Adjusting to retirement

Adjusting to Retirement

by AgingLife Changes

Preparing for your retirement takes years of planning and wise investing. It seems as if retirement has been the resounding theme of your financial planning life and when the time comes to put your plan into motion, there can be mixed feelings about it. Not everyone is counting down the days until they retire. Some people dream of days with no commitments or responsibilities, while others thrive in a fast-paced, demanding environment and never want to slow down. Retirement is a time in life met by everyone in their own way. Here are five points to consider when adjusting to retired life.   

Keep Your Mind Busy

A lifetime of having a daily task list and deadlines is a lot to give up. Although retirement is your reward for putting in a lifetime of work, it’s easy for your mind to become overwhelmed with the silence. It’s important to keep yourself and your mind busy once retirement living sets in. Consider doing some small projects to stimulate your mind, or to finally tackle your bucket list of books to read. Just be sure to keep your mind occupied and avoid sitting idle for too long.

Manage Your Spending Appropriately

Since your income picture will have changed with retirement, it’s important to manage your spending to ensure you have enough retirement money to last you the remainder of your life. A discussion with your financial advisor will help to guide your spending habits and make sure your savings and retirement income allow you to live life to its fullest.

Consider Downsizing

If you are retired, there might be more travel in your future which means your big family home might be empty for long periods of time. It might be a good plan to consider downsizing your house to a smaller home, whether that be condo or a bungalow. There will be less maintenance as well as the extra money generated from the sale of your home, and the layout will be more convenient for your lifestyle in your golden years.

Be Aware of Your Portfolio Growth to Predict Financial Future

Now that you are retired you will need to pay closer attention to your portfolio growth to help predict your future spending. The growth of your retirement fund is not something you may have monitored in the past, but now that you are living off of it, knowledge of its growth can help you predict your financial future.

Try Something New!

Retirement can be a time to discover a new passion that you didn’t have time to discover before. Take advantage of a free schedule and do something that you really want to do. Maybe join a dance class, learn pottery or even Tai Chi. Learn to speak Spanish, take up painting, sign up for spin classes, or volunteer with a cause close to your heart. Try something new and challenge your mind and body.

Retirement can be a time of rest and relaxation and personal discovery. Before you plan to retire, book an appointment to meet with your financial advisor to discuss your portfolio and ensure that your financial needs will be met in retirement.

Should you downsize?

Should you downsize?

by Financial PlanningLife Changes

Once your children go off to college or move out to start their own adult lives, even a modest house can feel like a sprawling estate. If you find yourself in the situation where you have an empty nest and are wondering what your next steps should be, talk to an advisor at The Beacon Group of Assante Financial Management Ltd. and assess if it’s time to turn your empty nest into your retirement fund.

Emotional Attachment & Nostalgia

There are many driving factors involved in the sale of a house. One leading factor is emotion. For some, the house may have more sentimental value than monetary value. Perhaps it was always the house where Christmas was held every year, or maybe even a family property passed down through the generations. Emotional attachment is possibly one of the most difficult hurdles to jump when it comes to the sale of a house.

Financial Considerations

There are also financial considerations to be made. Ask yourself: why are you selling? Is it to generate a large lump sum of money for your future estate beneficiaries to inherit? If this is your thinking, a financial advisor at The Beacon Group of Assante Financial Management Ltd. will be able to tell you if it’s the right time to sell or if the house is better left unsold to become part of your future estate as a sizable asset. This is a great way to pass tax-free money to your children, but you need to be mindful of probate tax. A financial advisor at The Beacon Group of Assante Financial Management Ltd. can help you decide what is best.

Maintenance

Another motivating factor that may influence your decision to sell is the upkeep. Having a large family home for only two adults is not always the most logical. An attractive option for many is to downsize to a low-maintenance, luxury condo that is more compatible with a more mature lifestyle.

Travel

If your retirement plans include plenty of world travel, then having an empty house may not be the best option for you. Selling your house and downsizing to either a smaller house or a condo will make leaving for long and frequent vacations much easier as there is less concern that something will go wrong while you are away. Travel may also be easier to accomplish with a large lump sum of money from the sale of your house.

