcpEUlYzd4czwaD9315N_VRjPmjKb1XbVUB9spgzqiPtYYSGbbNS8_XTwjaR_OPje4Qv4R4dHKvz2ic8WvoBvarbU5namghfG_XcT8LkJdHcv9xDsIUWoE1hHbjG32lIuTrE4-x5MpiWlDO0B4EoqschWJ1ZoEcnf08SD5qtfazFfM-3pWsYh8x1PwJJnPFc9pVNhntzen-ntHbxz6w0PmA3PblgAN-yG8ouA56Rex5LsjmUfVIzkZQc7C1h92WruOBC6HMUkre0gP2Ct3tX3sxNeA4urR3_Esqj02cRl9-eQl5ikqopbV82wzfadfu6vUrjdHvP1Q2WI1ig7Vexh7ecPkvuPp9XIKS0dPBobLVvFeoFqUxjuw51v4qypxum-hR_zyT_IOQR0SPNG1GUflZGUpyZEjsxKfbsZk4RZbna6F-xVOPgrxIgeUBG0L_ubjOq0vmzQ0EE_DA747U_5f_TsgP_Lt5nBwM_BcDSweMAqI8_ySmBZCm1KgkXLgCHF1rSSFJDChpal_pKvzRJa_y6f5XiORhxgeYaBNAM_5a-__qUkH8dnu5t0dQ-5AuAwrkxT9O_r0tW1xK0TIPpzL9msP66WTUyKZLaWvdxXW4zQpgXdkJzFxFu74NbIKhh9zJsRbprqkMiuuCSJ_xFYpYYa8xZjcvTcVda2WdyPo3iWzc4utCpj4uziEWh64hHc1bLgBgnl58hp95dE5tmbM0dRysOgJUJuGIbgPMMkfdx7YMv5QyQJluazhGG1TtHWuqYPBapN8Lh0yDandDXMVHvzvHFnsA5vXSzUoSt-e_sBCqQz_Q!!/dl4/d5/L2dBISEvZ0FBIS9nQSEh/"><span style="color: blue;">retirement risk zone years</span></a>.</span><br />
d) smooth out or eliminate the negative effects on incomes that are often caused by volatile markets or savings that would otherwise be exhausted when needed during retirement years.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhiMYWB3MAbDVZHFAaHsZUa9tdjk-JFO2yx2_gFVvEuNyetpKSN4xRKn4XmBetLGaNcCxwDoeX_p755Ib7fVVzSiuSJ2m8YZO3Q62eGhruRAYU4vXbIQM5Cb8Ta4rEp8753WkqMQMGgzjfL/s1600/DSCN3929_2.JPG" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhiMYWB3MAbDVZHFAaHsZUa9tdjk-JFO2yx2_gFVvEuNyetpKSN4xRKn4XmBetLGaNcCxwDoeX_p755Ib7fVVzSiuSJ2m8YZO3Q62eGhruRAYU4vXbIQM5Cb8Ta4rEp8753WkqMQMGgzjfL/s320/DSCN3929_2.JPG" width="320" /></a><br />
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It's also important to note that the various guaranteed for life income solutions currently available are implemented to suit the specific needs of groups, couples and individuals on a case by case basis.</div>Jack Bergmanshttp://www.blogger.com/profile/08525941420822823641noreply@blogger.com0tag:blogger.com,1999:blog-3383096502652403263.post-50654705672829452152018-02-08T10:46:00.000-08:002020-02-28T07:33:53.504-08:00Volatile Markets, Retirement Income and the Risk of Time<br />
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<b style="mso-bidi-font-weight: normal;">Is a retirement income that’s
guaranteed for the rest of your life important for you?</b></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgPefLRPvPzcIjW7y9J42XM0LyDyd9Bed6qPC1eT7pYu0kOF_43eU35WGqBXZVvpaQsAYlV_z0R4OdWPnA1dMWBNDkqN_tN0pSmX-HDorRapqm88QEnuMjL6LDfSKaH8S0j3AsfX742hDqv/s1600/DSCN5335.JPG" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgPefLRPvPzcIjW7y9J42XM0LyDyd9Bed6qPC1eT7pYu0kOF_43eU35WGqBXZVvpaQsAYlV_z0R4OdWPnA1dMWBNDkqN_tN0pSmX-HDorRapqm88QEnuMjL6LDfSKaH8S0j3AsfX742hDqv/s320/DSCN5335.JPG" width="240" /></a></div>
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Studies show that over 60% of pre-retirees are most comfortable if their RRSPs and other savings would be 100% guaranteed to provide an income for
life, regardless of market conditions.<span style="mso-spacerun: yes;"> </span></div>
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For safety and short term needs many people leave money in
bank accounts, GICs and term-deposits. Savings of this kind are generally safe, but are growing at a rate that is barely keeping up with
inflation. In many cases these savings may not be growing fast enough to meet longer term financial goals. </div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhSYhi97Rz0tffmpQ_Gv4UPuX6yiZmbMosk4HhOG3VBo2r4vJWhmy0ZgwF_XtecazUnae96s9vF6UrP40VWm21xP2frVMgCGKe3Xvk3NPhNI2jseRJbxDQmDCcArwWp6ufMIvjT8u9fsCRf/s1600/DSCN5708.JPG" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhSYhi97Rz0tffmpQ_Gv4UPuX6yiZmbMosk4HhOG3VBo2r4vJWhmy0ZgwF_XtecazUnae96s9vF6UrP40VWm21xP2frVMgCGKe3Xvk3NPhNI2jseRJbxDQmDCcArwWp6ufMIvjT8u9fsCRf/s320/DSCN5708.JPG" width="320" /></a><br />
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It’s not that market risk or volatile markets are
necessarily bad. In fact, higher risk tends to bring higher rewards with some
investments. It is also technically correct that <i>over time</i>, securities markets
outperform many other investment savings choices. But market rewards are gained at random times that don't match income requirements.<br />
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For those who will be taking income from savings - an erratic or poor sequence of returns 5+ years before and or during early retirement years in particular can be financially devastating.<br />
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Longevity risk is another factor. People are living longer which means savings need to be able to last longer and longer periods of time.</div>
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So <i style="mso-bidi-font-style: normal;">time</i> can be a critical factor when protecting savings that are earmarked to draw down as income. </div>
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Thankfully
there are a variety of<span style="mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;"> guaranteed
investments that take <i style="mso-bidi-font-style: normal;">the risk of time</i> out of your future
financial plans. </span></div>
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<span style="mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;">To discover whether these guaranteed investment
options meet your unique circumstances, some common questions to discuss might include:</span></div>
<ul>
<li><span style="font-family: "symbol"; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol; mso-fareast-language: EN-US;"><span style="mso-list: Ignore;"><span style="font: 7.0pt "Times New Roman";"> </span></span></span><span style="mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;">Can lifetime expenses be covered by your current
pensions, savings and government retirement benefits? </span></li>
<li><span style="mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;"> If the market drops 20% (or any number you'd wish to explore) during income years how long will savings be expected to last?</span></li>
<li><span style="font-family: "symbol"; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol; mso-fareast-language: EN-US;"><span style="mso-list: Ignore;"> <span style="font-family: "times new roman"; font-size: 7pt; font-stretch: normal; line-height: normal;"> </span></span></span><span style="mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;">Will there enough money to take care of dependants?</span></li>
<li><span style="font-family: "symbol"; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol; mso-fareast-language: EN-US;"><span style="mso-list: Ignore;"><span style="font: 7.0pt "Times New Roman";"></span></span></span><span style="mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;"> How do future travel plans and other bucket list items fit in?</span></li>
<li>
<span style="font-family: "symbol"; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol; mso-fareast-language: EN-US;"><span style="mso-list: Ignore;"> <span style="font: 7.0pt "Times New Roman";">
</span></span></span><span style="mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;">If we eventually need to convert a nest egg into a guaranteed-for-life income stream, what are the best available options and do they suit our needs?</span></li>
<li>
<span style="font-family: "symbol"; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol; mso-fareast-language: EN-US;"><span style="mso-list: Ignore;"> <span style="font: 7.0pt "Times New Roman";"> </span></span></span><span style="mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;">Are long-term care costs factored into this equation? </span></li>
<li>
<span style="font-family: "symbol"; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol; mso-fareast-language: EN-US;"><span style="mso-list: Ignore;"> <span style="font: 7.0pt "Times New Roman";"> </span></span></span><span style="mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;">After we’re gone, will we have enough to cover the
needs of our survivors, bequests and the charitable legacies that we wish to
leave behind?</span></li>
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Knowing that we'll never run out of money for the rest of our lives is very helpful for most of us who like to sleep well at night. Control and access to our investment savings in case of emergencies are also important for many. </div>
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Of the contractually guaranteed for life income solutions available today, some plans may also
offer additional benefits to suit various circumstances such as:<br />
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<ul>
<li><span style="font-family: "symbol"; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol; mso-fareast-language: EN-US;"><span style="mso-list: Ignore;"><span style="font: 7.0pt "Times New Roman";"> </span></span></span><span style="mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;">Guaranteed growth of future income during savings
years. </span></li>
<li>
<span style="font-family: "symbol"; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol; mso-fareast-language: EN-US;"><span style="mso-list: Ignore;"><span style="font: 7.0pt "Times New Roman";"> </span></span></span>Plans<span style="mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;"> that allow you to participate in the upside of the
markets while also guaranteeing an income for life. </span></li>
<li>
<span style="font-family: "symbol"; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol; mso-fareast-language: EN-US;"><span style="mso-list: Ignore;"><span style="font: 7.0pt "Times New Roman";">
</span></span></span><span style="mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;">Income payments that are guaranteed for life!</span></li>
<li>
<span style="font-family: "symbol"; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol; mso-fareast-language: EN-US;"><span style="mso-list: Ignore;"><span style="font: 7.0pt "Times New Roman";">
</span></span></span><span style="mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;">Other guarantees. For RRSPs and RRIFs in particular, your initial investment is the guaranteed minimum you'll be able to withdraw over time, even if the market value drops below your initial deposits.</span></li>
<li>
<span style="font-family: "symbol"; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol; mso-fareast-language: EN-US;"><span style="mso-list: Ignore;"><span style="font: 7.0pt "Times New Roman";">
</span></span></span><span style="mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;">Control and access over
your investments anytime. Just in case. </span></li>
<li><span style="mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;"> Loss of control options that will pay a higher contractually guaranteed for life income are also available when suitable.</span></li>
<li>
<span style="font-family: "symbol"; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol; mso-fareast-language: EN-US;"><span style="mso-list: Ignore;"><span style="font: 7.0pt "Times New Roman";">
</span></span></span><span style="mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;">Joint
accounts, for the purpose of guaranteed income continuation for a surviving
spouse. </span></li>
<li>
<span style="font-family: "symbol"; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol; mso-fareast-language: EN-US;"><span style="mso-list: Ignore;"><span style="font: 7.0pt "Times New Roman";">
</span></span></span><span style="mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;">Avoid
probate. <i style="mso-bidi-font-style: normal;">Note: If your wish is for your estate to avoid probate delays, taxes and fees - in most Canadian provinces, it is unnecessary to set up joint
accounts with these types of guaranteed investments.</i></span></li>
<li>
<span style="font-family: "symbol"; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol; mso-fareast-language: EN-US;"><span style="mso-list: Ignore;"><span style="font: 7.0pt "Times New Roman";"> </span></span></span><span style="mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;">Transfer of residual proceeds to your beneficiaries
can be delivered over time and/or as lump sums, as you
see fit.</span></li>
</ul>
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<span style="mso-bidi-font-family: Garamond;">If you’d like to learn more
about taking the risk of time out of your retirement income plans, I invite you to
contact me today to help you discover if guaranteed investments are the right
fit for you.</span></div>
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<s><span style="mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;"><span style="text-decoration: none;"><br /></span></span></s></div>
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<span style="background-color: white;">Please note: As an independent Certified Financial Planner and expert on guaranteed-for-life income solutions, I have personally invested in some of these solutions since they are also a perfect fit for my circumstances.</span></div>
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<br />
<span id="yui_3_16_0_1_1440509754576_62155" style="font-family: "times new roman" , "new york" , "times" , serif;"><span id="yui_3_16_0_1_1440509754576_62154"><b id="yui_3_16_0_1_1440509754576_62153"><span class="yiv723444988Apple-style-span" id="yui_3_16_0_1_1440509754576_62152">Jack Bergmans CFP</span></b></span></span><br />
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<span id="yui_3_16_0_1_1440509754576_62138" style="font-family: "times new roman" , "new york" , "times" , serif;"><span id="yui_3_16_0_1_1440509754576_62137" style="font-size: x-small;"><span class="yiv723444988Apple-style-span" id="yui_3_16_0_1_1440509754576_62136">Phone: (416) 356-4511 </span></span></span></div>
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<span class="yiv723444988Apple-style-span" id="yui_3_16_0_1_1440509754576_62132" style="font-family: "times new roman";"><span class="yiv723444988Apple-style-span" id="yui_3_16_0_1_1440509754576_62131" style="color: #1f497d;"><span id="yui_3_16_0_1_1440509754576_62130" style="color: blue; text-decoration: underline;"><span id="yui_3_16_0_1_1440509754576_62129" style="font-family: "times new roman" , "new york" , "times" , serif;"><span id="yui_3_16_0_1_1440509754576_62158"><a href="http://www.linkedin.com/in/jackbergmanscfp" id="yui_3_16_0_1_1440509754576_62157" rel="nofollow" target="_blank">Linked In</a></span></span></span></span></span>Jack Bergmanshttp://www.blogger.com/profile/08525941420822823641noreply@blogger.com0tag:blogger.com,1999:blog-3383096502652403263.post-16533879839369760032017-07-12T08:59:00.000-07:002017-07-12T08:59:40.856-07:00Have you set aside money in your Will to go to your favourite charities?<br /><div class="MsoNormal">
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Even if you're still just thinking about it that's fantastic! But if you could guarantee that your
