Is this really RRSP season?

While RRSP planning should take place throughout the year, I’ll be the first to admit that many turn to their financial advisors in the first two months of the year, and often the last week (or day). That time of the year is here! For an income tax deduction to be used for the 2008 tax year, the deadline is March 2, 2009. Each advisor or institution will have a specific time deadline, and you have to remember that there will be others leaving it to the last minute. Typically, contributions must be made within the first 60 days of the year. However, because the last day is a Sunday this year, the deadline becomes the next business day of March 2, 2009.

There are different options for your RRSP investments, and you should also discuss whether the RRSP and/or the new Tax Free Savings Account (TFSA) is best for your situation. To allow your advisor to give you the attention your financial matters deserve, please don’t wait until the last day. Talk to your advisor now. You may even just want to know more about the RRSP and TFSA, so be sure to ask.

You may have arrived at this blog page from Twitter, Facebook, or another source. You are invited to go to the main page to learn more about Tony Ratcliffe and Ratcliffe Wealth & Risk Management.

 

**This message is an expression of the author’s personal opinions. The companies represented by Antony (Tony) Ratcliffe of Ratcliffe Wealth & Risk Management, as an independent agent/broker in Alberta, Canada, will not be held liable in any way for the opinions expressed herein.

A Money Management Webinar for You

Creating an online Money Management seminar is something I have been thinking of for some time, and I think that now is the time to move ahead. I would, however, appreciate a little input. Here’s what I have in mind as an initial session.

Participants would be led through a process to identify their cash flow, their current net worth, and creating a household inventory. We would discuss RRSPs and the new Tax Free Savings Account. Income protection (paycheque insurance) will be covered, including group benefits from employment. Of course, other money tips could be expected.

You could help me by replying to this post on the blog, by email, or by phone. Please let me know if there are specific topics you would like to see in an initial or followup webinar. I would also like to know whether you would prefer to have an interactive session with others, watch a prerecorded broadcast, or actually attend a group seminar that is not online. If attending a live webinar, what time of day and day of the week is best?

Season’s greeting to all!

**This message is an expression of the author’s personal opinions. The companies represented by Antony (Tony) Ratcliffe of Ratcliffe Wealth & Risk Management, as an independent agent/broker in Alberta, Canada, will not be held liable in any way for the opinions expressed herein.

The new Tax Free Savings Account

You have probably heard about the Tax Free Savings Account (TFSA) for Canadian residents. Do you understand what it means and how it might fit into your financial plan? It is apparent that there are misunderstandings, or a lack of knowledge, about how it can be used.

You can open an account now, with deposits taken as of January 1, 2009. Okay, due to the holiday, January 2 is more realistic! Every Canadian resident, age 18 and older, will have contribution room of $5,000 each year, regardless of income. This will also be indexed and rounded to the nearest $500. Unlike the RRSP, contributions are not tax deductible. However, any gain in value is not taxable, so no tax is payable when withdrawals are made.

A real advantage to the TFSA is the fact that amounts withdrawn are added back to the contribution room. In other words, you can withdraw and later return the amount to the account. This can be beneficial for a lot of financial planning strategies. You should also be aware that the types of investments vary widely from daily interest savings accounts to longer term holdings.

The TFSA will be an ideal way for people to establish their emergency fund, or rainy day account. It can have other short-term or long-term uses, so be sure to talk to your financial advisor.

 

**This message is an expression of the author’s personal opinions. The companies represented by Antony (Tony) Ratcliffe of Ratcliffe Wealth & Risk Management, as an independent insurance agent/broker in Alberta, Canada, will not be held liable in any way for the opinions expressed herein.

Left without adequate group benefits?

Many people find themselves without group medical/health benefits. This may include the self-employed, and it may be individuals who work for an employer that is unwilling or unable to provide coverage. I have also seen employees decline coverage thinking they were fully covered by their spouses’ employers. The latter may be true of health and medical coverage, but that does not extend to disability insurance. Others may have coverage that is inadequate for the employee needs.

If you do have benefits, I would like you to obtain a copy of your benefit coverage booklet. If you do not have one handy, ask your human resources department. Read the coverage carefuly–particularly limitations on prescriptions, life insurance, and disability insurance. Disability coverage will be limited in amount and, by virtue of the definitions, the duration. Your prescription costs may not be high at this time, but the it can be staggering if diagnosed with conditions that call for very expensive drugs. These may be beyond reach without adequate coverage. If you have any questions, ask for clarification.

If you do not have benefits, or you feel they are limited, do not leave yourself without coverage. Talk to a financial advisor who is licensed for life and accident & sickness products. Find out how an individual plan can provide the protection you and your family need. In financial planning, an important consideration is risk management. You do not want to build your wealth and suddenly lose it due to unforeseen circumstances.

 

**This message is an expression of the author’s personal opinions. The companies represented by Antony (Tony) Ratcliffe of Ratcliffe Wealth & Risk Management, as an independent insurance agent/broker in Alberta, Canada, will not be held liable in any way for the opinions expressed herein.

Understanding the guaranteed income for life offerings

During one of our recent social media group meetings, the Social Web Meetup in particular, I happened to mention the guaranteed income for life products, known also as Guaranteed Minimum Withdrawal Benefit. My friend asked if I would arrange a small coffee meeting to provide some information. Of course I will! As I explored what I would present in that meeting and in a webinar, I realized there was a great presentation all ready to go. One of the companies I represent, as an agent, is Manulife Financial Services. They introduced the first such product, known as IncomePlus. Manulife has some really good material on their website. Included is a 15 minute video that describes IncomePlus. There are also shorter videos breaking it down into segments.

