What retirement benefits will I receive from the government?
Many times questions arise as to when CPP and OAS should be applied for as individuals approach retirement. How much CPP are you entitled to and when should you take it? It is important to note that CPP and OAS should make up only a portion of your retirement planning to supplement your retirement income. The rest should come from your RRSPs and your pension plans.
According to the Department of Finance, the following make up the sources of Canadian Retirement Income:
- 28% – CPP/QPP
- 28% – OAS & GIS
- 44% – RRSPs and Pension Plans
What is the Canada Pension Plan (CPP)?
The CPP is a federal program that provides pensions to qualified contributors in retirement. Any benefits paid by the CPP are taxable both federally and provincially. CPP operates throughout Canada. Quebec has its own similar but not identical program, the Quebec Pension Plan (QPP), which is closely associated with the CPP.
Bank Mortgage Insurance – Just Say NO
I have to re-post this CBC Marketplace Expose on Bank Mortgage Insurance. I met with a couple about a month ago who were denied their Bank Mortgage Insurance claim. We met to apply for a life insurance policy that can never be cancelled by the insurance company. We applied so this would never happen to them again.
The key to remember is the banks are not licesnsed to sell mortgage insurance or life insurance. You must speak with a licensed life insurance agent like myself to obtain proper insurance. Say no to your bank mortgage insurance. You are not required to purchase it.
Can you guarantee your retirement dreams will come true?
There is a lot of information being advertised about guaranteed investment funds (or GIF’s). Some clients ask, “how can they do this”? “Why are companies insuring my investment”? “What are these guaranteed investment funds”? I hope I can clear up the information!
Do volatile markets give you the jitters? You’re not alone! The closer you are to retirement, the greater the risk to your savings. Your lifestyle and how long your savings last can change drastically if the value of your investments were to drop just as you are about to retire.
Saving for a home – HOW??
I was pleased to read an article in the Financial Post today if couples (or singles!) should use an RRSP or a Tax Freee Savings Account (TFSA) as a vehicle to save for a new home.
In the past Financial Advisors would recommed to their clients, who were buying their FIRST home, to possibly utilize their RRSP under the Home Buyers Plan. Under this plan, you can take out maximum $25,000 of your RRSP as a loan to purchase your first home, tax free. You must repay this loan starting in 2 years from when you take it out, and must pay it back into your RRSPs within 15 years. This is a great tool for someone who is young enough to repay the loan back and who has some savings in their RRSP.
Smart Financial Strategies
The markets are down; Stocks are falling; Ottawa projects a $34B defecit this year and $30B defecit next year. Although the world is experiencing a decline in the economy there are smart ways for you to keep a well-positioned money strategy and stay secure through this changing economy.
What can you do to keep investing in your future and take advantage of potential growth?
1. Pay Yourself First -
Do you have a pre-authorized monthly savings plan set up that follows your pay schedule? Setting aside part of your income, one for savings and one for retirement, even if its small amounts will grow significantly over time.
Tips For Starting a TFSA
10 Ways to Benefit From Contributing to a TFSA
With the launch of the new TFSA accounts this year, many are wondering if they should contribute to one and what the benefits are. Let’s explore 10 reasons why contributing up to $5,000 per year to this savings account is the best plan for your short and long term savings goals.
1. Emergency Funds
Emergency funds or rainy day funds, parked in a high interest savings account, guaranteed investment certificate (GIC) or money market fund, if they are non-registered savings will generate taxable income each year. Save yourself some taxes and keep your savings in the same type of account, but switch it into a TFSA to save you tax money.