charities receive a much larger gift using this same money – and remove
potential headaches for your executors – would you consider doing that instead?<o:p></o:p></div>
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Giving through your Will – a public document that all can
see – can present challenges that you might not have thought of.<span style="mso-spacerun: yes;"> </span><o:p></o:p></div>
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For example, is there any chance that any of your beneficiaries
may resent your charitable gifts because they feel that they deserve a bigger
inheritance – especially if they have acted as your caregiver? It’s quite
common that scenarios like this result in beneficiaries contesting
philanthropic gifts made through a Will.<span style="mso-spacerun: yes;">
</span><o:p></o:p></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiXFSDBx8oCFKGCs6S_MIgOU6n7zqydqFFro7jlTgEFKqDQubspnWDAB3ElUdIHxKbayvpGcn7L6fX7qc6pqdk_01Ebz_tfftbIFK5FGBf4cmrFwiTdWwVuHBwBmMjE5DbdROdvmYyUVOol/s1600/DSCN5087.JPG" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1200" data-original-width="1600" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiXFSDBx8oCFKGCs6S_MIgOU6n7zqydqFFro7jlTgEFKqDQubspnWDAB3ElUdIHxKbayvpGcn7L6fX7qc6pqdk_01Ebz_tfftbIFK5FGBf4cmrFwiTdWwVuHBwBmMjE5DbdROdvmYyUVOol/s320/DSCN5087.JPG" width="320" /></a>Such challenges can result in significant delays in settling
your estate. This adds significant legal costs that reduce the size of the
estate for all of your beneficiaries, including your charities. This can decrease
the size of charitable tax receipts that you may be counting on to reduce estate
taxes in order to leave more to all your beneficiaries. <o:p></o:p></div>
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Also, the anger and disagreements that often surround
contested Wills often permanently fractures families.</div>
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<o:p></o:p><br />
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Here are three simple and cost-free ways that ensure your
charitable wishes remain intact. <o:p></o:p></div>
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1. Give to your favourite charities while you are
alive.<span style="mso-spacerun: yes;"> </span>Time-honoured estate planning
strategies often involve reducing the potential size of your estate. If you can
afford to give now, your estate will be smaller so will its taxes, fees and many
potential headaches for your executor.<o:p></o:p></div>
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2. Or if you are less than 80 years old, it’s often wise to use
money you’ve set aside for your charities to buy a life insurance policy,
naming your charities as its beneficiaries. <o:p></o:p></div>
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Life insurance allows anyone, even people of modest means,
to give more.<span style="mso-spacerun: yes;"> </span>In many cases, if you have
normal health issues such as high blood pressure or cholesterol and they are effectively
managed with medication, you are likely eligible to buy life insurance.<span style="mso-spacerun: yes;"> </span>Finding out if you are insurable is actually a
simple process.<s><o:p></o:p></s></div>
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When you choose a life insurance policy that grows in value
over time you’ll get four important benefits without spending any more money:<s>
</s><o:p></o:p></div>
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i) You can withdraw the growing
cash value inside your policy anytime, just in case you
need money sometime down the road.</div>
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ii) The size of your charitable
gifts increases over time so your charities can have a bigger impact on the
causes close to your heart.<o:p></o:p></div>
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iii) Tax receipts to your estate also
increase in value, helping to offset your potential estate income and capital
gains taxes.<o:p></o:p></div>
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iv) Growth in the value of life insurance
policies is tax-free so you’ll give more, without spending more.<o:p></o:p></div>
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Because life insurance policies are private<s>,</s> and
usually can’t be contested*, you won’t lose control over your charitable
intentions. Even better, because your death benefit will go to your charitable beneficiaries
outside of your Will, your charities will get your gifts much faster and with
very little effort on the part of your executor.<o:p></o:p></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjItXMUBtUKM5GJ5hl3FmZGxjXMJcK6t0D2HYD7uW-VCddKng267UPuxq-N691_FRlTntWt_eeYOWInRXYIDc5oJglhIHpcXRvNdPRC7qpRpEPSLQnKrW1lBARIXQ2zGH52SX2asxK_waiv/s1600/DSCN5459.JPG" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1200" data-original-width="1600" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjItXMUBtUKM5GJ5hl3FmZGxjXMJcK6t0D2HYD7uW-VCddKng267UPuxq-N691_FRlTntWt_eeYOWInRXYIDc5oJglhIHpcXRvNdPRC7qpRpEPSLQnKrW1lBARIXQ2zGH52SX2asxK_waiv/s320/DSCN5459.JPG" width="320" /></a></div>
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3. If you don’t qualify for life insurance, consider transferring
your intended gifts into investments with an insurance company. <span style="mso-spacerun: yes;"> </span>Such investments – including money market
funds, GICs, segregated funds (the mutual funds of the insurance world) and
annuities of any kind – are not considered part of your estate, which also
makes your executor’s job easier. All your charities will receive the proceeds
privately, quickly and unreduced by estate fees and probate taxes.<o:p></o:p><br />
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Now isn’t that something worth thinking about?<o:p></o:p></div>
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Note: To learn more about whether life insurance estate strategies
are the right fit for your circumstances, you must consult with a licensed insurance
professional. When using insurance strategies to multiply your generosity to
charities, it’s ideal to consult an advisor who is well versed in maximizing the
power of your charitable giving, while also reducing potential taxes and other challenges
that your estate might incur.<o:p></o:p></div>
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Jack Bergmans, CFP<o:p></o:p></div>
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Best-selling author of<br />
<a href="http://www.bequestinsurance.ca/Multiplying_generosity_with_Insurance.php"><i style="mso-bidi-font-style: normal;">Ripple Effect</i></a><i style="mso-bidi-font-style: normal;">: Growing your business through insurance and philanthropy<span style="mso-spacerun: yes;"> </span></i>&<i style="mso-bidi-font-style: normal;"><br />
</i><a href="http://www.bequestinsurance.ca/Multiplying_generosity_with_Insurance.php"><i style="mso-bidi-font-style: normal;">Multiplying Generosity</i></a><i style="mso-bidi-font-style: normal;">: Creatively using insurance to increase
legacy gifts</i> <o:p></o:p></div>
<div class="MsoNormal">
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Jack Bergmanshttp://www.blogger.com/profile/08525941420822823641noreply@blogger.com0tag:blogger.com,1999:blog-3383096502652403263.post-78612314894637966442016-12-09T09:23:00.001-08:002016-12-09T09:23:40.051-08:00Maybe your RRSP contributions should be made before the end of the year?<br />
<br />
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhis_vHcChhXHBJa5j4OIt9cfXA8d0MYDauk_JZN3kNfMjv57BgEnuhjki4d181-7vqsyeCkQvX2-4PqrDIadZa41FBQ-0du4cmaNWR1LwMwGEV_lnqm_s6z3F0Gw3FLKHXciNJPh7qJbD7/s1600/IMG_0016.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="219" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhis_vHcChhXHBJa5j4OIt9cfXA8d0MYDauk_JZN3kNfMjv57BgEnuhjki4d181-7vqsyeCkQvX2-4PqrDIadZa41FBQ-0du4cmaNWR1LwMwGEV_lnqm_s6z3F0Gw3FLKHXciNJPh7qJbD7/s320/IMG_0016.jpg" width="320" /></a>In our practice we speak with many Canadians who have saved and/or are saving for retirement who have the common desire to have a rock solid core retirement income that's guaranteed to keep them in the lifestyle they prefer for life. Defined Benefit Plans once provided that guaranteed income but not many of us have those kinds of plans anymore. <br />
<br />
<br />
Today we need solid lasting guaranteed investments that will provide for our own retirement income. Guaranteed income for life plans offered through insurance companies just might be that perfect fit!<br />
<br />
A few of the key features of personal guaranteed income plans such as <a href="http://www.empire.ca/consumer/investments/our-products/class-plus-2-1/en/" target="_blank"><span style="color: blue;">variable annuity plans</span></a> (also known as <a href="http://www.getsmarteraboutmoney.ca/en/managing-your-money/investing/complex-investments/Pages/Guaranteed-minimum-withdrawal-benefit-products.aspx#.V5J_VzkrLCM" target="_blank"><span style="color: blue;">GMWB</span></a>'s) are:<br />
a) investors always have access to their savings in case they need their money.<br />
b) plans are portable when people change jobs or can be changed to something else if better options become available sometime in the future.<br />
c) some guaranteed income plans offer an additional 5% annual income bonus during savings years. - eg. <i>RRSP contributions (and RRSP/RRIF switches) into guaranteed income plans that are made before the end of any year would receive the entire 5% annual income bonus.</i><br />
d) lifetime retirement income might not be indexed to inflation.<br />
e) investment choices fit the risk profile of many types of investors, but not everyone.<br />
<br />
Who are guaranteed income plans intended for?<br />
<br />
We find that clients who integrate guaranteed for life income solutions into their financial plans tend to do so for a few of common reasons. These often include such things as:<br />
<br />
a) peace of mind that comes from having a lifetime core of guaranteed retirement income that will enhance <span style="color: blue;"><a href="http://www.servicecanada.gc.ca/eng/video/cpp-rpc.shtml" target="_blank"><span style="color: blue;">CPP</span></a> </span>and <a href="http://www.esdc.gc.ca/en/cpp/oas/benefit_amount.page" target="_blank"><span style="color: blue;">Old Age Security (OAS)</span></a> payments.<br />
b) to enhance existing Defined Benefit plans in order to improve guaranteed anticipated lifetime income needs.<br />
c) avoid outliving investment income. Usually this is done by converting personal <a href="http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/rrsps-eng.html" target="_blank"><span style="color: blue;">RRSP</span></a>'s, <span style="color: blue;"><a href="http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrif-ferr/menu-eng.html" target="_blank"><span style="color: blue;">RRIF</span></a>'</span>s and <a href="http://www.finiki.org/wiki/Defined_contribution_pension_plan" target="_blank">Defined Contribution</a> plans to guaranteed income plans but it is also done through non registered savings.<br />
d) reducing or eliminating market risk in savings years leading up to and during retirement. These are known as the <span style="color: blue;"><span style="color: blue;"><a href="http://www.manulife.ca/wps/portal/manulifeca/Manulife.caHome/Manulife.ca/Manulifefinancial/investments/manulife%20gif%20select/inv_about_riskzonevideo/!ut/p/b1/hZPZjqM6FEW_pT4ghcExkEczhCFAAhgSeEEMSYohQIAQ4Os7VeqWbvdVV_vNOmvLOmvLVEidqLCOx_waD3lTx9XnPWQjUxcEuEVroBAoAY0o0DM4wmCBfQHBCwB_ORj8nucRYoBmIMnWIUcDhfmZVzTgy8TX-TVgtkBDLliznAEVG37l_zZmEXWkTiQAk9SYTxm7kV1aLRPGuqkcz9hm2BpHuaBvnMtWKjeeUrq7zueaGZwHLPX3aaYhPcijyExaaZu7s_cgyaWTxEU2H5EXjtp-8vWJRqtG7wpf8GNx7wGnKyqShifD3MBwaItmNx_A5N_EiuSLcpEUlYzd4czwaD9315N_VRjPmjKb1XbVUB9spgzqiPtYYSGbbNS8_XTwjaR_OPje4Qv4R4dHKvz2ic8WvoBvarbU5namghfG_XcT8LkJdHcv9xDsIUWoE1hHbjG32lIuTrE4-x5MpiWlDO0B4EoqschWJ1ZoEcnf08SD5qtfazFfM-3pWsYh8x1PwJJnPFc9pVNhntzen-ntHbxz6w0PmA3PblgAN-yG8ouA56Rex5LsjmUfVIzkZQc7C1h92WruOBC6HMUkre0gP2Ct3tX3sxNeA4urR3_Esqj02cRl9-eQl5ikqopbV82wzfadfu6vUrjdHvP1Q2WI1ig7Vexh7ecPkvuPp9XIKS0dPBobLVvFeoFqUxjuw51v4qypxum-hR_zyT_IOQR0SPNG1GUflZGUpyZEjsxKfbsZk4RZbna6F-xVOPgrxIgeUBG0L_ubjOq0vmzQ0EE_DA747U_5f_TsgP_Lt5nBwM_BcDSweMAqI8_ySmBZCm1KgkXLgCHF1rSSFJDChpal_pKvzRJa_y6f5XiORhxgeYaBNAM_5a-__qUkH8dnu5t0dQ-5AuAwrkxT9O_r0tW1xK0TIPpzL9msP66WTUyKZLaWvdxXW4zQpgXdkJzFxFu74NbIKhh9zJsRbprqkMiuuCSJ_xFYpYYa8xZjcvTcVda2WdyPo3iWzc4utCpj4uziEWh64hHc1bLgBgnl58hp95dE5tmbM0dRysOgJUJuGIbgPMMkfdx7YMv5QyQJluazhGG1TtHWuqYPBapN8Lh0yDandDXMVHvzvHFnsA5vXSzUoSt-e_sBCqQz_Q!!/dl4/d5/L2dBISEvZ0FBIS9nQSEh/">retirement risk zone years</a> </span></span>when savings that will be needed for retirement income should be fully protected.<br />
e) annual RRIF income can drop like a stone whenever there are down markets but guaranteed income plans eliminate that risk by providing a nice smooth retirement income stream.<br />
<br />
<br />
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjSUJL2BFKwY2FP6ehc1WdoRQ7XNZHVUK0F6TbjLTQW7ZA_l109vKmZ1FPB0XEn0Y7qqje3ejljZxxtEpibCYCi5syJazJr70a_mIqe8xG0GZLQzYEszFxSV2h99NoLH3uxT9oJTIPsXkHa/s1600/DSCN5029.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjSUJL2BFKwY2FP6ehc1WdoRQ7XNZHVUK0F6TbjLTQW7ZA_l109vKmZ1FPB0XEn0Y7qqje3ejljZxxtEpibCYCi5syJazJr70a_mIqe8xG0GZLQzYEszFxSV2h99NoLH3uxT9oJTIPsXkHa/s320/DSCN5029.JPG" width="320" /></a></div>
<br />
Please contact me anytime if you have any questions. Maybe your RRSP contributions should be made before the end of the year?<br />
<br />
<br />
<br />
<br />
Jack Bergmans<br />
<br />
jack@bequestinsurance.ca<br />
416.356.4511Jack Bergmanshttp://www.blogger.com/profile/08525941420822823641noreply@blogger.com0tag:blogger.com,1999:blog-3383096502652403263.post-50881725331430728402016-06-21T13:16:00.000-07:002016-08-10T07:38:04.007-07:00Should you consider getting life insurance before the rules change on Jan 1 2017?<div class="p4" style="display: inline !important;">
Life insurance is commonly thought of as a simple estate planning tool. Yet it can also make a very powerful investment tool due to its favourable tax treatment.<br />
<br />
Deposits and cash growth in life insurance policies are generally tax-free within certain limits, <a href="https://repsourcepublic.manulife.com/wps/wcm/connect/390aa680433c1c85b004f6319e0f5575/ins_tepg_perinsneeds.pdf?MOD=AJPERES&CACHEID=390aa680433c1c85b004f6319e0f5575" target="_blank">as are death benefits</a>, which makes life policies used as investments very valuable.<br />
<br />
On January 1, 2017 the part of the Canadian Income Tax Act governing <a href="https://www.sunnet.sunlife.com/files/advisor/english/PDF/2017_life_insurance_tax_changes_impact.pdf" target="_blank">life insurance policies will be amended </a>to more accurately reflect changes in mortality rates (people are now living longer). It will also place additional limits on life insurance deposit amounts considered tax exempt. <br />
