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.

In Case of Emergency, Contact Info on Cell

You have likely heard the recommendations to add ICE to your cell phone contact directory–great if it can be accessed! Yes, if something happens to you, an emergency contact can be identified by checking your phone for an ICE listing. However, many use the security code feature, so the directory would not be available. He’s another idea…

Some devices offer the opportunity to place owner information on the main screen. This is where you should consider adding your ICE contact information. It is quite visible when my Blackberry is locked. Why is it important to me to mention this? Well, as an insurance agent I am committed to ensuring that people are protected financially when something happens to them. I also feel compelled to help deal with minimizing risk such as getting quick access to someone close at the time of a medical emergency.

Thanks to @adampatterson (a contact on Twitter.com) whose comment this morning reminded me I had wanted to pass along this ICE info. Adam found a cell phone with no home number located on it.

You can follow me on Twitter at http://twitter.com/TonyRatcliffe.

**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.

Newsletter Uploaded, Insight Into Financial Planning

A newsletter I provide to clients and visitors to my website is Insight Into Financial Planning. It has now been uploaded to ‘News & Tips’ under the ‘Resources’ tab. This edition provides an introduction to the Tax Free Savings Account, information about Spousal RRSPs, and a tax tip. I hope you enjoy it, and I welcome any comments.

Access Insight Into Financial Planning here

 

**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.

Understanding Term Life Insurance

I would like to help you understand term life insurance. If you do understand, then you can jump right to some important questions: Are you paying too much for your term life insurance, are you underinsured, are you overinsured, and why should you have a personal term insurance policy? There is a lot to be written on this subject, but I am going to provide a little insight that may lead to further questions or discussion.

First, term insurance differs from permanent insurance in that it will eventually expire at a given age. Quite common are term policies that are guaranteed renewal and convertible. This means that the stated term (often 10 or 20 years) will renew for further peiods of that length without evidence of good medical health. The renewal premium rates are specified in the original illustration provided by your insurance agent and in the insurance policy. “Convertible” means that you can convert the policy to a permanent one, without evidence of good health, up to the conversion date.

In general, the premium rates for new term insurance policies have decreased. Also, please understand that it is less expensive to obtain a new policy than to pay the guaranteed premiums for the renewal period if you are still in good health. This means that you should discuss with an insurance agent whether it is in your best interest to consider a new policy at this time. A number of factors must be considered, but I would definitely be considering it close to the renewal dates for a term policy.

You may also be paying too much if you are overinsured and paying for coverage you do not need. You may be underinsured. Ask for an insurance needs analysis to see where you stand.

I want to touch on one advantage of a personal policy rather than the creditor type obtained, as an example, with a mortgage. Here’s my concern. If you obtain mortgage insurance, the insurance coverage decreases as the mortgage decreases. In later years, you may wish to buy a new property, at a higher value, or change your mortgage to a new lender. If your health is not as good, you could find yourself uninsurable or facing surcharges. If uninsurable, the best you could hope for is to have the remaining coverage amount relate to the new property. If you go to a new lender, you could be without coverage. Had you obtained a personal policy in the first place, you would still have that full amount of coverage. Also, the traditional mortgage insurance, through the lender, will pay the amount of the outstanding mortgage to the lender. With a personal policy, the beneficiary decides whether the mortgage should be paid or if monthly payments should be continued with the death benefit used for other purposes.

You do not want to buy more insurance than you need, but it is important to project future needs. Obtaining coverage while you are younger and healthy will result in lower premiums!

What would you like to know about term life insurance or other coverages?

 

**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.

Questions to ask yourself relating to Living Benefits

There are four questions that I like to pose. For most, the answers should lead to the conclusion that a discussion of Living Benefits with your insurance advisor is in order. Here they are:

1. Do you know someone who has had cancer, a heart attack, or a stroke, or another serious health condition?

2. Did he or she plan on it?

3. Did he or she go thorugh any unplanned emotional or financial distress at that time?

4. Would cash have helped?

The Living Benefits include Disability, Critical Illness, and Long-Term Care Insurance. One must also ensure they are adequately covered for extended medical and hospital, particularly when traveling. For a quick introduction to Critical Illness Insurance, I invite you to read my post and watch the short, linked movie: The Origin of Critical Illness Insurance.

 

**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.

RRSP Loan Rates Increasing

I’ve received yet another notice of RRSP rates increasing next week. It looks like the opportunities for prime or prime minus are disappearing. If an RRSP loan is on your mind to ensure an income tax deduction, call your advisor (or, preferably, me) right away. Just remember, the loan proceeds can be retained in guaranteed investments. If you don’t fully understand RRSPs and whether they are appropriate for you, your advisor can help.

 

**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.

Segregated Fund Guarantees

Diminishing value in investment accounts is definitely causing concerns. This is raising the awareness of the maturity and death benefit guarantees provided with segregated funds. A brief overview of segregated funds is provided by Empire Life. Their page also provides a link to the Canadian Life and Health Insurance Association where a number of publications are available to help you understand insurance products. One is, ‘A guide to segregated fund contracts.’ Perhaps your insurance advisor has already talked to you about the benefits of these funds. Either way, if you don’t have a clear understanding of them, I encourage you to take some time to learn a little more and ask questions.

 

**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.

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