Life Cycle Needs
Establishment Phase (Age 22-35)
Life Planning
- Career exploration
- Marriage
- Children
- Establishment of budget
- Due to increased debt
- Savings for a house
- First house
- Establish emergency fund
Lifecycle
Establishment Phase
(Age 22-35)
Premature Death Planning
- Debt liquidation fund
- Mortgage insurance
- Spouse income requirements
- Children’s Insurance
- Will planning
Growth Phase (Age 35-50)
Life Planning
- Bigger house
- Larger Family
- Increased debt
- Concentration on Career
- Growth or redirection
- Children’s education fund
- Emphasis on accumulation
of capital
Lifecycle
Growth Phase
(Age 35-50)
Premature Death Planning
- Premature Death Planning
- Debt liquidation fund
- Increased mortgage
insurance - Increased spousal income
needs - Child/home care fund
- Immediate money fund
(Estate settlement) - Will Planning
Consolidation Phase (Age 50-65)
Life Planning
- Financing children’s education
- Assessing current investments
with a view towards retirement - Children leave home
- Possible purchase of smaller
house - Debt reduction
- Income splitting between
spouses - Shift in emphasis from job to
quality of life
Lifecycle
Growth Phase
(Age 50-65)
Premature Death Planning
- Financing children’s education
- Assessing current investments
with a view towards retirement - Children leave home
- Possible purchase of smaller
house - Debt reduction
- Income splitting between
spouses - Shift in emphasis from job to
quality of life
Retirement Phase (Age 64 +)
- New lifestyle
- Change of residence
- Increased free time
- Need to maximize
retirement income - Preservation of capital
for heirs
Lifecycle
Growth Phase
(Age 64 +)
- Continuing income to spouse
- Debt liquidation fund
- Immediate money fund
(Estate settlement) - Special Bequests fund
- Will, current and up-to-date
Education Planning
Parents, grandparents, family members and friends can contribute to educational plans for children.
A Registered Educational Savings Plan (RESP) can be established for amounts contributed up to $2,500 per child per year. The government will also contribute 20% to the plan.
Educational savings plans used to be very restrictive but today these plans are very flexible. If the child doesn’t go on to post secondary school education, there are several options for using the money collected in the account. In no case will the amounts be lost because the child didn’t attend school.
Retirement Planning
Where will your income come from when you stop working? Retirement planning involves creating and co-ordinating incomes from sources other than employment income.
There can be many sources of income in retirement. Some are more tax efficient than others. Good retirement planning involves tax planning. Inflation is also a significant factor. Many of us will spend 30 or more years in retirement. Good planning will identify the obstacles as well as the opportunities available to you. For peace of mind consult with a Certified Financial Planner to make sure you collect the right amount of income for a comfortable retirement.
Bank Referral Products
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Estate Planning
The Certified Financial Planners at Stewart Fisher and Associates, Inc. can assist you with organizing your estate in a tax efficient manner.
We simplify things for you and make it easy to manage. Estate Planning involves the organization of your estate so your heirs receive exactly what you stipulate. We help you to minimize taxes that may be levied on your estate. We also identify potential problem areas and assist you in implementing solutions.
Business Succession Planning
If you own a business, what plans have you made to retire from the business? Who will buy it? Worse yet, what would happen to your business share if you passed away?
Business succession planning involves passing your business interest to a successor during your lifetime and/or making sure your heirs will receive without hassle free at the value of your interest if you die young. We consider taxes and minimize or eliminate tax as much as possible. We identify the opportunities available to business owners who are concerned about their business interest at death or retirement.
Referrals to Accountants, Lawyers, Home & Auto Insurance
Many clients of Stewart, Fisher & Associates, Inc. are working with other professionals such as accountants, lawyers and general insurance agents.
We’ll work with your other advisors to make sure your planning co-ordinates with planning your accountant or lawyer has already put in place. We like to think of ourselves as another member of your team, ensuring your financial success.
If you are not currently working with an accountant or lawyer and require their services, we’ll arrange a short list of qualified experts from which you can choose.
If you would like a competitive quote on home or auto coverage, then we can refer you to qualified experts in that area.
RRSP Loans
This is one of the best tools for maximizing retirement savings. Investors can use these loans to top-up their RRSP and use-up some or all of their unused contribution room.
This means investors can reduce their taxes immediately by getting a larger tax deduction today. This deduction could result in a larger tax refund that can be applied back to repay the RRSP loan. This will also increase the RRSP growth potential through the power of compounding. This is because the larger the initial investment and the longer it remains invested, the greater the investment potential. These loans are extremely flexible and may be paid back at terms ranging from 1-5 years or longer depending upon the amount of the loan. RRSP loans also offer flexible rates of return that can be fixed or floating and usually offer a 90-day 1st payment deferral options that allows time for tax refunds to reach investors before a payment is due.
While borrowing to invest can be a powerful means to build wealth, the risks involved make it a strategy that is not suitable for everyone. Your financial security advisor and investment representative and your tax advisor can help you determine if borrowing to invest is a strategy that is right for you.
Leveraging magnifies gains or losses. It is important that you understand a leveraged purchase may involve a greater risk than a purchase using cash resources only. To what extent a leveraged purchase involves undue risk is a determination to be made on an individual basis by each investor.
Registered Retirement Savings Plan
A Registered Retirement Savings Plan (RRSP) is a financial savings instrument that allows contributions to be used as income tax deductions in hopes that people will save for their own retirement.
RRSPs were developed in response to the fear that the Canadian Pension Plan might not be around or adequate enough as the population grows older. Investors can deduct contributions against their year’s earnings. Every $100 deposited into an RRSP will save the investor from paying approximately $50.00 in income taxes. RRSPs also allow investors to share their RRSP contributions with their spouse to avoid paying higher tax on the higher income-earner. This is called income splitting and works because of Canada’s progressive tax system. RRSPs also allow a tax shelter from any income or capital gain earned inside the plan. All income and gains earned inside of the RRSP is automatically deferred until redemption which is assumed to be retirement age of the investor.
Group RRSP
Group RRSPs have become popular in recent years as more and more employers make them available to their employees. They can have all the same options as other types of plans.
An individual account is maintained within the group RRSP for each participating employee or can provide for an employee to contribute to an account in their spouse’s name. Contributions to a group RRSP by an employer form part of the employee’s deduction limit. They are also taxable income to the employee, offset by receiving an RRSP contribution receipt. Normally, contributions to group RRSPs are not mandatory. If employees do contribute however through payroll deduction, the income tax deducted from their pay can be reduced at the same time, recognizing the deduction in their taxable income. When an employee leaves their place of employment, their contributions to the group RRSP can usually be transferred to their own individual RRSP.
Registered Retirement Income Fund
Canadian investors cannot contribute directly to a RRIF but funds from an RRSP, another RRIF, a Registered Pension Plan, or a commuted RRSP annuity can be transferred into one.
Some RRIFs are similar to continuing an RRSP beyond age 70, with the exception that RRIF holders must take some taxable payments from the RRIF. Any level of payment can be chosen as long as the total withdrawn each year is at least equal to the minimum mandatory amount (based on the age of the plan holder or their spouse). There is no maximum payment level and many RRIFs allow holders to fluctuate payment options from year-to-year. RRIFs are designed to be a supplement to the Canada Pension Plan in providing retirement income to Canadians.