<br />
If you decide to take advantage of life insurance for investment purposes and estate planning before these tax changes take place, your life policies will be grandfathered and provide you with the ability to invest more money tax-free than life policies purchased in 2017 and beyond. </div>
There are many situations whereby you should consider investing in life policies before December 31, 2016. A couple of key situations include:<br />
<ul>
<li> Your business is growing. Insurance taken out on the owners can create or strengthen succession plans to insure the business won't suffer when key people are unable to continue working for any reason.</li>
<li><span class="s4"> </span>You own properties whose value has grown beyond the capacity of your estate to cover estate tax obligations. <a href="https://www.linkedin.com/pulse/family-cottage-tax-time-bomb-peter-wouters" target="_blank">It's possible that capital gains taxes will not allow you to have your estate assets distributed in the way that you’d like</a>. Life insurance can be purchased to cover big tax hits such as these, and allow you to leave more to loved ones and charities. </li>
</ul>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhrmO-_kzywyqBJdiOWBOGclIh1hPXB-b1n2CAQK4Uu7dpNBII1Id5yjm4UZUNdJsENO9pFPRH5pSoetjuW8ySMSjZGyrxT0Tf1WkqoR-RcC-vUS22HROfZl1w5RViBD2owNPIhvS96Vfs0/s1600/DSCN5301.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhrmO-_kzywyqBJdiOWBOGclIh1hPXB-b1n2CAQK4Uu7dpNBII1Id5yjm4UZUNdJsENO9pFPRH5pSoetjuW8ySMSjZGyrxT0Tf1WkqoR-RcC-vUS22HROfZl1w5RViBD2owNPIhvS96Vfs0/s320/DSCN5301.JPG" width="320" /></a></div>
<br />
If you've already set aside specific funds to go to beneficiaries such as your spouse, grandkids, kids, community causes and charities,<a href="http://www.bequestinsurance.ca/Leave_a_Legacy.php" target="_blank"> Bequest Insurance’s Generosity Multiplier™ </a>can mobilize those funds to guarantee that your beneficiaries receive even more than you hoped, at no additional cost to you. <br />
<br />
Rates of return on our Generosity Multiplier™ are based on age, and since none of us are getting any younger and tax changes are coming on January 1st, this could be the perfect time to contact Bequest Insurance to learn more about how you can reduce your taxes and leave more to meet your personal or business needs!Jack Bergmanshttp://www.blogger.com/profile/08525941420822823641noreply@blogger.com0tag:blogger.com,1999:blog-3383096502652403263.post-12281578675289854922016-03-21T08:38:00.000-07:002016-08-10T08:56:26.731-07:00Should you consider buying prescribed annuities now to avoid 2017 tax increases?<span style="background-color: white; color: #444444; line-height: 22.5px;">Living longer than people in previous generations is great but more and more people are now worried about the possibility of outliving their savings. </span><br />
<span style="background-color: white; color: #444444; line-height: 22.5px;"><br /></span>
<span style="background-color: white; color: #444444; line-height: 22.5px;">Because of this, guaranteed-for-life income solutions are becoming a vital investment component for many Canadians. </span><br />
<br />
Within the available choices of guaranteed-income solutions, prescribed annuities provide much higher annual take-home income than you'll get from other typical guaranteed savings choices due to both their structure and the overlay of significant tax benefits. For example*:<br />
<div>
<span style="color: #e69138;"><br /></span>
<span style="color: #e69138;">A 60 year old in the 40% tax bracket using $100,000 in savings to provide income for life :</span></div>
<div>
<span style="color: #e69138;"><br /></span>
<span style="color: #e69138;">Scenario 1: 2% GIC is purchased</span></div>
<div>
<span style="color: #e69138;">Gross Income: $2,000</span></div>
<div>
<i>Taxable amount</i><span style="color: #e69138;">: $2,000</span></div>
<div>
<span style="color: #e69138;">Net Annual Income: </span><u>$1,200</u></div>
<div>
</div>
<div>
<br /></div>
<div>
<span style="color: #e69138;">Scenario 2: 5% Prescribed Annuity purchased</span></div>
<div>
<br /></div>
<div>
<span style="color: #e69138;">Gross Income: $5,000</span></div>
<div>
<i>Taxable amount</i><span style="color: #e69138;">: $1,054 (if purchased in 2016)</span></div>
<div>
<span style="color: #e69138;">Net Annual Income: </span><u>$4,578 </u></div>
<div>
<br /></div>
<div>
*Please note that this example is for illustration purposes only.<br />
<br />
<div class="p1">
<br /></div>
<br />
<div class="p2">
<b>Your annual taxable amount is set for life when you purchase prescribed annuities. If this same </b><b>5% prescribed annuity is purchased in 2017 the taxable amount is expected to increase from $1,054 to $1,450. </b></div>
<div class="p2">
<br /></div>
<div class="p2">
<br /></div>
</div>
<div>
<div>
It is also important to consider how various retirement income streams might lower or even eliminate your income tested government benefits such as your <a href="http://www.servicecanada.gc.ca/eng/services/pensions/infocard/janmar16.shtml" target="_blank">Old Age Security</a> pension (OAS). For the 2016 taxation year <a href="http://www.esdc.gc.ca/en/cpp/oas/recovery_tax.page" target="_blank">OAS clawbacks</a> begin when your total annual <i>taxable amount</i> (not your total income) exceeds <span style="background-color: white; color: #444444; line-height: 22.5px;"><span style="font-family: inherit;">$72,809. OAS benefits are completely eliminated when your net income (including your OAS income benefit) is just over $118,000.</span></span></div>
<div>
<br />
Prescribed annuities provide the benefits of higher incomes and <i>low</i> <i>taxable amounts</i>. This often a win-win-win for people looking for higher incomes, lower income taxes <i>and</i> getting the most from their income tested government pension plans.<br />
<div>
<br /></div>
<span style="background-color: white; color: #444444; line-height: 22.5px;"><span style="font-family: inherit;"><br /></span></span>
<br />
<div class="p1">
You may now be asking yourself these questions:</div>
<ul class="ul1">
<li class="li2"><span class="s2">How do</span> prescribed annuities or other guaranteed-for-life income options work?</li>
<li class="li2">How <span class="s2">is prescribed annuity income</span> guaranteed and for how long?</li>
<li class="li2"><span class="s2">What is the value of my prescribed annuities to</span> <span class="s2">my</span> estate,<span class="s1"> </span>spouse and other beneficiaries <span class="s2">when I die</span>? </li>
<li class="li2"><span class="s2">Are</span> annuities suitable <span class="s2">for me? Would they be suitable for my dependants?</span></li>
<li class="li1">Are there guaranteed for life income annuities that allow me to <span class="s3">access</span><span class="s3"> </span>my<span class="s3"> capital just in case I need it? </span></li>
<li class="li2">Should <span class="s2">I</span> get prescribed annuities now to avoid tax increases coming in 2017? </li>
</ul>
<br />
<div class="p2">
As always, please feel free to <a href="http://www.bequestinsurance.ca/Contact_Us.php" target="_blank">contact us</a> anytime. We make every effort to answer <span class="s2">these and any other</span> questions<span class="s1"> you might have </span>within one business day.</div>
<span style="background-color: white; color: #444444; line-height: 22.5px;"><br /></span>
<span style="background-color: white; color: #444444; line-height: 22.5px;">Best Regards</span><br />
<span style="background-color: white; color: #444444; line-height: 22.5px;"><br /></span>
<span style="background-color: white; color: #444444; line-height: 22.5px;"><br /></span>
<span style="background-color: white; color: #444444; line-height: 22.5px;">Jack</span><br />
<span style="background-color: white; color: #444444; line-height: 22.5px;"><span style="font-family: inherit;"><br /></span></span>
</div>
</div>
<div>
<br /></div>
Jack Bergmanshttp://www.blogger.com/profile/08525941420822823641noreply@blogger.com0tag:blogger.com,1999:blog-3383096502652403263.post-44631224741667305442016-01-14T09:45:00.000-08:002016-01-14T09:45:49.012-08:00This is often a good time of year to review your financial needs.The deadline for 2015 RRSP contributions this year is Monday Feb 29 2016.<br />
<br />
RRSP contributions reduce your income tax owing at the income tax rate that you pay.<br />
What that means is that if you're in the 30% tax bracket and you contribute $100, your real cost is only $70.<br />
<br />
Money held within your RRSP's and RRIF's etc. grow tax free but are taxable at your income tax rate at the time you make withdrawals.<br />
<br />
The maximum RRSP contribution limit for 2015 is $24,930 (based on your
income in 2014), plus any unused deduction room you have left over from previous years. Your 2014 notice of assessment should have these figures for you.<br /> <br />
<br />
This is often a good time of year to review your financial needs, ask a few pointed questions about how your plans will meet your future goals and also share any changes in your circumstances with your financial advisor.<br />
<br />
We all know that hope is not a plan so if you're self funding your pension and RRSP's or wish to provide yourself with an increased retirement income, have you considered investing in worry free savings that will provide you with a guaranteed income for life, regardless of the markets and no matter how long you live?<br />
<br />
<br />
<br />
<br />Jack Bergmanshttp://www.blogger.com/profile/08525941420822823641noreply@blogger.com0tag:blogger.com,1999:blog-3383096502652403263.post-54368488299326642222015-12-01T09:14:00.000-08:002015-12-08T07:33:42.450-08:00Do you have charitable gifts in your Will?<style>
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<br />
<b>Do you have charitable gifts in your Will?</b><br />
<br />
The great things that you wish to accomplish with charitable gifts in
your Will may be affected by changes to Canadian tax rules in Bill C-43
that come into effect January 1, 2016.<br />
<br />
<br />
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjmWlhqi5-POoEvsdoHDucGCNyUJUeLVQRxz4VMveHS2NLs0Y7zYSaIJxdbb6z7iVUURWjL0UwDbOczv7R8Y04aTkr4dPe6a8swYcTAEfHtA01eTCm_ex4pF9gG7pZveNwH-Widl2EIQ1XY/s1600/Wreck+Shellcovered+rock.JPG" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjmWlhqi5-POoEvsdoHDucGCNyUJUeLVQRxz4VMveHS2NLs0Y7zYSaIJxdbb6z7iVUURWjL0UwDbOczv7R8Y04aTkr4dPe6a8swYcTAEfHtA01eTCm_ex4pF9gG7pZveNwH-Widl2EIQ1XY/s320/Wreck+Shellcovered+rock.JPG" width="320" /></a>The new rules are
generally more advantageous to gifts in Wills than the existing
framework. They allow executors to allocate charitable tax credits to
the donor’s final tax return, the previous year’s return, and/or any of
the first three years of estate returns. Also, charitable gifts will
also be valued on the day the gift is received by the charity. This is a
major change – previously, the gift was receipted based on its fair
market value on the donor’s the date of death.<br />
<br />
You should also
know that the first three years of an estate are now called a Graduated
Rate Estate, or GRE. This means that income taxes paid by an estate in
it’s first three years are based on a graduated scale. After three years
estate income is taxed at the highest marginal income tax rate.<br />
<br />
Your
estate may be impacted if your charitable gifts are distributed after
the three year GRE period. If this happens, the charitable tax receipt
can only be applied against that year’s estate tax return<i>,</i> and can’t be allocated retroactively to the tax returns of the deceased or any of the years of the GRE’s existence.<br />
<br />
If
you want to donate appreciated assets to charities, the capital gains
tax exemption for gifted property will no longer be available to the
estate after the three year GRE period. This may result in smaller
settlements to all beneficiaries due to unintended additional income
taxes owing by the estate.<br />
<br />
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgr5EyNBhBVd2q95b4HgfQpWdK-5vmtpyAAenT8eoRMdqj3Py51Kdn_ZXwb2Fx7aKqn8h6NYOxLQ1iMBtdz_c2vC3sjMDZ8vupFWBcV0zbIXLdp5HdIQMJzXMg6cvl0Njy59FAVTcqtIwNo/s1600/Wickaninnish+lunch+%2528J%2527s+view%2529.JPG" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgr5EyNBhBVd2q95b4HgfQpWdK-5vmtpyAAenT8eoRMdqj3Py51Kdn_ZXwb2Fx7aKqn8h6NYOxLQ1iMBtdz_c2vC3sjMDZ8vupFWBcV0zbIXLdp5HdIQMJzXMg6cvl0Njy59FAVTcqtIwNo/s320/Wickaninnish+lunch+%2528J%2527s+view%2529.JPG" width="320" /></a>In many circumstances, the new GRE will
be a non-issue. However, it may become expensive if your estate is
complex and takes more than three years to settle, since your estate can
lose the advantages of the GRE. For example, this may happen when
charitable gifts are delayed until your spouse dies, or where other
entities are involved such as corporations or family businesses that may
need more time to be settled or restructured. The possibility of
challenges to the Will may be another concern.<br />
<br />
In fact, anything
that may delay an estate from winding up before the 3 year GRE period
expires may become an unintended and expensive situation for an estate
that expects to use charitable donation tax credits and other
tax-friendly strategies available only to the GRE. If your valuable charitable
tax credits are forced to go unused, this will almost certainly throw a
wrench into your best-laid estate plans.<br />
<br />
If nothing else, Bill
C-43 is a compelling reason to get proper legal and financial advice on
your circumstances today to determine whether any changes should be made
to your Will and to your current investments strategies to ensure that
all of your legacy intentions will be met tomorrow.Jack Bergmanshttp://www.blogger.com/profile/08525941420822823641noreply@blogger.com0tag:blogger.com,1999:blog-3383096502652403263.post-27498759453038066582015-08-25T11:59:00.000-07:002015-08-25T11:59:00.115-07:00Recent Market Volatility And Your Investment Savings<div id="yui_3_16_0_1_1440509754576_62156">
</div>
<br />This morning my wife Marlena asked me if we should be worried about
the recent stock market activity that’s all over the news these past few
days.<br />
<br />
I reassured her that the vast majority of our retirement savings were
carefully placed in products that offer guarantees that keep them
immune to market swings.<br />
<br />
When speaking with clients for the first time to determine the most
appropriate choices for their own investment needs, my goal is also
protect your own hard-earned savings against the effects of these
negative market events.<br />
<br />
As my client, you learn that it’s important to establish a stable
savings portfolio following sound practices such as having a proper
asset mix of stocks and bonds based on your risk tolerance. Some
financial institutions call this balanced approach ‘safe investing’.