Retirement looks different for each person. Don’t hesitate to contact the Beacon Group of Assante Financial Management Ltd. and begin discussions about the future of your family home.

Understanding the Financial Repercussions of Life Events

Understanding the Financial Repercussions of Life Events

by FinancialFinancial PlanningLife Changes

Whether you are facing a job loss or going through a lengthy divorce, these huge changes don’t just affect you personally, they also have a major impact on your finances. If you are lucky, you will have enough time to discuss and prepare for these life-changing events by putting together a financial plan. Unfortunately, these types of life changes tend to happen right out of the blue. Either way, it is important to be certain you are prepared to deal with any potential scenario. We have provided a few tips on how to keep your personal finances intact through a number of trying life events:

Job Termination

In the unfortunate event where your company deems your position expendable, what should you do? You will have a decent severance package to get you through the next few months, but you’ll need to find gainful employment quickly. If you happen to land a new job quickly, you can invest the money from your severance or use it to pay down debt. You could even use it to help kick-start a business venture you’ve been thinking about. You’ll land on your feet quick enough, but sitting at home with a few weeks’ worth of severance on your hands can help you re-evaluate your career and your life aspirations.

Separation and Divorce

Divorce not only involves personal consequences, but financial ones as well, especially if you have children together. You will need to update your will and your beneficiaries on any savings plans or life insurance you may have. If you need to start providing child support, you could need term life and disability insurance to protect those future payments. If you eventually re-marry, you may need to create a spousal trust so that your new spouse will have income while still leaving some inheritance for all of your children.

Taking care of a special-needs child

Caring for a child with special needs will require a lot of time and attention. Parents need to be devoted to their child’s development and health every step of the way. This situation also has financial repercussions. You might want to open a Registered Disability Savings Plan (RDSP) to ensure your child’s financial security. You may also establish a trust fund in their name.

When you experience a life change, contact The Beacon Group of Assante Financial Management Ltd. and they will help adapt your financial plans to fit the changes in your life.

Are You Prepared for the Unpredictable?

Are You Prepared for the Unpredictable?

by Financial PlanningLife Changes

Try as you may, you are not able to control everything life sends your way. A major life-altering event like sudden job loss or serious illness can throw you and your family for a loop. You can’t prevent these types of things, but the one thing you can do is prepare financially so you are ready for any possible scenario. We have outlined the steps you should take when a life-changing event suddenly crops up:

Sudden Job Loss

The first step you need to take when receiving the news that you will be let go is to seek legal counsel. Contact your lawyer to confirm that the terms of your termination and your severance package are acceptable. You should speak to a financial advisor to see if any portion of your severance is eligible to roll over to your Registered Retirement Savings Plan. You should also consider the possibility that the taxable amount can be split between two years instead of one. If you are lucky enough to find a new job in a timely manner, your severance package becomes a windfall. If you are still seeking employment after a month or two, your severance could run out and you may need to start using your emergency fund along with your Employment Insurance benefits.

Disability

To protect yourself from the financial repercussions of a debilitating injury, disability insurance can help. This type of insurance replaces a portion of your regular income if an illness or injury prevents you from going to work. You may have disability insurance under your employer’s group benefits plan, but you will want to check the level of coverage. If their definition of disability is restrictive, or if the income provided wouldn’t be enough, you want to consider personal coverage to supplement it. If you are self-employed, you should consider purchasing insurance that will replace a percentage of your income.

Critical Illness

Similar to disability insurance, there is also coverage for critical illness. Disability insurance replaces your income, but critical illness insurance covers the expenses associated with your illness. Heart attacks, strokes, and cancer are the most common conditions that are covered by critical illness policies.

If you want to make sure you’re prepared for any life-altering events, you should contact a financial advisor at The Beacon Group of Assante Financial Management Ltd. Having the peace of mind that you and your family are protected from the unpredictable is invaluable.

