According to a survey recently conducted for Manulife Financial, one of the most important concerns for today’s small business owners is managing costs. Many are worried that economic conditions will inhibit the growth of their businesses. On the personal side of the equation, today’s small business owner is concerned with protecting the family in the event of an untimely death, a disability or a critical illness.

If you are a small business owner, you may benefit from looking at the checklist of needs found in the link below. In addition, your advisor can help you strike the proper balance between business and personal financial needs, regardless of the stage your business is at today.

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Once you retire, and lose your workplace health benefits, it is important to realize that you can not rely on the government to address all of your concerns. You may have to face large expenses especially if you require chronic care in the future. While your provincial health plan covers all treatments deemed medically-necessary, it does not necessarily cover such items as drug costs, dental care, and chronic care. There are many different kinds of health insurance coverage that can help protect you or your loved ones from some of the costs involved. For more information, click on the link below.

http://www.dynamic.ca/eng/snapshots/ret_health.asp?fromAdv=true

Manulife Investments published an article on this topic in the winter edition of Solutions magazine in 2008. The article outlines a conversation between two friends who differ in their approaches to investing. One believes that it would be best to stop her regular investment contributions, given the volatility in the markets; the other believes that her best option is to stay the course. The first is letting her emotions dictate her behaviour; the second is more fearful of losing the habit of saving than she is of coping with the ups and downs of the market. Sound familiar?

In many ways, investing is like exercising. If you want to benefit in the long run, you have to take some of the pain today; if you give in to the urge to stop your discipline, it’s much harder to pick it up again later.

For more information on the reasons for staying invested during trying times like these, please click here

The most important thing when making decisions about your financial future is to remember to be objective. This will help you to sleep peacefully throughout the volatility. If you understand something of what happened after past market sell-offs, you can reach more informed conclusions about what to do today. Those who allowed fear to guide their decisions at similar times in the past, unfortunately, missed out on some of the best days in the market. This decreased their returns quite dramatically as is shown in the article by Manulife Investments, referenced below.

No one can predict just when the markets will return to growth or become steady but if we look at historical data, it is easy to see that the markets don’t wait for good economic news to be published in the papers. They tend to go up in anticipation of that good news as we have recently seen. You may miss out on some of the best days if you choose to sit back and wait for the good news first. Speak with your advisor and do your best to remove emotions from your decision-making in the process. Getting an expert opinion can really help through the trying times.

To read the article in full click here.

Many Canadian investors have a combination of registered and non-registered investments to fund their retirement. It is important to remember that all income from a registered plan is fully taxable at your marginal tax rate. Where things become confusing or difficult to manage is with your non-registered investments. The taxation rates for these depend on the type of income earned: capital gains, dividends and interest income are each taxed differently.

If you and your spouse have both registered and no-registered investments, it will be important for you to consult with your advisor before deciding which income source to draw from first. He or she can assist you in determining the most tax-efficient method for your situation.

There are other sources of income available for your retirement that you may wish to consider such as the reverse mortgage, leveraging an insurance policy or the new tax free savings account.

To view the full article click here.

If it is decided that your parent cannot continue to live at home during their illness you will have to consider the out-of-home options, all of which will have different financial implications. As mentioned earlier, this will probably represent a significant change in your parent’s life and it is very important that they are brought into the discussion and consulted if they are able, before any decisions are made. Other family members should also be consulted. The potential options are:

Have your parent live in your home or the home of another child

This may appear to be an attractive option since your parent will have the benefit of continued close family contact. However, this decision needs to be carefully thought out and the various implications considered. Some of the questions to ask are:

1. Does your parent want to do this?
2. What are the costs (renovations, additional living costs, etc.)?
3. How will the additional costs be shared?
4. What will be the effect on the current family situation?
5. What time commitment will be required from family members?

Institutional Care for an Ill Parent

Generally speaking there are three types of institutional care:

1. Retirement or independent living

   This is where the individual is living in a retirement community but is able to take care of him/herself to a great degree and does not want the stress of taking care of a home and/or doing day-to-day chores such as cooking, laundry and cleaning. This arrangement also provides social interaction with other seniors and appropriate activities.

2. Assisted-living care

   With this arrangement the individual not only will have the meals and other services that are provided under independent living but also some medical assistance such as bathing and supervision and/or delivery of medications.

3. Skilled nursing facilities

   This is the highest degree of assistance and is appropriate for those individuals who need a high degree of skilled assistance and are not really able to take care of themselves. Some facilities have separate areas exclusively for those afflicted with Alzheimer’s disease.

Not surprisingly, in the three options above, the independent living is the least expensive while the skilled nursing facilities are the most expensive, reflecting the degree of assistance required by the resident.

Finding a Suitable Care Facility

Given the large number of facilities available across the country, this will require some research. It is assumed that your parent will want to stay in their own community so a local search is the best way to begin. The internet can certainly be of assistance as well as talking to friends and local medical professionals.

Visit this site to see a helpful retirement home database.

Once some potential facilities have been identified, do a web search. Visit the facility’s website to get a feel for what they do and how they do it. A web search may also bring up independent comments and observations from others.

You might also contact associations such as the Canadian Association of Retired People (CARP) who may have some information about the care facility.

A personal visit to the facility is extremely important. Once it has been determined what sort of care your parent requires, a checklist (below) should be completed to ensure that the individual will be getting the care that they need. Some approaches to take are:

• make an appointment to have a tour
• consider dropping by unannounced at a subsequent time. With a scheduled appointment it is assumed that the facility staff will be ‘putting their best foot forward’ and the impression given may not be indicative of the day-to-day situation.