Our work goes further, offering you more advanced and sophisticated
levels of protection. <br />
<br />
For example, choosing investments that
historically have been able to recover very quickly from market
downturns can often be critically important during both your savings and
income years. Additionally, I am constantly monitoring your investments
to ensure they continue to perform as anticipated, and always looking
for new or better solutions that might fit your specific needs and
keep your savings safe so you can use them when you need them.<br />
<br />
Events such as the current market downturn can’t be predicted, but I
offer all of my clients even more ways to protect their savings. Often
that comes by choosing insured investment products that can provide a
100% guaranteed benefits on your capital, guarantees on savings growth,
and/or contractual guarantees to provide you with an income for life
that rides out these volatile markets.<br />
<br />
Marlena was comforted when I reminded her that our own savings are
100% guaranteed and our income is contractually guaranteed for life.<br />
<br />
Please feel free to contact me anytime if you have any questions or
concerns about your current investment savings. If you know of anyone
else who can benefit from this worry-free approach to their investments,
I invite you to share my contact information with them.<br />
<br />
Best Regards<br />
<br />
Jack<br />
<br />
<br />
<div class="yiv4403445712signature" id="yui_3_16_0_1_1440509754576_57956">
<div>
<b><span class="yiv4403445712Apple-style-span">Jack Bergmans </span></b></div>
<div id="yui_3_16_0_1_1440509754576_57955">
<span id="yui_3_16_0_1_1440509754576_57954"><span id="yui_3_16_0_1_1440509754576_57953"><span class="yiv4403445712Apple-style-span" id="yui_3_16_0_1_1440509754576_57952">Certified Financial Planner/ Founding Partner </span></span></span><span id="yui_3_16_0_1_1440509754576_57981"><span id="yui_3_16_0_1_1440509754576_57980"><span class="yiv4403445712Apple-style-span" id="yui_3_16_0_1_1440509754576_57979">Life Insurance & Estate Consultant</span></span></span><br />
<span id="yui_3_16_0_1_1440509754576_57977"><span id="yui_3_16_0_1_1440509754576_57976"><a href="http://www.bequestinsurance.ca/" id="yui_3_16_0_1_1440509754576_57975" rel="nofollow" target="_parent"><span class="yiv4403445712Apple-style-span" id="yui_3_16_0_1_1440509754576_57974"><b id="yui_3_16_0_1_1440509754576_57973">Bequest Insurance</b></span></a></span></span><br />
<div id="yui_3_16_0_1_1440509754576_57961">
<div id="yui_3_16_0_1_1440509754576_57960">
<span id="yui_3_16_0_1_1440509754576_57959"><span id="yui_3_16_0_1_1440509754576_57958"><span class="yiv4403445712Apple-style-span" id="yui_3_16_0_1_1440509754576_57957">Phone: (416) 356-4511 </span></span></span></div>
<div>
<span id="yui_3_16_0_1_1440509754576_57959"><span id="yui_3_16_0_1_1440509754576_57958"><span class="yiv4403445712Apple-style-span" id="yui_3_16_0_1_1440509754576_57957">Toll free: (888) 708-3134 Ext. 2</span></span></span></div>
</div>
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<div id="yui_3_16_0_1_1440509754576_57966">
<span class="yiv4403445712Apple-style-span" id="yui_3_16_0_1_1440509754576_57972" style="font-family: Times New Roman;"><span class="yiv4403445712Apple-style-span" id="yui_3_16_0_1_1440509754576_57971"><span id="yui_3_16_0_1_1440509754576_57970"><span id="yui_3_16_0_1_1440509754576_57969"><span id="yui_3_16_0_1_1440509754576_57968"><a href="http://www.linkedin.com/in/jackbergmanscfp" id="yui_3_16_0_1_1440509754576_57967" rel="nofollow" target="_parent">Linked In</a></span></span></span></span></span></div>
</div>
Jack Bergmanshttp://www.blogger.com/profile/08525941420822823641noreply@blogger.com0tag:blogger.com,1999:blog-3383096502652403263.post-23728776562984990122015-04-24T10:42:00.000-07:002015-04-24T10:42:39.095-07:00Financing Retirement - 6 - Will you need Long Term Care Insurance?
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<b style="mso-bidi-font-weight: normal;"><span style="mso-bidi-font-family: "Helvetica Neue";">Will you have enough money to
cover your health care costs when you’re older?</span></b></div>
<div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<br /></div>
<div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<span style="mso-bidi-font-family: "Helvetica Neue";">Are
you worried that you may not have family or friends who could properly take care
of you as you age? Do you wonder if your nest egg will cover the long-term care
costs? </span></div>
<div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<br /></div>
<div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<span style="mso-bidi-font-family: "Helvetica Neue";">Many
Canadians expect that the government will cover health care costs when they get
older. Yet the reality is very different.</span></div>
<div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<br /></div>
<div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<span style="mso-bidi-font-family: "Helvetica Neue";">When
it comes to government-subsidized home care or long-term care, only some basic
care is covered by a patchwork of provincial services, leaving a good portion
of long-term care costs to be paid by you. And these costs are on the
rise, as the list of approved health care expenses gets shorter every year.</span></div>
<div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<br /></div>
<div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<span style="mso-bidi-font-family: "Helvetica Neue";">You
may want to follow the lead of Mary and Sonil. This couple wants to live in their
three-story Toronto house until they can’t handle the upkeep, or a decline in
their health means they can’t deal with stairs and need help with personal
care. </span></div>
<div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<br /></div>
<div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<span style="mso-bidi-font-family: "Helvetica Neue";">They
don’t have kids to care for them in their old age, and they are concerned about
the health problems running in both of their families that may manifest
themselves later. So when they were 65 and still in decent health, Mary and
Sonil gave themselves peace of mind by buying <b style="mso-bidi-font-weight: normal;">long-term care insurance</b>. Their financial advisor explained that
it’s better to buy this insurance before it’s needed, since it can be hard to
get once health problems start occurring.</span></div>
<div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<br /></div>
<div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<span style="mso-bidi-font-family: "Helvetica Neue";">Their
insurance will start to pay benefits if they need help with any two of these
five everyday personal care activities:</span></div>
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<span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><span style="mso-bidi-font-family: "Helvetica Neue";">bathing</span></div>
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</span></span></span><span style="mso-bidi-font-family: "Helvetica Neue";">eating</span></div>
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</span></span></span><span style="mso-bidi-font-family: "Helvetica Neue";">toileting
(due to incontinence or mobility problems)</span></div>
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</span></span></span><span style="mso-bidi-font-family: "Helvetica Neue";">getting
out of bed; transferring from bed/toilet to wheelchair</span></div>
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<span style="mso-bidi-font-family: "Helvetica Neue";">When
Mary and Sonil turned 75 they both were in fairly good health, but they didn’t
have as much strength or energy as they once had. They were tired of shoveling
snow, and gardening had become a literal pain in the neck. Their 80-year-old
house needed more and more repairs, which was also cutting into their savings. </span></div>
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<span style="mso-bidi-font-family: "Helvetica Neue";">Some
of their friends had moved into an attractive local retirement home and were
loving it, so they decided to explore this option for themselves. </span></div>
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<span style="mso-bidi-font-family: "Helvetica Neue";">It would
cost them $7,000 a month ($3,500 each) for a nice room, 3 meals a day served in
a dining room, having access an on-site nurse, and a wide variety of daily activities
and day trips to keep them active and engaged. Their costs would be about $84,000
a year, not including their telephone bill, and other purchases including
clothing. </span></div>
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<span style="mso-bidi-font-family: "Helvetica Neue";">They shopped
around and discovered that some retirement homes charged as little as $1,500 per
person per month, but those had fewer activities and the food was more
institutional. And they were shocked to learn that there are homes that cost upwards
of $6,000 per person a month!</span></div>
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<span style="mso-bidi-font-family: "Helvetica Neue";">They
costed out hiring home care, and learned that charges range from $15 to $75 an
hour. They knew that if they started needing more help, that would add up fast
and negotiating the stairs would still be a problem.</span></div>
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<span style="mso-bidi-font-family: "Helvetica Neue";">They
quickly realized that their government pensions and dwindling after-tax savings
wouldn’t cover their costs. However, the sale of their home would free up about
$600,000, which would certainly help.</span></div>
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<span style="mso-bidi-font-family: "Helvetica Neue";">Their
advisor presented them with some options. If they invested all their money in
safe investments like Guaranteed Investment Certificates (GICs), they’d only
earn about 2% a year. The money from the sale of their home would run out in
about 7-1/2 years if they moved into a retirement home. This would get them
into their early eighties but then what? They may live into their nineties, or
even top 100!</span></div>
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<span style="mso-bidi-font-family: "Helvetica Neue";">Placing
savings in riskier investments such as mutual funds could bring higher rates of
return, but could also potentially lose value from year to year, leading to an
even swifter evaporation of their funds.</span></div>
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<span style="mso-bidi-font-family: "Helvetica Neue"; mso-bidi-font-style: italic;">Putting this risk into perspective, their advisor
pointed out that if their savings drop by 25% in one year, they would need to earn
33% on their money the next year to make up the difference. If their
investments dropped by 50%, they’d need to make 100% to make up the difference!
Their savings would shrink even faster, because they would have to keep drawing
up on the remaining funds to cover their expenses. Mary and Sonil agreed that
this type of investment strategy was too risky.</span><span style="mso-bidi-font-family: "Helvetica Neue";"></span></div>
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<span style="mso-bidi-font-family: "Helvetica Neue";">Instead,
they decided to purchase of a joint annuity with some of the proceeds from the
sale of their house. It started providing them with an income that was contractually
guaranteed and almost tax-free, which they would receive for the rest of their
lives, even if they outlived the funds originally invested in the annuity. This
provided them with a lot of comfort. Their second safety net was their
long-term care insurance. </span></div>
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<span style="mso-bidi-font-family: "Helvetica Neue";">Mary
and Sonil confidently moved into their first choice of retirement residence,
and surrounded by friends, good food and a wide variety of activities, they
knew that they had made a good choice, and could sleep well, knowing they could
cover their costs and live in dignity, no matter if they needed more help or how
long they lived. </span></div>
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<b style="mso-bidi-font-weight: normal;"><span style="mso-bidi-font-family: "Helvetica Neue";">Is long-term care insurance right
for you?</span></b></div>
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<span style="mso-bidi-font-family: "Helvetica Neue";">Long-term
care insurance is often for people who prefer to know that their financial
health care costs will be covered for life.<span style="mso-spacerun: yes;">
</span>It can also be for people who are passionate about leaving behind money
to support friends, family and their favourite charities after they die because
the thought of spending down their entire estate during their lifetime makes
them uncomfortable. </span></div>
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<span style="mso-bidi-font-family: "Helvetica Neue";">Because
the benefits paid from long-term care insurance can be indexed to inflation, everyone
can find comfort in this insurance product. </span></div>
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<span style="mso-bidi-font-family: "Helvetica Neue";">Knowing
that long-term health costs are taken care of also allows people to explore
advanced tax-smart and creative ways to redirect some estate assets away from
the taxman, but that’s a story for another blog, or a conversation you could
have with your financial advisor.</span></div>
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<b style="mso-bidi-font-weight: normal;"><span style="mso-bidi-font-family: "Helvetica Neue";">What does long-term care
insurance cost?</span></b></div>
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<span style="mso-bidi-font-family: "Helvetica Neue";">The
cost of long-term care insurance varies with such things as your age (the
younger you are, the lower the cost); health; what size of monthly payment you
choose; and if you choose extras like inflation protection or lifetime coverage
vs. payments over a fixed number of years.</span></div>
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<span style="mso-bidi-font-family: "Helvetica Neue";">In
addition, insurance costs can vary depending on your health; family medical history;
and your desire to leave a legacy for the people and causes you are passionate
about, or simply your desire not spend down all your assets during your life
just in case you need funds for a special reason.</span></div>
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<span style="mso-bidi-font-family: "Helvetica Neue";">To
give you an idea of cost, Mary and Sonil, a healthy 65-year-old couple, paid
this for their shared long-term care insurance plan:</span></div>
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<b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;"><span style="mso-bidi-font-family: "Helvetica Neue";">Annual
insurance premium:</span></i></b><span style="mso-bidi-font-family: "Helvetica Neue";">
<span style="mso-spacerun: yes;"> </span><b style="mso-bidi-font-weight: normal;">$<u>4,594.56</u>/year
($382.88/month)</b></span></div>
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<b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;"><span style="mso-bidi-font-family: "Helvetica Neue";">The
benefits they’ll with this plan receive will be: </span></i></b><span style="mso-bidi-font-family: "Helvetica Neue";"><span style="mso-spacerun: yes;"> </span><b style="mso-bidi-font-weight: normal;">$<u>1,500/month</u></b><span style="mso-spacerun: yes;"> </span><b style="mso-bidi-font-weight: normal;">($18,000/year)</b>
indexed to inflation.</span></div>
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<span style="mso-bidi-font-family: "Helvetica Neue";">At age
80, Sonil had a serious fall. He now needs a wheelchair to get around, and
requires much more intensive daily care. Sonil and Mary made the hard decision
to move Sonil into a long-term care home. They were no longer required to pay
premiums eligible on their long-term care policy, and started collecting
benefits, which had risen to $2,019/month ($24,228/year). </span></div>
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<span style="mso-bidi-font-family: "Helvetica Neue";">In
total, over the 15 years of contributing to their policy, they have paid $68,919.
</span></div>
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<span style="mso-bidi-font-family: "Helvetica Neue";">If they
had put this money into safe investments like GICs, the 2% a year in earnings would
have resulted in a total savings of about $86,385 by age 80. </span></div>
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<span style="mso-bidi-font-family: "Helvetica Neue";">Although
that might sound like a lot, Sonil’s payments on his private room are <span style="mso-spacerun: yes;"> </span>$2,439/month ($29,268/year). If Sonil was
using these savings alone to pay his long-term care costs, he would run out of
money in less than three years. As it is, between the money he receives from
his pensions, his long-term care insurance, and a top-up from their annuity
payments, Sonil and Mary don’t have to worry about covering Sonil’s health care
costs or other living expenses.</span></div>
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<i style="mso-bidi-font-style: normal;"><span style="mso-bidi-font-family: "Helvetica Neue";">Keep in mind that at age 80, the
probability is quite high that the average person could benefit from long-term
care insurance for five years or more. It’s clear that In the case of Mary and
Sonil, their policy would more than pay for itself. </span></i></div>
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<b style="mso-bidi-font-weight: normal;"><span style="mso-bidi-font-family: "Helvetica Neue";">Are you worried that long-term
care costs may be out of reach when you need the care?</span></b></div>
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<span style="mso-bidi-font-family: "Helvetica Neue";">Here
are a few solutions to covering long-term care costs:</span></div>
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<span style="mso-bidi-font-family: Cambria; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: Cambria; mso-fareast-theme-font: minor-latin;"><span style="mso-list: Ignore;">1.<span style="font: 7.0pt "Times New Roman";">
</span></span></span><span style="mso-bidi-font-family: "Helvetica Neue";">Buy
long-term care insurance. </span></div>
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<span style="mso-bidi-font-family: Cambria; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: Cambria; mso-fareast-theme-font: minor-latin;"><span style="mso-list: Ignore;">2.<span style="font: 7.0pt "Times New Roman";">
</span></span></span><span style="mso-bidi-font-family: "Helvetica Neue";">If
it makes sense, delay a move to a retirement home.</span></div>
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<span style="mso-bidi-font-family: Cambria; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: Cambria; mso-fareast-theme-font: minor-latin;"><span style="mso-list: Ignore;">3.<span style="font: 7.0pt "Times New Roman";">
</span></span></span><span style="mso-bidi-font-family: "Helvetica Neue";">If
you need help taking care of your home, you can hire people to clean, shovel
snow, do your gardening and cut your grass.</span></div>
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<span style="mso-bidi-font-family: Cambria; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: Cambria; mso-fareast-theme-font: minor-latin;"><span style="mso-list: Ignore;">4.<span style="font: 7.0pt "Times New Roman";">
</span></span></span><span style="mso-bidi-font-family: "Helvetica Neue";">If
you need health care support, contact your local Community Care Access Centre.