Finding Financial Opportunities in Life Events

Finding Financial Opportunities in Life Events

by Financial PlanningLife Changes

The events that occur throughout each of our lives can provide both opportunities and hurdles in the forecast of our finances. There’s no way to predict the way our lives will unfold or the financial outcomes, so for these reasons, it is important to have some sense of guidance when it comes to unforeseen changes that can happen in regards to our financial planning.

There are many factors that are involved when it comes to the outcome of our finances. Here are a few examples.

Income

Income obviously plays a major role in the leverage of financial planning. But it also includes external factors such as family size, ability for your spouse to work, education for the children, and whether you make any initial plans for investments. Every element contributes to potential future outcomes for your finances, and it can be tricky to know exactly where you may end up.

Job Loss

These days, no one can predict what the security of our jobs are, or will be over the next 20 years. Things change fast. If the loss of a job in your household occurs without any sort of safety net or plan set in place to allow some wiggle room for securing another, this could cause much added stress down the road. Being unprepared for turbulent outcomes can throw a peg into the wheel that can shake up any future plans that have been set in place.

Inheritance

At some point in life, you may receive some family inheritance. This can give you an opportunity that didn’t exist before. Whether you choose to spend it on a fancy car or invest it, for example, in some rental property in order to ensure a more secure financial future, the option is clearly up to you. But remember that every decision will affect your future. Properly planning ahead requires discipline.

Dealing With Your Parents’ Health

It may come to a point where you or your spouse’s parent may require frequent care. This means unexpected financial hurdles. Placing your loved one in home care is something that may require significant time, money and planning. Without the proper financial planning, this could cause potential problems for providing education funds for the kids down the road or a safety net for the future.

The bottom line is that life is unpredictable, and things change fast. It’s impossible to always foresee life events and changes that may occur. This is why it’s imperative to have guidance in developing some sort of financial planning for when life does throw hurdles at you so that you can do your best to make the most out of each situation and turn those hurdles into opportunities.

For all your financial planning needs, The Beacon Group of Assante Financial Management Ltd. is on your side.

Taxes and Succession Planning

Taxes and Succession Planning

by FinancialFinancial PlanningLife ChangesTax Planning

You spend your whole life paying taxes, why should the last step into retirement be any different? As you prepare yourself and your company to be transitioned to the next generation of owners and operators it’s important to plan for the taxes associated with your succession plan. Be certain to discuss with your financial advisor and legal counsel to determine which succession plan is best for your tax situation. Here is a brief look into a few options available to someone who is wishing to retire or sell their business.

Selling shares held in your own name to an outside party

You are able to sell personally held shares, but they are subject to a capital gains tax. There is a lifetime exemption of $750,000.00 in qualified small business corporation shares that you may be able to apply to the sale of your business. This is a possible way to offset a portion of the capital gains tax; this should be discussed with your financial advisor.

Selling corporate assets or corporately-held shares to an outside party

Another option for selling the company is to sell the corporate assets or the shares of the business held by a corporation or a holding company. The types of assets sold and the amount of income generated by the sale will determine how the taxes are to be treated. Once the corporation has liquidated all of its assets and no longer operates, you can choose to either dissolve the corporation or keep it operating to hold some of the revenue generated from the sale as a way of deferring taxes. This income can be paid to shareholders as dividends over the course of time.

Estate Freeze

This method is best for transferring the ownership to a chosen successor, not an outside party. This is typically done by transferring the common shares into preferred shares and then issuing common shares to the beneficiaries. This essentially freezes the tax liability and allows the successor to come into the business with little investment contribution. This is a commonly used practice when it’s a family business and the next generation is taking over.

Succession planning can be an exciting time because it means the next chapter in your life is on the horizon. But be certain to plan closely with your financial advisor from The Beacon Group of Assante Financial Management Ltd. in order to achieve the most tax beneficial and best plan available to you and your company.

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Adjusting Financial Plans When Your Marital Status Changes

by Financial PlanningLife Changes

Any change in marital status is a significant life shift, and thus it should always be accompanied by a reevaluation of your financial health. Whether you are getting married, divorced, or have been widowed, you will have to update your will and adjust the beneficiaries of your pension plan and insurance plan. Additionally, any big change in life status presents a fitting opportunity to reassess your investments, family trusts, and estate planning.