I’m definitely ready to meet over coffee to discuss how IncomePlus and other products might fit into your plan, but I feel the benefit of this professionaly prepared video is too good to pass by. Please have a look and then consider talking to me or your financial advisor. If you are interested in the coffee meeting, just let me know and you can join us or we can meet separately.

Please visit the Manulife IncomePlus website. It opens with a short introductory video. The other videos are accessed through a link on the left side.

 

Establish Your Financial Independence

Please, please, ensure that you establish your own credit. There are certainly times when credit is required jointly, such as a mortgage, but everyone needs to establish their own credit history. You should avoid having everything joint or in one name. In the event of an unfortunate situation, including separation, accident, or death, it is vital that each individual be able to step in when credit is required. This could be as simple as establishing a utility account in your own name without having to pay a deposit for having little or no credit history!

A number of factors will come into play when trying to establish credit, such as current employment and income but, regardless, even if it is minimal, consider establishing yourself in the eyes of the credit reporting agencies. Did you know that no credit can be worse than bad credit? As you establish credit, be sure to protect it by keeping accounts in good standing. Talk to your financial advisor for more guidance.

Feel free to share your experience with credit and the need to have your own history!

While this is one of my tips in 10 Tips for Women about Money, this applies to everyone who reaches the age of majority (18 in Alberta).

**This message is an expression of the author’s personal opinions. The companies represented by Antony (Tony) Ratcliffe of Ratcliffe Wealth & Risk Management, as an independent agent/broker, will not be held liable in any way for the opinions expressed herein.

Rich is a State of Mind

I previously mentioned “Rich is a State of Mind: Building Wealth and Happiness,” a Canadian Bestseller book by Robert M. Gignac and Michael J. Townshend. As you may recall, Robert Gignac provided a couple of articles for me to post under ‘Resources’ on my website.

It has been some time since I read “The Wealthy Barber,” but “Rich is a State of Mind” is a new story type approach to introducing the basics of planning for you financial future. If you visit the website (link above), you can see the Table of Contents and a review a sample chapter. The ‘Order the Book’ tab will take you to where you can link directly to the Chapters.Indigo.ca page for the book. This is definitely a book that I will be recommending to my clients, and I hope I can bring many of you together with Robert Gignac in the future.

If you would like to discuss any of the concepts identified, even from the Table of Contents, just let me know!

Identify Goals

Have you actually sat down and written out your goals for your financial future? If you have a significant other, have you done this separately and then discussed them to develop goals as a couple? I encourage you to do so. It is an interesting exercise, and you may learn something about yourself or each other.

Goals are not just long-term. Consider the short-term to be within the next year or two. What purchases are you planning? What activities are happening within your family that may call on your savings? How about the mid-term of three to five years, or even longer? Is there a need for a new vehicle, a return to school, a new residence, or a major trip? Beyond this, looking at the long-term, you still want to map out potential major purchases that you have in mind, and you start looking forward to the retirement years. What does retirement look like to you? A common question I like to ask is… at what age you wish to be able to decide if you want to go to work or not? Finally, for your estate planning, do you want your assets to go to your beneficiaries or to the government?

It is only once you have identified goals that you can truly look at your true investment and insurance needs. Your financial advisor should be prepared to spend time addressing this with you in order that a comprehensive plan for your future may be developed.

“Identify Goals” is my third tip in my 10 Tips for Women about Money.

Create a Household Inventory

My second tip in the 10 Tips for Women about Money is to create a household inventory. I ask you to create the list plus have back up support for it. The back up is going to be whatever receipts you can find, warranty documents, and photographs or videos of the items. We are doing this to help establish your net worth and to record your belongings in the case of future loss or warranty claims.

You may wish to organize your items by rooms in the home, types of items, values, or some other category. Record descriptions, serial numbers, purchase costs, and appraisal values if you have any. A later step could be to ascertain current market values and replacement costs for similar items. While knowing the current value of your possessions determining your financial position, you will also know what it would cost to replace them. Through your general insurance agent, ensure you have replacement cost insurance to replace items at current market costs.

Copy your receipts and warranty documents or, better yet, scan them to make digital files. As previously mentioned, photograph or videotape your belongings to help you prove that you owned them. Most importantly, keep a copy of all of this in a location away from your home. I like to use an online back up service. They are extremely reasonable nowadays, and you may even find a free service that meets your needs. If you ever have the unfortunate need of sitting down with an insurance adjuster, or to file a police report for stolen items, you will be prepared.

Take charge and organize your finances

In my 10 Tips for Women about Money, the first point was to gather your recent statements, receipts, and other documents. You are going to need them as you prepare a cash flow analysis, a net worth statement, and a household inventory. Yes, as you likely guessed, this tip is not just for women. However, it was written for women who want to ensure they know what is going on in their financial world.

Some people are very organized and can present these items on a moment’s notice. They may even have the information documented on spreadsheets. Others either haven’t kept them or have to spend hours hunting them down. If you are the organized type, then please place a checkmark beside this tip. You are invited to help us with your comments. In later entries, I will discuss cash flow, net worth, and reasons for the  household inventory. 

How are we doing so far? Do you have any questions or stories to share?

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