You may be eligible for a few hours of government-supported care a week.</span></div>
<div class="MsoListParagraphCxSpLast" style="margin-left: 41.5pt; mso-add-space: auto; mso-layout-grid-align: none; mso-list: l0 level1 lfo2; mso-pagination: none; text-autospace: none; text-indent: -18.0pt;">
<span style="mso-bidi-font-family: Cambria; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: Cambria; mso-fareast-theme-font: minor-latin;"><span style="mso-list: Ignore;">5.<span style="font: 7.0pt "Times New Roman";"> </span></span></span><span style="mso-bidi-font-family: "Helvetica Neue";">Because interest rates are
currently very low, it may be advantageous to put some of your savings into a
life annuity or similar guaranteed solutions for some or all of these reasons: <br />
i) Annuity income will be much higher than most other sources of guaranteed income
today. <br />
ii) Life annuities generate a guaranteed income for life, even if you outlive
your initial investment.<span style="mso-spacerun: yes;"> </span><br />
iii) Increasing your income in this way can help pay for affordable individual
or shared long-term care insurance and take away any worries you have of being
able to pay for care you may need later in life.</span></div>
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<span style="mso-bidi-font-family: "Helvetica Neue";">Everyone’s
situation is different but it’s certainly worth a look to see whether a long-term
care insurance plan makes sense for you.</span></div>
Jack Bergmanshttp://www.blogger.com/profile/08525941420822823641noreply@blogger.com0tag:blogger.com,1999:blog-3383096502652403263.post-2795979555645391222013-12-12T14:45:00.000-08:002013-12-19T09:31:43.292-08:00Will You Be Happy When You RetireThere are always some risks in life but if you have a decent defined
benefit pension plan through work, or otherwise have done the math and know that
you can guarantee that you have enough money to self-fund your own retirement
for the rest of your life, your financial pillar is probably
reasonably well taken care of and you'll be happy when you retire or at
least won't have financial worries.<br />
<br />
If you don't have a
defined benefit pension plan and you don't have the financial capacity
to self fund your retirement for your entire life you are probably going to run out of money at some random point in
retirement. <br />
<br />
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<br data-mce-bogus="1" />
Here's a basic reason
why. Let's say you have $100,000 saved for retirement. You've invested
in a basket of balanced low or medium risk mutual funds in a
contribution pension plan at work or some RRSP funds at the bank. You decide to retire at age 65. You
convert your plan to a Registered Retirement Income Fund (RRIF) and take
out 4% right away. Then the stock market
has a correction. Market corrections can't be forecast but you expect that if
you're retired for a couple of decades or more it's bound to happen
sometime, maybe even a few times.<br />
<br />
You had $96,000 left in your
savings after your first withdrawal but the correction made it worth
$80,000. So the next year, at age 66 you need to take out 4.17% of
$80,000 leaving you with $76,664. You must take out a minimum amount from
your RRIF every year and that minimum increases until
you're 94 where it max's out at 20% of it's value per year.<br />
<br />
To
keep this example going, your savings don't grow the next year because it's a flat
market. So now at age 67 you need to take out 4.35% leaving you
with $73,329. <br />
<br />
Age: Starting Balance Savings Balance<br />
<br />
65 $100,000 - 4% = $96,000<br />
$96,000 - 16.7% = $80,000 (sample market correction)<br />
66 $80,000 - 4.17% = $76,664<br />
67 $76,664 - 4.35% = $73,329<br />
<br data-mce-bogus="1" />
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgogImaIoXLGX9MhVhHs-hji3-acwznVqFNlS8mYTdThE1Tthhm4I7VQj5YyLId9NlxSlhXu33THe8j0djjzjECr8SrnzxqlzfY2SmP6W_muBmI3xuP5qAcm-TCyYCe1GAM-d_wI0FHxlsT/s1600/DSCN9254.JPG" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgogImaIoXLGX9MhVhHs-hji3-acwznVqFNlS8mYTdThE1Tthhm4I7VQj5YyLId9NlxSlhXu33THe8j0djjzjECr8SrnzxqlzfY2SmP6W_muBmI3xuP5qAcm-TCyYCe1GAM-d_wI0FHxlsT/s320/DSCN9254.JPG" width="320" /></a>This
is essentially what happened to most retirees with RRSP's and RRIF's
in 2008 and 2009. In many cases the losses were much worse. With this example you can see that in the
first three withdrawals during retirement your savings would already be
down 26.7%. Unfortunately the market has historically not been able to catch up to
losses like these so at some point in retirement you're going to either spend less than you need to
or run short on money sooner than you'd like. It's a treacherous spiral and anyone caught in this trap won't be happy when they retire.<br />
<br />
<br />
A good rule of thumb is that if the value of your assets can sustain you in the lifestyle you want to at least age 100 you're <i>probably</i> going to be ok. New mortality tables indicate that our median lifespans are increasing so the younger you are, the longer you're likely to need to plan for.<br />
<br />
If
in your case you can't self fund and sustain your lifestyle in
retirement to at least age 100 you would be very wise to move some of
your savings into pooled income solutions. Pooled income solutions will give you a guaranteed income for life so you'll never run out of money. They are only offered by
insurance companies and typically include Annuities and Variable Annuities. <br />
<br />
When you use savings for an Annuity that are
not in RRSP's or RRIF's they are extremely tax friendly so your take
home income will be need much less upfront money than if you decide to take income from a bond
or GIC (which are taxed at the very highest rate). Often an annuity is used to bump up retirement income
using only a portion of your savings because once you buy the annuity you no
longer have access to that money. You would decide what makes the most sense in your circumstances.<br />
<br />
At retirement, Annuities normally also give you a much higher income than other guaranteed
income products. If you outlive what you paid for your annuity, your income continues for the
rest of your life anyway. You'll be happy. If you don't outlive your
money your beneficiaries will get what's left over. It's a very good deal. <br />
<br />
<br data-mce-bogus="1" />
Variable
Annuities are another solution that's very popular with people who
don't have defined benefit plans. These are also described as self
directed defined benefit pension plans and can be excellent solutions
both during savings years and at retirement because you'll know up-front
the guaranteed minimum income you'll receive for life. Variable
annuities also give you the upside potential of mutual funds so over
time your guaranteed income for life can ratchet upwards and be contractually locked
in for life. Joint accounts can be set up and you always have access to your
money at any time, a great feature that's bound to make you happy.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
</div>
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhr4ow7mKgShhTcYnlbQbBgNurl2Gzr7T0K_UUS6LrUtAzkPx7AKYiM0Z4yJLPsgYsUIsyOxwAjVJZ-XOa8lUM7dpIIjvoF442LiQYRq47eQpSbtnvLHK9XDQIJIqqgfV_rAJC4vDbondDx/s1600/DSCN9266.JPG" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhr4ow7mKgShhTcYnlbQbBgNurl2Gzr7T0K_UUS6LrUtAzkPx7AKYiM0Z4yJLPsgYsUIsyOxwAjVJZ-XOa8lUM7dpIIjvoF442LiQYRq47eQpSbtnvLHK9XDQIJIqqgfV_rAJC4vDbondDx/s320/DSCN9266.JPG" width="320" /></a><br />
<br />
Almost
everyone will tell you that retirement isn't all about money. There's
family, friends, activities, travel and everything else we'd like to get
more involved with. Pooled Income Solutions give you a guaranteed financial foundation so no matter how stormy the weather gets, you know that the lights will always be on and
there's always going to be food on the table. It's sure to give you invaluable
comfort and peace of mind.<br />
<br />
<br />
<br />
<br />
<br />
In my experience, for most people, moving some of
your savings into guaranteed for life pooled income solutions is the perfect step you can
take today to be on the road to be happy when you retire.<br />
<br />
<br />Jack Bergmanshttp://www.blogger.com/profile/08525941420822823641noreply@blogger.com0tag:blogger.com,1999:blog-3383096502652403263.post-26121366618898663262013-06-19T12:46:00.000-07:002013-06-19T12:46:44.909-07:00What happens when I die?
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<div class="MsoNormal" style="margin-bottom: 14.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<b style="mso-bidi-font-weight: normal;"><span style="font-family: Georgia; mso-bidi-font-family: Georgia;">What happens when I
die?</span></b></div>
<div class="MsoNormal" style="margin-bottom: 14.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<span style="font-family: Georgia; mso-bidi-font-family: Georgia;">Often the conversation I have with my clients leads to the inevitable
question, “What happens when I die?”</span></div>
<div class="MsoNormal" style="margin-bottom: 14.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<span style="font-family: Georgia; mso-bidi-font-family: Georgia;">If you are like many of our clients, you assume that upon your death,
all of your money will automatically go to your spouse, kids, place of worship
and charities. </span></div>
<div class="MsoNormal" style="margin-bottom: 14.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<span style="font-family: Georgia; mso-bidi-font-family: Georgia;">In our experience, the wills and personal finances of most people are
not properly set up to realize these goals</span>.<span style="font-family: Georgia; mso-bidi-font-family: Georgia;"></span></div>
<div class="MsoNormal" style="margin-bottom: 14.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<span style="font-family: Georgia; mso-bidi-font-family: Georgia;">Often, I can make a few simple changes to allow your bequest wishes to
be much more valuable and effective, while making the handling of estate
matters much simpler for your executor.</span></div>
<div class="MsoNormal" style="margin-bottom: 14.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<span style="font-family: Georgia; mso-bidi-font-family: Georgia;">In this article I’ll explain a few examples of things that normally occur
when someone dies that create some common problems and impediments, and how you
can easily solve them. </span></div>
<div class="MsoNormal" style="margin-bottom: 14.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiR45JgF8wAHKFLGhrcXULRkhi3SDIaEDpKqIDmbySRy-CBO9uKFzT6qt6nl87aNdcAAl2ExHNa1GGmCVrknYFk9LgfZuv4HgNPrJanJkf2e72qlKTS2XFr1ySuXhEBgr0yGnXgeWwNbIo8/s1600/Orange+glow.JPG" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiR45JgF8wAHKFLGhrcXULRkhi3SDIaEDpKqIDmbySRy-CBO9uKFzT6qt6nl87aNdcAAl2ExHNa1GGmCVrknYFk9LgfZuv4HgNPrJanJkf2e72qlKTS2XFr1ySuXhEBgr0yGnXgeWwNbIo8/s1600/Orange+glow.JPG" height="212" width="320" /></a><b style="mso-bidi-font-weight: normal;"><span style="font-family: Georgia; mso-bidi-font-family: Georgia;">Problem 1: You don’t
have a will.</span></b></div>
<div class="MsoNormal" style="margin-bottom: 14.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<span style="font-family: Georgia; mso-bidi-font-family: Georgia;">As in most places in North America, dying in Ontario without a will
essentially means that your assets will flow in pre-set proportions to people
and creditors the government deems to be ‘next in line’. If you want your
entire estate to go to your spouse and kids, this will happen though maybe not
in the proportions you imagine and only provided your debts don’t outweigh your
assets. However, when a provincial trustee must step in to administer your
estate, they deduct very high fees and probate taxes, which reduces the value of
your estate and can also result in all kinds of other unforeseeable
problems. For example, your family home may need to be sold to pay these
taxes and fees. Also, your estate is likely to be frozen and inaccessible for
at least one year – or even many years depending on the complexity of your case.
These common outcomes cause significant financial and emotional hardships on surviving
family members who continue to rely on the proceeds of your estate.</span></div>
<div class="MsoNormal" style="margin-bottom: 14.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<span style="font-family: Georgia; mso-bidi-font-family: Georgia;">If you are living common-law and die without a will, it’s extremely
important to know that your rights as a married couple end immediately on your
death. Your partner may be put in a position where they may not be able to claim
any of your estate.</span></div>
<div class="MsoNormal" style="margin-bottom: 14.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<b style="mso-bidi-font-weight: normal;"><span style="font-family: Georgia; mso-bidi-font-family: Georgia;">Solution 1: </span></b><span style="font-family: Georgia; mso-bidi-font-family: Georgia;">In almost all cases, directing
your wishes through a will is a very inexpensive way to prevent many unwanted outcomes.
Even though I am not a lawyer, this is very nearly always the first thing I recommend
to my clients.</span></div>
<div class="MsoNormal" style="margin-bottom: 14.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<b style="mso-bidi-font-weight: normal;"><span style="font-family: Georgia; mso-bidi-font-family: Georgia;">Problem 2: Heirs and
creditors can challenge your will and reduce the size of inheritances and
charitable gifts. </span></b></div>
<div class="MsoNormal" style="margin-bottom: 14.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<span style="font-family: Georgia; mso-bidi-font-family: Georgia;">Even if you have a will, there are still many circumstances that can
reduce the value of your estate, and obstruct your bequest intentions. <span style="mso-spacerun: yes;"> </span>There are simple ways to set up your bequests
to allow you to be completely sure that your bequest wishes are followed.</span></div>
<div class="MsoNormal" style="margin-bottom: 14.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<span style="font-family: Georgia; mso-bidi-font-family: Georgia;">Let’s say you have set aside money to go specific beneficiaries
including your children, grandchildren and a few charities. You have specified
who will get what in your will. </span></div>
<div class="MsoNormal" style="margin-bottom: 14.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<span style="font-family: Georgia; mso-bidi-font-family: Georgia;">However, probate taxes and fees, legal fees, and funds going to
creditors will cut into your inheritances. Because money can do strange things
to people, your children may challenge your choice of beneficiaries and even
your charitable donations. Also, if you’ve not listed your charities by their
formal legal name, charities of a similar name may each lay claim your donation.