Marriage

If you are planning to get married, you should evaluate your financial options long before “I dos” are exchanged. Marriage opens up a whole new realm of financial opportunities, whether you and your spouse will be combining incomes or a non-earning spouse needs financial protection. Your financial advisor from The Beacon Group at Assante Financial Management Ltd. can help you assess your options. Additionally, marriage is an opportunity to take advantage of beneficial tax planning strategies, like income-splitting and combined or transferred tax credits.

Divorce

At the other end of the spectrum from marriage is divorce, but it’s an equally important life event in terms of the financial implication. You must cope with a reduction in financial assurances, like adjusting to a single income. Whether you are the spouse who is receiving or paying a lump sum settlement, you must make arrangements to give or receive such a large sum. Finally, it would be wise to invest in disability or critical illness insurance in case you are ever forced out of work. The team at The Beacon Group of Assante Financial Management Ltd. will assist you in developing a comprehensive financial plan that protects the future of you and your children as you navigate this stressful life circumstance.

Remarriage

If you are getting remarried and there are children involved, you will need to update insurance coverage and possibly equalize education savings. Your financial advisor can also assist you with updating your estate plans, like creating a spousal trust. A spousal trust will provide for your current spouse until death, and be dissolved as assets for the children from your first marriage thereafter.

Widowed

When your spouse passes, it may be an overwhelming and emotionally trying time. Your financial advisor can help you navigate this difficult phase by managing the proceeds from investment funds, insurance, and your spouse’s estate. You can experience a sound financial future even with this often sudden and tragic change in marital status.

In order to ensure a stable transition should you experience a change in marital status, your best practice is to prepare in advance. Your financial advisor can help prepare you for a happy and financially secure future.

An elderly couple drinks coffee in their backyard

3 Steps to Help Aging Parents Stay at Home

by AgingLife Changes

As your parents age, mobility limitations combined with an increase in care demands often require the move to a long-term care facility. Though long-term care facilities have their benefits, many seniors prefer to stay in the familiar and comforting environment that is their family home. In order to accommodate this request for your aging parents, there are three steps that must be taken.

Step 1: Assess Your Parents’ Needs

Many aging parents are able to live active and independent lifestyles well into their elderly years. For others, physical and cognitive difficulties necessitate 24/7 care from a healthcare professional. It is important to assess your parents’ needs for support and care and the level to which they can continue to conduct an independent lifestyle.

There are some conditions that clearly necessitate care, such as Alzheimer’s disease or an accident that has rendered your parent physically incapacitated. In other instances, you will need to keep a vigilant eye out for behaviours that indicate that your parent needs assistance. These behaviours may include mobility difficulties, forgetfulness with medication and bill payment, and trouble with daily tasks like meal preparation or bathing.

Once you have a better understanding of your parents’ needs, you will be able to draft a plan for support and arrange an appropriate level of funding to keep them at home.

Step 2: Evaluate Support Options

Once you have identified the particular needs of your parents, next you must evaluate what support is required and what is available. Between family support, provincial home care programs, private home care services, volunteer organizations, and errand services, can all of your parents’ needs be covered?

Some parents may only need occasional family support with running errands and providing companionship, which costs nothing but time. Others will require a 24/7 live-in caregiver to stay at home. You may be able to access many free or subsidized services, but there will likely be additional expenses required to help keep your aging parents at home.

Step 3: Arrange Funding

If your parents require the use of private services, you can calculate the monthly cost. Long-term care insurance, if purchased by your parents, can be used to cover some or all of the care expenses. If not, you must make arrangements to cover the cost of private home care.

The Beacon Group at Assante Financial Management Ltd.’s financial planning services can assist you with evaluating how to manage these monthly obligations. Your parents may also require financial planning to manage their savings.

As you navigate this process with your parents, it is wise to look ahead to your own future. Should you also decide to live out your older years at home, the financial decisions you make now will make this possible down the road. For more information about retirement planning, contact the Beacon Group at Assante Financial Management Ltd.