You want to ensure that your retirement years are as fulfilling and stress free as possible. Having a solid understanding of your finances will be an important part of minimizing stress. The investment landscape can appear very confusing and intimidating with dozens of different investments and approaches available. Understanding your current situation and expectations for the future are critical in creating and maintaining a successful financial plan. Your relationship with your financial advisor is an important step in creating a financial strategy that works for you.

Consolidating your investments

You may hold some investments with other financial institutions. The problem with this approach at this time of your life is coordinating the different investments. An effective financial plan (especially when it comes to taking income out of your investments) requires looking at all your assets in total. Without this overall approach, you cannot accurately determine if the plan is correctly structured for your individual needs. There are specific income layering techniques your advisor can suggest to maintain tax credits, avoid clawbacks of benefits and reduce taxes. It is crucial that you consolidate your investments in one place with your primary financial advisor. By doing this you and your advisor can confidently plan and monitor your financial situation. You should also be able to rely on your advisor to call in any specialists to deal with particular issues. This could be tax specialists, estate lawyers, insurance specialists, etc.

Keeping the tax bill down

As at any time in your life (and death), tax is a constant issue. The tax system in Canada is complex and becoming even more so as time goes on. While no one likes paying tax, most of us appreciate that it is necessary but we certainly want to pay as little as possible while still playing by the rules. Your financial advisor can assist you in structuring your investments in a way that is most beneficial in reducing tax. For example, there are ways to split your income with your spouse which results in an overall lower tax payment. Or, if you have a mixture of registered and non-registered savings there are tax-efficient ways to draw on those funds. Depending on your situation, there may be other techniques to structure your affairs in a tax-efficient way prompting your advisor to call in a tax specialist to analyze your needs. Again, these strategies can only be effective if all your assets are consolidated with one advisor.

Educate yourself

First, to be an effective investor, you need an education in the basics of personal finance. So read a few investing and finance books. Flip through the financial section of the newspaper. Learn how to read and analyze a company’s annual report. Ask questions of your friends and family, and try to learn from their mistakes. The more familiar you become with basic financial strategies and investment concepts, the easier it will be to make appropriate investment decisions.

Determine your financial and life goals

There is no “right” way to invest—it all depends on what you want to accomplish with your portfolio. So before you invest, ask yourself: what are you trying to achieve? What are your financial and life goals? What do you want to do when you retire? What kind of legacy do you want to leave behind for your friends, family and community? The answers to these questions will help guide future investment decisions.

Write an Investment Policy Statement

Once you’ve thought about your personal financial goals, it’s time to write an Investment Policy Statement (IPS). Think of your IPS as a formal statement of investment principles, where you should define your goals, determine how the assets in your portfolio will be allocated and outline what you will look for in an investment before you add it to your portfolio. This simple declaration will help make financial decisions a little easier, and will serve as a simple, yet effective “gut check” during times of market volatility.

Don’t try to time the market

Many investors get wrapped up in trying to time the market, trying to pick the “perfect” time to buy low and sell high. The truth is, timing shouldn’t be part of the investment equation at all. By investing the same amount every month (for example, through a monthly pre-authorized chequing plan), you’ll be taking advantage of market volatility, buying more when the market is down and less when the market is up. A simple strategy, but it works.

Ignore the hype

During the dot-com days, it was hard to ignore stories about high-tech and telecom stocks soaring to the moon. But we all know what happened in the downturn that followed. The lesson: be cautious whenever you hear someone try to sell you a “sure thing.” Instead, do your homework, understand what you’re buying and make your investment decisions based on fact, not hype.

Work with a professional

Most of us have neither the time nor the knowledge to be investment experts, so consider working with a qualified financial professional. Find a professional you can trust, and build a partnership with them. Use their knowledge and experience to capitalize on opportunities, and avoid dangers. That’s the best way to become a better investor.

This content is for information purposes only and is not intended as specific investment advice. We strongly recommend that you consult your investment professional for a comprehensive review of your personal financial situation. Information is subject to change without notice and Your Finances Matter will not be held liable for any inaccuracies.

Technological advancements in the past number of years have impacted our lives greatly.  Most people who received a diagnosis of a serious illness like cancer years ago, could be expected to pass away as a result of that disease.

Today, thankfully, we live in a time when many survive such illnesses, and go on to live to their full life expectancy.  One thing remains the same however, and that is that few Canadians are prepared for the financial impact of a serious diagnosis.  That’s where critical illness coverage can help.  Critical Illness insurance is a living benefit – a lump sum of money that you receive if you should suffer from one of several covered conditions, and if the survival period is satisfied.

We all know that the emotional and physical strain of any critical illness can be severe, and if it were combined with a potentially damaging financial impact, the result could be devastating.

That’s where critical illness insurance benefits can be of tremendous help.  You are completely free to spend the money you receive any way that you like.  You could cover the lost income that results from your illness, pay down your mortgage, or finance your own out-of-town treatment.  The beauty of it is that it’s up to you-spend it where it will help the most, so that you can concentrate on getting better.  Why not take the family on a much-needed vacation?

Sadly, it is estimated that 70,000 people in Canada will suffer from a heart attack this year; between 40 and 50 thousand will suffer a stroke of some degree; 3075 Canadians will be diagnosed with cancer every week.

Why not talk with us about financial protection for you and your spouse? Call Kevin today to set up an appointment.