These common problems can tie up your estate for years.</span></div>
<div class="MsoNormal" style="margin-bottom: 14.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<span style="font-family: Georgia; mso-bidi-font-family: Georgia;">You can make many simple and free changes that will make your estate
much more valuable, and free from any contentious tug-of-wars over your money.</span></div>
<div class="MsoNormal" style="margin-bottom: 14.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<b style="mso-bidi-font-weight: normal;"><span style="font-family: Georgia; mso-bidi-font-family: Georgia;">Solution 2: </span></b><span style="font-family: Georgia; mso-bidi-font-family: Georgia;">Another way to
eliminate any challenges</span><span style="mso-fareast-font-family: "Times New Roman";">
is to g</span><span style="font-family: Georgia; mso-bidi-font-family: Georgia;">ive
your community-based legacy gifts through</span><span style="mso-fareast-font-family: "Times New Roman";"> charitable <a href="http://www.cfc-fcc.ca/about-cfs/find-a-community.cfm?id=6">Community
Foundations</a>. Many offer you the attractive o</span><span style="font-family: Georgia; mso-bidi-font-family: Georgia;">ption of making a charitable contribution
now and deciding later which causes will get your money, and how much each will
receive. You can make as many tax-deductible donations through Foundations such
as these as you like, and they will then follow your wishes and efficiently
dispense your funds upon your death.</span></div>
<div class="MsoNormal" style="margin-bottom: 14.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<b style="mso-bidi-font-weight: normal;"><span style="font-family: Georgia; mso-bidi-font-family: Georgia;">Solution 3:</span></b><span style="font-family: Georgia; mso-bidi-font-family: Georgia;"> If you are sure you
won’t need the money you’ve set aside, consider giving it to your beneficiaries
while you’re alive. This will reduce the size of your estate and therefore probate
taxes and fees. When your beneficiaries are charities, gifts made while you are
alive produce tax credits that you can use to your reduce current taxes – and
unused credits can be carried forward for as much as five years. Lower taxes now
will allow you to give more to all of your beneficiaries.</span></div>
<div class="MsoNormal" style="margin-bottom: 14.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<b style="mso-bidi-font-weight: normal;"><span style="font-family: Georgia; mso-bidi-font-family: Georgia;">Solution 4:</span></b><span style="font-family: Georgia; mso-bidi-font-family: Georgia;"> If you have income that
is more than you spend, consider making significant ongoing contributions to
your favourite charities. The charitable tax credits can significantly help to offset
your current taxes. </span></div>
<div class="MsoNormal" style="margin-bottom: 14.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<b style="mso-bidi-font-weight: normal;"><span style="font-family: Georgia; mso-bidi-font-family: Georgia;">Solution 5:</span></b><span style="font-family: Georgia; mso-bidi-font-family: Georgia;"> If there is a chance
you may need the money you’ve set aside as you grow older, or you want control
over changing your beneficiaries in the future, or you want to completely avoid
probate taxes, fees and delays, consider moving your funds from bank savings
accounts, mutual funds or money market funds into identical products offered by
insurance companies. By doing so, you can directly assign beneficiaries and
easily change them at any time, without incurring any costs as you would to
change your will. Then when you die, these funds will pass to your
beneficiaries outside of your estate. Your beneficiaries will receive the funds
within three to four weeks of the insurance company receiving your death
certificate. </span></div>
<div class="MsoNormal" style="margin-bottom: 14.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<span style="font-family: Georgia; mso-bidi-font-family: Georgia;">In addition, some insurance companies will provide a 100% guarantee on
your principal so you’ll know for sure that your investments and subsequently
your bequests won’t be negatively affected by market fluctuations. </span></div>
<div class="MsoNormal" style="margin-bottom: 14.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<span style="font-family: Georgia; mso-bidi-font-family: Georgia;">Even better, leaving your bequests in this way removes this money from
your estate (just as if you gave it away during your lifetime), which will lower
your estate’s probate taxes and fees on remaining assets in your estate. Lower
taxes means you will leave even more to your beneficiaries!</span></div>
<div class="MsoNormal" style="margin-bottom: 14.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgAld8oMn97Fgrxa_YBhnFAuDImoBo3sFLrYirXi6mFr4pufWXsuMk5lAUP0XwUpLIeUcb6kzozvwD0EehIfBMHnWNFSr8OEBGo8Z0fITcSQKCjttPBRX2B9TJTHzcnC1DnYrTU8c9ZDwGb/s1600/East+Sooke+Prov+Park+7.JPG" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgAld8oMn97Fgrxa_YBhnFAuDImoBo3sFLrYirXi6mFr4pufWXsuMk5lAUP0XwUpLIeUcb6kzozvwD0EehIfBMHnWNFSr8OEBGo8Z0fITcSQKCjttPBRX2B9TJTHzcnC1DnYrTU8c9ZDwGb/s1600/East+Sooke+Prov+Park+7.JPG" height="240" width="320" /></a><b style="mso-bidi-font-weight: normal;"><span style="font-family: Georgia; mso-bidi-font-family: Georgia;">Solution 6:</span></b><span style="font-family: Georgia; mso-bidi-font-family: Georgia;"> Purchasing a life insurance
policy with money that’s already set side for beneficiaries is a simple way to significantly
multiply what you’ll bequest to these beneficiaries. You simply use the money
that's set aside to pay your life insurance premiums. In particular, if you
want to leave money to charities, it is often to your advantage to pay your
policy off in one lump sum or over a few years. </span></div>
<div class="MsoNormal" style="margin-bottom: 14.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<span style="font-family: Georgia; mso-bidi-font-family: Georgia;">As it is with any insurance product, your bequests will go to your beneficiaries
tax free and outside of the estate. They will flow quickly and directly to your
beneficiaries, usually within three to four weeks of the insurance company
receiving your death certificate. No hold-ups, no taxes, no hassles.</span></div>
<div class="MsoNormal" style="margin-bottom: 14.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<span style="font-family: Georgia; mso-bidi-font-family: Georgia;">These are some simple options available to you that will allow you to
have complete control over what happens when you die. If you'd like to discuss how
you can easily create a more valuable estate that reflects your personal
circumstances, please feel free to contact me anytime.</span></div>
<div class="MsoNormal" style="margin-bottom: 14.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<b style="mso-bidi-font-weight: normal;"><span style="font-family: Georgia; mso-bidi-font-family: Georgia;">Next: </span></b><i style="mso-bidi-font-style: normal;"><span style="font-family: Georgia; mso-bidi-font-family: Georgia;">Including your favourite charities as your beneficiaries is not only a
good thing to do but can help significantly reduce the taxes owing on your
estate.</span></i></div>
Jack Bergmanshttp://www.blogger.com/profile/08525941420822823641noreply@blogger.com0tag:blogger.com,1999:blog-3383096502652403263.post-87013814024577586342013-05-01T14:18:00.000-07:002015-03-23T11:09:02.271-07:00Financing My Retirement - Part 5 - AnnuitiesHere's a continued look at some guaranteed retirement income strategies and ways of making the most
out of your nest egg whether you're selling your home or using other
savings for your retirement income.<br />
<br />
In part four we looked at some guaranteed solutions that allow investors to stay
in control, decrease taxes, increase income and leave more to heirs. This continues the theme:<br />
<br />
For
many people their home is the largest part of their nest egg, in fact
all through life, many people see the value of their home as the one
thing that will be able to provide enough money to support them in their
later years. If you are planning to sell your house to use your nest
egg for retirement income, and/ or are looking for guaranteed safe ways
to increase your income, annuities should be the first thing you
consider.<br />
<b><br /></b>
<b>Here are a few reasons why</b>:<br />
<br />
1. <b>Low Interest Rates</b>: Traditional expectations were that interest earned on the value of a
home and other saved assets would be enough to live on for life. The
principal would then pass on to one's beneficiaries. Unfortunately, for many
of us low interest rates don't provide enough of an income to support a
decent retirement.<br />
<br />
2. <b>Negative returns in the market can wipe out your nest egg</b>: There is a fair amount of research on the effect of negative markets on savings that require regular withdrawals. My favourite source on this topic is <a data-mce-href="http://milevsky.info.yorku.ca/" href="http://milevsky.info.yorku.ca/" target="_blank">Dr. Moshe Milevsky Ph.D</a>.
Professor of Finance at the Schulich School of Business at York
University. He and his team have a large body of excellent research that quantifies the severe and
rapid financial devastation that can result from a negative sequence of
returns in your retirement years. If you'd like to learn more about the
technical aspects of this topic I'd definitely recommend you check his
website. Also, his book <a data-mce-href="http://milevsky.info.yorku.ca/published-books/pensionize-your-nest-egg-2010/" href="http://milevsky.info.yorku.ca/published-books/pensionize-your-nest-egg-2010/" target="_blank">Pensionize Your Nest Egg </a> is an important piece that details some practical methods of ensuring lifetime income.<br />
<br />
3. <b>Psychology</b>: The reality is that the majority of <a data-mce-href="http://www.aarp.org/work/retirement-planning/info-06-2010/running_out_of_money_worse_than_death.html" href="http://www.aarp.org/work/retirement-planning/info-06-2010/running_out_of_money_worse_than_death.html" target="_blank">people are more afraid of running out of money in their lifetime than of dying</a>. Financial planners and those planning or who are already retired need to rely on
products and strategies that give lifetime income guarantees. This primary need, once fulfilled, lets everyone sleep comfortably at night.<br />
<br />
4. <b>Pensions</b>: Traditional defined
benefit pensions used to provide guaranteed income for life but fewer
and fewer people have access to pensions of this kind and many people
who have them want to enhance their guaranteed income. Most people now have defined contribution plans which are at risk in the market.<br />
<br />
So what are the
available options to replace that?<br />
1. There are variable annuities
which I talked about briefly in part 4 of this series<br />
2. There are
annuities which also guarantee income for life.<br />
<br />
An overview of annuities and their many benefits can be found <a data-mce-href="http://www.bequestinsurance.ca/Using_Annuities_to_enhance_giving.php" href="http://www.bequestinsurance.ca/Using_Annuities_to_enhance_giving.php" target="_blank">here</a>.
In general, annuities provide you with the best, tax friendly way of
generating income for life that is available today. Your annuity income
is determined by a number of factors including your age and the
prevailing interest rates. In general, the older you are, the higher the
income you can expect. Your after-tax income will generally be much
higher than what you get from other typical guaranteed fixed income products such as government bonds, term deposits or GIC's and in fact, most of the
income from an annuity is tax free so that income tested benefits such
as Old Age Security or the Guaranteed Income Supplement are less likely
to be impacted, if at all.<br />
<br />
<b>A sample annuity</b>: at March 2015, a 65 year old male could expect an income of $15,194.86* from a $250,000 annuity every year, guaranteed for life. The taxable portion of this income would be a mere $1,712.87. <br />
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* (Please note that these rates are like fresh bread, becoming stale very quickly, so
contacting a licensed insurance broker will get you up to date numbers when you need them). <br />
<br />
Our
same 65 year old may also wish that some or all of his capital be
replenished on his passing so that everything goes to his beneficiaries.
Buying a $250,000 GIC or term deposit today is an often used solution that might do the trick however, it will get him a
fully taxable income of only $6,150 per year. This low income level would be fully taxable and as such this may not be the best solution.<br />
<b><br /></b>
<b>Combining an Annuity with life insurance:</b> To replenish his capital, (also known as an
estate preservation strategy), our 65 year old would be much better off
to do the following. The first is to purchase a life insurance policy
for the amount he wishes to replenish. The benefit goes to his
beneficiaries tax free, fast and outside of the estate so there are no
probate taxes, fees or delays. He then buys an annuity to pay for the
life insurance premium payments. Interestingly, premium costs on a $250,000 of life
insurance policy would cost him $7,122.50/ year which is more than offset by the $15,194.86 income he gets from a $250,000 annuity.<br />
<br />
By combining the two ideas, the
annuity payments will give him an income which is the
difference between the cost of the premiums and the income from the
annuity. In this example he gets an income of $8,072.36 per $250,000 after paying the life insurance premiums.
This income is still higher than he would get with a GIC or government bond but more importantly because most of it is tax free he has much more money in his pocket each year. Of course, when he passes away his beneficiaries also get the
full value of his estate through the insurance policy. It's simple for the executor of the estate and, there are no probate taxes, fees or unnecessary delays for the beneficiaries. <br />
<br />
Some of the reasons I like the use of annuities for retirement income and using some simple strategies
where they are appropriate include :<br />
<br />
1. Annuity after-tax income is higher than other guaranteed alternatives<br />
2. Annuities can be set up as joint plans for couples <br />
3. Annuities are often the best guaranteed solution available for core retirement income needs<br />
4. Annuities can be used to help to ensure meaningful and lasting legacies.<br />
5. Annuity income normally won't interfere with income-tested government benefits such as Old age Security or the Guaranteed Income Supplement.<br />
<br />
<br />
Annuities can be used as an excellent guaranteed income strategy to satisfy anyone's core income needs. There are many additional alternatives for improved income that can be explored once the guaranteed income foundation that meets your needs has been put in place.<br />
<br />
And as always, if you have questions or would like to learn more, please feel free to drop me a line anytime.<br />
<br />
<br />
Jack<br />
<b><i><br /> </i></b>Jack Bergmanshttp://www.blogger.com/profile/08525941420822823641noreply@blogger.com0tag:blogger.com,1999:blog-3383096502652403263.post-1131743482322636722013-02-13T08:09:00.000-08:002013-05-02T07:33:46.825-07:00Financing retirement - Part four - strategies for enhanced financial outcomes<style>
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<b><span style="font-family: "Times New Roman"; font-size: 19.0pt;">Financing retirement - Part four</span></b></div>
<div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<span style="font-family: "Times New Roman"; font-size: 19.0pt;">Strategies for enhanced financial outcomes</span><br />
<span style="font-family: "Times New Roman"; font-size: 19.0pt;"><br /></span></div>
<div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<span style="font-family: "Times New Roman"; font-size: 19.0pt;">Solving
some typical client concerns, needs and issues with some guaranteed solutions
that allow you to stay in control, decrease taxes, increase income and leave
more to heirs.</span></div>
<div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<br /></div>
<div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<span style="font-family: "Times New Roman"; font-size: 19.0pt;">In
part three we examined some of the issues that should be considered when you are developing your retirement plan. </span></div>
<div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<br /></div>
<div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<b style="mso-bidi-font-weight: normal;"><span style="font-family: "Times New Roman"; font-size: 19.0pt;">This blog will help answer some typical financial concerns and estate planning needs, like:</span></b></div>
<div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<span style="font-family: "Times New Roman"; font-size: 19.0pt;"><span style="mso-spacerun: yes;"> </span> </span></div>
<div class="MsoListParagraphCxSpFirst" style="margin-left: 37.0pt; mso-add-space: auto; mso-layout-grid-align: none; mso-list: l1 level1 lfo1; mso-pagination: none; text-autospace: none; text-indent: -19.0pt;">
<span style="font-family: "Times New Roman"; font-size: 19.0pt; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">1.<span style="font: 7.0pt "Times New Roman";">
</span></span></span><span style="font-family: "Times New Roman"; font-size: 19.0pt;">How
do I investment my money in a risk-free way that offers me income guaranteed to
last a lifetime?</span></div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: 37.0pt; mso-add-space: auto; mso-layout-grid-align: none; mso-list: l1 level1 lfo1; mso-pagination: none; text-autospace: none; text-indent: -19.0pt;">
<span style="font-family: "Times New Roman"; font-size: 19.0pt; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">2.<span style="font: 7.0pt "Times New Roman";">
</span></span></span><span style="font-family: "Times New Roman"; font-size: 19.0pt;">I
don’t have enough savings to fund my retirement years. Is there a way to invest
what I have that will increase my income without putting my money risk?</span></div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: 37.0pt; mso-add-space: auto; mso-layout-grid-align: none; mso-list: l1 level1 lfo1; mso-pagination: none; text-autospace: none; text-indent: -19.0pt;">
<span style="font-family: "Times New Roman"; font-size: 19.0pt; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">3.<span style="font: 7.0pt "Times New Roman";">
</span></span></span><span style="font-family: "Times New Roman"; font-size: 19.0pt;">Is
there a way to both live off my existing assets <i style="mso-bidi-font-style: normal;">and</i> leave behind as much as possible for my beneficiaries and
charities?</span></div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: 37.0pt; mso-add-space: auto; mso-layout-grid-align: none; mso-list: l1 level1 lfo1; mso-pagination: none; text-autospace: none; text-indent: -19.0pt;">
<span style="font-family: "Times New Roman"; font-size: 19.0pt; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">4.<span style="font: 7.0pt "Times New Roman";">
</span></span></span><span style="font-family: "Times New Roman"; font-size: 19.0pt;">How
do I invest my money in a way that increases my net income and reduces my taxes?</span></div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: 37.0pt; mso-add-space: auto; mso-layout-grid-align: none; mso-list: l1 level1 lfo1; mso-pagination: none; text-autospace: none; text-indent: -19.0pt;">
<span style="font-family: "Times New Roman"; font-size: 19.0pt; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">5.<span style="font: 7.0pt "Times New Roman";">
</span></span></span><span style="font-family: "Times New Roman"; font-size: 19.0pt;">I
am collecting Old Age Security. How do I invest my money in a way that doesn’t
generate income that will generate a reduction of my OAS payments?</span></div>
<div class="MsoListParagraphCxSpLast" style="margin-left: 37.0pt; mso-add-space: auto; mso-layout-grid-align: none; mso-list: l1 level1 lfo1; mso-pagination: none; text-autospace: none; text-indent: -19.0pt;">
<span style="font-family: "Times New Roman"; font-size: 19.0pt; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">6.<span style="font: 7.0pt "Times New Roman";">
</span></span></span><span style="font-family: "Times New Roman"; font-size: 19.0pt;">After
I pass away, how do I make sure my assets flow directly and quickly to my
spouse/partner (including married and common-law spouses and partners in opposite
or same sex relationships)?</span></div>
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<br /></div>
<div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<span style="font-family: "Times New Roman"; font-size: 19.0pt;">Most
people looking for a safe and secure way to invest their money go to their bank
or trust company and buy GICs. However, if you worry about having enough
savings to live out your retirement years, or worry about leaving money to heirs
and charities, often GICs aren’t the best solution. Here’s why:</span></div>
<div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<br /></div>
<div class="MsoListParagraphCxSpFirst" style="margin-left: 37.0pt; mso-add-space: auto; mso-layout-grid-align: none; mso-list: l2 level1 lfo2; mso-pagination: none; text-autospace: none; text-indent: -19.0pt;">
<span style="font-family: "Times New Roman"; font-size: 19.0pt; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">1.<span style="font: 7.0pt "Times New Roman";">
</span></span></span><span style="font-family: "Times New Roman"; font-size: 19.0pt;">GIC
interest rates are very low and generate little income, even if you have a
large amount invested in them. </span></div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: 37.0pt; mso-add-space: auto; mso-layout-grid-align: none; mso-list: l2 level1 lfo2; mso-pagination: none; text-autospace: none; text-indent: -19.0pt;">
<span style="font-family: "Times New Roman"; font-size: 19.0pt; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">2.<span style="font: 7.0pt "Times New Roman";">
</span></span></span><span style="font-family: "Times New Roman"; font-size: 19.0pt;">When
you die, your GIC will be inaccessible to your beneficiaries for a long time. For
example in Ontario, a GIC like this will be subject to lawyer’s fees and
probate taxes with the process taking about a year or so before the GIC can be
released to beneficiaries in the will.</span></div>
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<span style="font-family: "Times New Roman"; font-size: 19.0pt; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">3.<span style="font: 7.0pt "Times New Roman";">
</span></span></span><span style="font-family: "Times New Roman"; font-size: 19.0pt;">If
this is a couple, a joint account may make sense otherwise on the passing of
one spouse the GIC will be frozen and inaccessible to the survivor until
letters of probate and a death certificate is brought to the bank, trust or
investment dealer. The process usually takes about a year before it's
complete in Ontario.</span></div>
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<span style="font-family: "Times New Roman"; font-size: 19.0pt;">There
are alternative solutions that are just as safe and can provide a better
income, lower taxes, less risk of tax claw-backs and more efficient
flow-through of assets to beneficiaries.</span></div>
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<span style="font-family: "Times New Roman"; font-size: 19.0pt;">Here’s
an answer that will illustrate answers to all of the concerns addressed above.</span></div>
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<span style="font-family: "Times New Roman"; font-size: 19.0pt;">A
couple Bob and Wendy who are both 65 years old have about $100,000 in savings, plus $500,000
in proceeds from recently selling their home. This is all they have to live off
for the rest of their lives. Their dreams are to live long, comfortable lives
and have a generous sum left over that can go to their two children and their
favourite charity. They explore three different ways to achieve their goals,
and end up choosing the third.</span></div>
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<b><span style="font-family: "Times New Roman"; font-size: 19.0pt;">Investment
strategy #1: <br />
Investing their money in GICs purchased from a bank, credit union or trust.</span></b><span style="font-family: "Times New Roman"; font-size: 19.0pt;"> </span></div>
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<span style="font-family: "Times New Roman"; font-size: 19.0pt;">Bob and Wendy like the idea of safely investing their savings, but in doing some number
crunching, they worry that if they live two or three decades more (as some
relatives have), and if their healthcare costs escalate in later years, that
income from low-interest GICs may not be enough. </span></div>
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<span style="font-family: "Times New Roman"; font-size: 19.0pt;">In
addition, all the interest made by their GICs is taxable, and if interest
increases, their income may generate a claw-back of their Old Age Security. </span></div>
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<span style="font-family: "Times New Roman"; font-size: 19.0pt;">They
see that purchasing GICs jointly would be better; if their GICs were in a
single name, on the passing of one spouse the funds are frozen and inaccessible
to the survivor until the issuer of the GICs receive not only a death
certificate but also letters of probate, which take about one year to generate
in Ontario.</span></div>
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<span style="font-family: "Times New Roman"; font-size: 19.0pt;">Bob and Wendy aren't too thrilled when they discover that the outcome of leaving GIC residue to their children through their will means that probate taxes and legal fees will delay the process for a year or more and also
unnecessarily erode the value of their GICs. </span></div>
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<b><span style="font-family: "Times New Roman"; font-size: 19.0pt;">Investment
strategy #2: <br />
Investing their money in GICs purchased from an insurance company.</span></b><span style="font-family: "Times New Roman"; font-size: 19.0pt;"> </span></div>
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<span style="font-family: "Times New Roman"; font-size: small; mso-bidi-font-weight: bold;">Insurance company GICs (al<span style="font-size: small;">so called Guaranteed Investment<span style="font-size: small;"> Accounts or GI<span style="font-size: small;">A's</span>) </span></span>have distinct
advantages over bank GICs: </span></div>
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<span style="font-family: "Times New Roman"; font-size: 19.0pt; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;"><span style="font-size: large;">1.</span><span style="font: 7.0pt "Times New Roman";">
</span></span></span><span style="font-family: "Times New Roman"; font-size: 19.0pt;">Interest
rates offered by insurance companies are often higher than offered by banks. Currently, even insurance
company rates are low, but an independent insurance broker shows the couple
that shopping around for the best rates will yield more income.</span><br />
</div>
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<span style="font-family: "Times New Roman"; font-size: large; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">2.<span style="-moz-font-feature-settings: normal; -moz-font-language-override: normal; font-family: "Times New Roman"; font-size-adjust: none; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;">
</span></span></span><span style="font-family: "Times New Roman"; font-size: 19.0pt;">Insurance
company GICs can be assigned a beneficiary, which will receive the full
proceeds of the GIC within about 10 days that the issuing insurance company
receives a death certificate.</span><br />
<br />
<span style="font-family: "Times New Roman"; font-size: 19.0pt;">3. This investment is not subject to probate taxes, and
no lawyer is required for the transfer to be made.</span><br />
</div>
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<span style="font-family: "Times New Roman"; font-size: large; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">4.<span style="-moz-font-feature-settings: normal; -moz-font-language-override: normal; font-family: "Times New Roman"; font-size-adjust: none; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;">
</span></span></span><span style="font-family: "Times New Roman"; font-size: 19.0pt;"><span style="font-size: large;">Bob and Wendy <span style="font-size: large;">c<span style="font-size: large;">an also lower their t<span style="font-size: large;">axes because </span></span>u</span></span></span>p
to $2,000 of income from insurance company GIC is also eligible to claim the
pension income tax credit, which is 15% in federal tax credits, plus applicable provincial
credits.</div>
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<span style="font-family: "Times New Roman"; font-size: 19.0pt;">Although
this investment solution meets most of this couple’s goals, they chose to go
with the following third option, which offers guaranteed ways to <span style="mso-bidi-font-style: italic;">increase</span> their income <span style="mso-bidi-font-style: italic;">without risk</span>, save taxes, and
possibly leave more to their children.</span></div>
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<b><span style="font-family: "Times New Roman"; font-size: 19.0pt;">Their
choice: Investment strategy #3: <br />
Investing their money in variable annuities purchased from an insurance
company.</span></b><span style="font-family: "Times New Roman"; font-size: 19.0pt;"> </span></div>
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<span style="font-family: "Times New Roman"; font-size: 19.0pt;">A
variable annuity is often used as a guaranteed savings tool because it converts
to a guaranteed income-for-life on retirement. This kind of annuity also allows the invested income to remain
accessible should there be an urgent need for immediate income. </span></div>
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<span style="font-family: "Times New Roman"; font-size: 19.0pt;">Bob and Wendy learn that their non-registered invested in variable annuities would
offer a floor rate of return that will never go down as long as they live. The
initial rate of return is based on their age, and may rise as they get older.
Typical rates of return for ages 55-80 currently range from 3-6% of deposits or market value, which ever is higher. </span></div>
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<span style="font-family: "Times New Roman"; font-size: 19.0pt;">The
couple’s registered savings (their RRSP in their case) can purchase variable
annuities, which give them income that is based on the escalating annual
minimums set by the federal government, and also offers them a guaranteed lifetime base
amount that will never go lower.</span></div>
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<span style="font-family: "Times New Roman"; font-size: 19.0pt;">What’s
even better, Bob and Wendy are delighted that any residual value from variable annuities
will flow directly to their children and their charities within weeks of the
issuing insurance company receiving a death certificate. And, the proceeds bypass
legal fees, probate taxes, and time delays associated with many other types of investment
methods.</span></div>
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<span style="font-family: "Times New Roman"; font-size: 19.0pt;">*<span style="mso-spacerun: yes;"> </span>*<span style="mso-spacerun: yes;"> </span>*</span></div>
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<span style="font-family: "Times New Roman"; font-size: 19.0pt;">Everyone's
needs and situations are different and it's important to explore the outcomes that are important to you and your family with your advisor so you can make decisions that will reflect your needs the best. </span></div>
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<span style="font-family: "Times New Roman"; font-size: 19.0pt;">As always, please feel
free to drop me a line if you have any questions or would like to learn more.</span></div>
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<b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;"><span style="font-family: "Times New Roman"; font-size: 19.0pt;">Next: More
guaranteed solutions to help you to <span style="mso-spacerun: yes;"> </span>transition from retirement to retirement home - including
annuities and combining annuities with insurance for a rock solid plan for
life!</span></i></b></div>
Jack Bergmanshttp://www.blogger.com/profile/08525941420822823641noreply@blogger.com0tag:blogger.com,1999:blog-3383096502652403263.post-91648339918419295632013-01-06T10:19:00.000-08:002013-01-06T10:19:17.142-08:00Transitioning from retirement to retirement home<b>Financing my retirement - Part three</b><br />
<b>Transitioning from retirement to retirement home</b><br />
Do you have plans to downscale and move into retirement home, and use the proceeds from the sale of your home as your nest egg?<br />
If
so, here are some ideas on how to maintain control over your funds,
make the most of them, and even set some aside to act as a meaningful
legacy.<br />
Most people often consider retirement planning in three separate stages:<br />
1) Putting aside savings during working years;<br />
2) Planning the transition from working life to retirement;<br />
3) Simplifying life by moving from a larger home to a retirement home.<br />
Saving
during working years can be tough for people who are self-employed, or
who don’t have pension plans that will result in a tidy pension. If you
use mutual funds as your saving plan, your savings are at risk due to
the unknown timing of the ups and downs of the stock market. Also low
interest rates are great for borrowers but terrible for savers, since
the low rates are not keeping up with the rising cost of living. If
you’re still working, you do have the advantage of time and may be able
to wait for markets to recover or interest rates to rise.<br />
But if
you are nearing retirement, time isn’t on your side. Fluctuating markets
become a major concern when you need to access your money to fund your
retirement and your retirement needs. And when you are selling your home
to fund your retirement, freed-up cash may look like a lot initially,
but retirement living can be expensive and it’s all too easy to burn
through funds if they’re in low-interest or risky investment vehicles.<br />
You’ve
also got to consider that you may well need funds set aside for
increasing healthcare costs. When you are emotional about changes in the
health of yourself or your spouse, this is a poor time to make
important financial decisions.<br />
Planning in advance will allow you
to maintain control over your hard-earned savings, and breathe easier
about financing your future.<br />
An understanding, impartial
retirement planning professional can help you with your plan. He or she
should engage in discussions between you and your loved ones about your
vision for your retirement, and how you want to be remembered through
legacy planning. Involving your family in your plans can alleviate
future tensions or misunderstandings.<br />
By choosing an independent
broker to help you with your plan, you will have access to a wealth of
financial planning options that aren’t offered through bank products.
You should investigate no-risk financial solutions that allow you to
stay in control of your assets while providing you with guaranteed
income to live comfortably.<br />
Here are some of the key points to discuss when creating your plan.<br />
1) <b>How much is enough to carry you through your retirement years?</b>
What are your lifestyle expectations and what will they cost? What are
your current needs and what should you be keeping aside to cover
possible future needs?<br />
2) <b>What are the best investment options to allow the proceeds of the sale of property to fund your retirement?</b>
No-risk options that will guarantee your desired lifestyle and
well-being for life should be considered first. Typically these options
will include such things as annuities and other guaranteed insurance
products; they also are attractive since they generally offer a higher
guaranteed rate of return.<br />
3) <b>Do</b> <b>you wish to set aside funds to help support your children or your favourite charitable causes? </b>By
switching some of your savings into similar products offered by
insurance companies, you will be able to assign beneficiaries to receive
any left-over funds. On your passing, the transfer to your
beneficiaries occurs outside of your estate and therefore is not subject
to probate fees and taxes, and legal expenses, ensuring your
beneficiaries receive more. The transfer will also occur in a few weeks,
compared to delays of four years or more with non-insurance and bank
products.<br />
4) <b>Do you currently have a disability? </b>Are you taking advantage of all available tax breaks to help ease the costs of retirement living?<br />
5) <b>Have you assigned someone you trust to be your power of attorney? </b>If
you become incapacitated, it can be critical to have a friend or family
member in your corner to help make critical life decisions and assist
in the management of your finances.<br />
6) <b>Do you have a valid, up-to-date will? </b>Do
you really want the government to be your primary beneficiary if you
die without a will? You can remain in control of your assets, even after
you pass away, by making decisions now that will allow you to leave
behind a memorable and meaningful legacy that will touch lives for years
to come.<br />
I am happy to answer any questions you have. Drop me a line at jack@bequestinsurance.ca.<br />
Up next: <b>How you can stay in control of your finances when going from home to retirement home </b>Jack Bergmanshttp://www.blogger.com/profile/08525941420822823641noreply@blogger.com2tag:blogger.com,1999:blog-3383096502652403263.post-2613539457673741302012-11-14T13:58:00.001-08:002012-11-14T14:01:14.907-08:00Financing my retirement living. Part one. Some risks to look out for when planning for retirement<style>
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<span style="font-family: Georgia; mso-bidi-font-family: "Times New Roman";">There are three primary considerations to take into account
when determining whether your savings last through your retirement years:
inflation; the timing of returns on your investments; and life expectancy.
</span></div>
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<b><span style="font-family: Georgia; mso-bidi-font-family: "Times New Roman";">1. Inflation</span></b><span style="font-family: Georgia; mso-bidi-font-family: "Times New Roman";"></span></div>
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<span style="font-family: Georgia; mso-bidi-font-family: "Times New Roman";">Most of us think of inflation as the ever-increasing
cost of goods and services over time. Governments encourage inflation
because it provides them with tools to help smooth out the effects of economic
cycles. Like it or not, inflation is unlikely to go away. </span><span style="font-family: Georgia; mso-bidi-font-family: Georgia;"></span></div>
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<span style="font-family: Georgia; mso-bidi-font-family: "Times New Roman";">According to Statistics Canada, Canada's inflation
rate </span><span style="font-family: Georgia; mso-bidi-font-family: Georgia;">over
the past 20 years </span><span style="font-family: Georgia; mso-bidi-font-family: "Times New Roman";">has been 1.89% per year so a basket of goods that cost you
$100 in 1992 will cost you $144.89 today. So if you want to maintain your
standard of living, ongoing inflation requires that you have an increasing
salary to during your earning years and in retirement, your pensions,
savings, and any alternate income streams also need to take inflation into
account.</span></div>
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<b><span style="font-family: Georgia; mso-bidi-font-family: "Times New Roman";">2. The timing of returns on your investments</span></b><span style="font-family: Georgia; mso-bidi-font-family: "Times New Roman";"></span></div>
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<span style="font-family: Georgia; mso-bidi-font-family: "Times New Roman";">Many people keep their savings are primarily in bank
accounts, GICs, mutual funds or the stock market. During the years you are
adding to your savings, you may not worry too much about these investments
and what return they will deliver in your retirement years.</span></div>
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<span style="font-family: Georgia; mso-bidi-font-family: "Times New Roman";">Bank accounts and GICs are often considered safe bets, but
don't earn much interest. The value of funds in mutual funds and the stock
market fluctuate daily. During savings years, financial advisors often suggest
adding to your savings when market values fall, with a general understanding
that there will be a market recovery in the future and the returns overall will
be higher than bank account interest and GICs. However, it requires a crystal
ball to know when markets will recover, which becomes a concern in later years
if you are forced to begin drawing upon your savings while their value is still
low. </span></div>
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<span style="font-family: Georgia; mso-bidi-font-family: "Times New Roman";">Over the past decade, investing in the markets has generally
provided lower rates of return, causing serious financial obstacles for savers
and retirees alike, increasing tension levels. For those who are saving, low or
no growth puts people years behind in their ability to accumulate enough
savings from which to retire on. For retirees withdrawing money from savings
that aren't growing it lead to financial disaster, as dwindling funds make it
more and more difficult to keep up with inflation and worse still, the base
capital is likely to erode faster than it can be replenished. If this happens
to you, you'll run out of money before you die. That's pretty scary.</span></div>
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<b><span style="font-family: Georgia; mso-bidi-font-family: "Times New Roman";">3. Life expectancy</span></b><span style="font-family: Georgia; mso-bidi-font-family: "Times New Roman";"></span></div>
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<span style="font-family: Georgia; mso-bidi-font-family: "Times New Roman";">Better health care is allowing Canadians to live longer, and
although this can be a reason to celebrate, it is also leading to more worrying
about how to finance our retirement years. According to Stats Canada, the life
expectancy for Canadian males now aged 65 is 83.5 (an additional 18.5 years);
life expectancy for females now aged 65 is 85.2 (another 20.2
years). </span></div>
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<span style="font-family: Georgia; mso-bidi-font-family: "Times New Roman";">The term 'life expectancy' is often misunderstood. It
expresses an average age, meaning half of all people will die on or before
their life expectancy age and half will live past that age. <i>Your</i>
lifespan most likely won't be the exact average but can supply general
guidelines when working with your independent financial advisor for financing
your retirement.</span></div>
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<span style="font-family: Georgia; mso-bidi-font-family: "Times New Roman";">As a financial planner, I'm always asked, "How far
ahead should we plan for our nest egg to last?" Many planners will advise
you to use the age 95 as a baseline when planning to self fund your retirement.
If you do live longer, that means there is some risk, but 95 is a good place to
start, to help you sleep at night.</span></div>
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<span style="font-family: Georgia; mso-bidi-font-family: "Times New Roman";">I recommend that your plans take you well into the future
because your financial capacity may change unexpectedly. You have to keep in
mind your personal lifestyle needs and wants, and also anticipate changing
health care needs which can dramatically increase your cost of living. </span></div>
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<span style="font-family: Georgia; mso-bidi-font-family: "Times New Roman";">When you are in your saving years, you may be able to afford
higher risk investments that could possibly deliver higher rates of return. But
as you approach retirement, higher risks lead to greater worries and may be
inappropriate. This should be a key topic of discussion with your
financial advisor. Keep in mind that independent advisors can generally offer
you a much broader range of options. </span></div>
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<span style="font-family: Georgia; mso-bidi-font-family: "Times New Roman";">To ensure you won't run out of money, ensure you are putting
money aside on a regular basis. Products like annuities and variable annuities
are insurance products that generally offer a greater return than GICs, and
offer fixed, guaranteed income for the rest of your life, even if you outlive
the capital. This can be a good place to your discussion with your financial
advisor to find the best solutions for your situation.</span></div>
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<span style="font-family: Georgia; mso-bidi-font-family: "Times New Roman";">Please feel free comment if you would like to share your
experiences, would like to see a specific topic covered in future blogs or have
any questions around these issues.</span></div>
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<b><i><span style="font-family: Georgia; mso-bidi-font-family: "Times New Roman";">Next: My home is my nest egg… What do I do now?</span></i></b><span style="font-family: Georgia; mso-bidi-font-family: "Times New Roman";"></span></div>
Jack Bergmanshttp://www.blogger.com/profile/08525941420822823641noreply@blogger.com0tag:blogger.com,1999:blog-3383096502652403263.post-86960783161412728022012-10-04T08:06:00.000-07:002016-08-09T07:47:46.721-07:00<div id="yui_3_2_0_17_1348684075677360">
<br id="yui_3_2_0_17_1348684075677366" /></div>
<div id="yui_3_2_0_17_1348684075677361" style="background-color: transparent; color: black; font-style: normal;">
<span style="font-family: "georgia" , "times new roman" , serif;"><span style="font-size: small;">Will I have enough income?</span></span></div>
<div id="yui_3_2_0_17_134868407567780">
<span style="font-family: "georgia" , "times new roman" , serif;"><span style="font-size: small;"><br id="yui_3_2_0_17_134868407567786" /></span></span></div>
<div id="yui_3_2_0_17_134868407567781" style="background-color: transparent; color: black; font-style: normal;">
<span style="font-family: "georgia" , "times new roman" , serif;"><span style="font-size: small;"><br id="yui_3_2_0_17_134868407567792" /></span></span></div>
<div id="yui_3_2_0_17_134868407567787" style="background-color: transparent; color: black; font-style: normal;">
<span style="font-family: "georgia" , "times new roman" , serif;"><span style="font-size: small;">For those of us who don't have a defined benefit plan to rely on when we
retire (or have a plan that won't be enough to satisfy our financial needs) we require different investment strategies to fulfill our family's financial needs
that will last throughout our retirement years.</span></span></div>
<span style="font-family: "georgia" , "times new roman" , serif;"><span style="font-size: small;"><br /></span></span>
<span style="font-family: "georgia" , "times new roman" , serif;"><span style="font-size: small;">In
addition, low interest rates are making our investment decisions even more
challenging because it takes significantly longer for our savings to
grow and a much larger savings base from which to pay our expenses. Some
people can afford to take more risk by investing in assets like mutual
funds that are not secure, but if you are relying on this money to pay
your way as you approach your retirement years is this really a good idea?</span></span><br />
<div id="yui_3_2_0_17_1348684075677152">
<span style="font-family: "georgia" , "times new roman" , serif;"><span style="font-size: small;"><br /></span></span></div>
<span style="font-family: "georgia" , "times new roman" , serif;"><span style="font-size: small;">The short answer is a qualified maybe. Here's why.</span></span><br />
<span style="font-family: "georgia" , "times new roman" , serif;"><span style="font-size: small;"><br /></span></span>
<br />
<div id="yui_3_2_0_17_1348684075677143">
<span style="font-family: "georgia" , "times new roman" , serif;"><span style="font-size: small;">For
years we've been told by people who sell riskier investments that
taking on a 'balanced approach' or just a little more risk means you'll get a higher return on your investments.
They also tell us that when the market goes down it's a buying
opportunity because the markets will recover and in time we'll get
better over-all returns. The idea is that the longer you are invested,
the higher the <span style="font-style: italic;">probability</span> you will end up with above average returns.
In general this is good advice when you have a time horizon of many many
years and/or you have invested excess money you won't need to depend on. </span></span></div>
<div id="yui_3_2_0_17_1348684075677187" style="background-color: transparent; color: black; font-style: normal;">
<span style="font-family: "georgia" , "times new roman" , serif;"><span style="font-size: small;"><br id="yui_3_2_0_17_1348684075677198" /></span></span></div>
<div id="yui_3_2_0_17_1348684075677214">
<span style="font-family: "georgia" , "times new roman" , serif;"><span style="font-size: small;">In his book <a href="http://milevsky.info.yorku.ca/published-books/pensionize-your-nest-egg-2010/" target="_blank">Pensionize Your Nest Egg</a>, Moshe Milevsky calls the five years before retirement and the five years after retirement the <a href="http://www.manulife.ca/canada/canada1.nsf/LookupFiles/DownloadableFileSolutions-RetirementRevolution-Manulifesmallfeature/$File/manulife_ws_retirementrevolution_e.pdf" target="_blank">Retirement Risk Zone</a>. During this time the most basic problem with risky investments is that there are no rate of return guarantees. Market
corrections will occur at various random times before, during and after the risk zone years and these corrections will decrease the value of your nest egg. As you take money from your savings and your capital erodes at the same time, it becomes a
very serious negative compounding problem that can spiral to zero values extremely quickly. </span></span></div>
<span style="font-family: "georgia" , "times new roman" , serif;"><span style="font-size: small;"><br /></span></span>
<br />
<div id="yui_3_2_0_17_1348684075677219">
<span style="font-family: "georgia" , "times new roman" , serif;"><span style="font-size: small;">In
a very basic example of this, let's
say you've just retired and have $100,000 in savings which then grow to
$105,000. You then start withdrawing an expected $5,000 a year. The
market corrects by 20% and your savings become worth $80,000. Do you
stop taking income and wait for the market to recover? How long will
that be for? Can you afford or even want to wait? (Today the <a href="https://www.google.ca/#q=tsx%20chart&rct=j" target="_blank">S&P/TSX60</a> is about at the same level it was in 2008!)</span></span><br />
<span style="font-family: "georgia" , "times new roman" , serif;"><span style="font-size: small;"><br /></span></span>
<span style="font-family: "georgia" , "times new roman" , serif;"><span style="font-size: small;">Though the future is unknown you know that
the average return of the <a href="https://www.google.ca/#q=tsx%20chart&rct=j" target="_blank">S&P/TSX60 </a>over the past 10 years or so has been a little under
5%. If that rate of return continues your savings would grow to somewhere around $78,500 before you take out another $5,000. Leaving you with $73,500. And so
on until the next correction. I'm sure you can see that, unless you stop
taking income for a period of time, it's unlikely your savings will ever catch up and you'll
run out of money much faster than you'd care to worry about. </span></span></div>
<span style="font-family: "georgia" , "times new roman" , serif;"><span style="font-size: small;"><br /></span></span>
<span style="font-family: "georgia" , "times new roman" , serif;"><span style="font-size: small;">If you wish to avoid this kind of risk or this has already happened to you what are some of the more common solutions available?</span></span><br />
<span style="font-family: "georgia" , "times new roman" , serif;"><span style="font-size: small;"><br /></span></span>
<br />
<div id="yui_3_2_0_17_1348684075677232">
<span style="font-family: "georgia" , "times new roman" , serif;"><span style="font-size: small;">Like
with most things financial, unfortunately there are no one size fits
all solutions because everyone's family, finances, current and future
needs and wants are quite different from each other so proper solutions
really depend on the outcomes you want and can afford. </span></span><br />
<span style="font-family: "georgia" , "times new roman" , serif;"><span style="font-size: small;"><br /></span></span>
<span style="font-family: "georgia" , "times new roman" , serif;"><span style="font-size: small;">In general
though, if your retirement income is too low for your needs, or you'd
prefer a higher after-tax income, it's time to explore whether your nest egg should be rearranged somewhat to provide a
higher after tax income stream and to do so without taking on any risk. </span></span><br />
<span style="font-family: "georgia" , "times new roman" , serif;"><span style="font-size: small;"><br /></span></span>
<span style="font-family: "georgia" , "times new roman" , serif;"><span style="font-size: small;">In my practice, I find that it often makes sense to initially explore whether it makes
sense to create a core income that's guaranteed for life. When it is appropriate, guaranteed income
for life is really something that you can rely on and can effectively
plan around. </span></span></div>
<span style="font-family: "georgia" , "times new roman" , serif;"><span style="font-size: small;"><br /></span></span>
<span style="font-family: "georgia" , "times new roman" , serif;"><span style="font-size: small;">Next...Financing your retirement living.</span></span><br />
<br />
<i><b><span style="font-family: "trebuchet ms" , "geneva"; font-size: small;">Jack Bergmans, Certified Financial Planner/Founding Partner</span></b></i><br />
<a href="http://bequestinsurance.ca/Home_Page.php" id="yui_3_2_0_17_134988013773295">Bequest Insurance</a><br />
<a class="headline" data-li-auto-click-utrki="u=identityHeadline&n=viewMemberProfile&y=CLICK" dir="ltr" href="https://www.linkedin.com/profile/view?id=AAMAAAIdcbkB7hJYXH0bjjVVMXlRu9Ryahn8aFc&trk=hp-identity-headline" style="background-color: white; border: 0px; color: #66696a; display: inline-block; font-family: Helvetica, Arial, sans-serif; font-stretch: inherit; line-height: 14px; margin: 0px; max-height: 14px; max-width: 100%; overflow: hidden; padding: 0px; text-decoration: none; text-overflow: ellipsis; vertical-align: baseline; white-space: nowrap;"><span style="font-size: x-small;">Personal financial planning for life!™</span></a><br />
<span style="font-family: "trebuchet ms" , "geneva"; font-size: small;"><a href="mailto:jack@bequestinsurance.ca">jack@bequestinsurance.ca</a></span><br />
<span style="font-family: "trebuchet ms" , "geneva";">Books:</span><br />
<span style="font-family: "trebuchet ms" , "geneva"; font-size: small;"><a href="http://hilborn-civilsectorpress.com/products/multiplying-generosity-and-ripple-effect" target="_blank">Ripple Effect</a></span><br />
<span style="font-family: "trebuchet ms" , "geneva"; font-size: small;"><a href="http://hilborn-civilsectorpress.com/products/multiplying-generosity-and-ripple-effect" target="_blank">Multiplying Generosity</a></span>Jack Bergmanshttp://www.blogger.com/profile/08525941420822823641noreply@blogger.com0