Autumn 2015 Newsletter

Autumn 2015 Update mc-wealth-nov-2015-newsletter-docx     Our Contact Information: Debbie McCulloch – debbie@mcwealthmanagement.ca Anne Marie Mucci – annemarie@mcwealthmanagement.ca        www.mcwealthmanagement.ca  Investia Financial Services...

Summer 2015 Newsletter

Summer Update mc-wealth-june-2015-newsletter-pdf     Our Contact Information: Debbie McCulloch – debbie@mcwealthmanagement.ca Anne Marie Mucci – annemarie@mcwealthmanagement.ca        www.mcwealthmanagement.ca  Investia Financial Services...

Spring 2015 Newsletter

Spring Update mc-wealth-newsletter-may-2015 We are Moving! After over 10 years on Sunray Street and 18 years in Whitby, we are moving. Debbie has sold the Commercial unit and it is time for change.We are very excited to be moving to a great office in Ajax as of the end of May. Our new address and phone numbers are: 50 Commercial Avenue, Suite 200 Ajax, Ontario, L1S 2H5 Phone: 905-427-4406  Fax:  905-427-4407  Toll Free: 1-844-427-4406 Contact Information: Debbie McCulloch – debbie@mcwealthmanagement.ca Anne Marie Mucci – annemarie@mcwealthmanagement.ca         www.mcwealthmanagement.ca        ...

Four critical retirement investing mistakes

Four critical retirement investing mistakes to avoid From failing to plan to ‘extreme’ investing, these financial missteps are standing in the way of Canadians’ retirement goals. By: PAUL BRENT Date: July 30, 2015 It can be a challenging time to guide Canadians to a secure and successful retirement. Defined benefit pensions are becoming a relic of the past, rock-bottom interest rates have crimped fixed income returns and tepid global growth has made equity markets unpredictable and unstable. When you add in record personal indebtedness, a weak Canadian economy and an aging population, it becomes clear that for financial advisors and their clients, the stakes are higher than ever before. To keep retirement goals on track, it is critical to identify and avoid the common investment and retirement planning errors that typically trip up Canadians. 1. Absence of a financial plan Perhaps surprisingly, the weakness that continues to crop up most often is the absence of a well-thought-out financial plan, says Kari Holdsworth, vice-president of individual wealth at Sun Life Financial in Waterloo, Ont. “People don’t plan to fail, but they often fail to plan,” she says. The 2015 Sun Life Canadian Unretirement Index, a poll conducted by Ipsos Reid that tracks Canadians’ attitudes and expectations about retirement, reported that just 33 per cent of people work with a financial advisor and just 22 per cent have a written financial plan. “People without a financial plan potentially don’t have the assets they need to achieve their goals,” says Ms. Holdsworth. “But more importantly, they don’t have a crisp understanding of what their goals are and whether there is a gap...

Financial Planning Fees

Do you know how your financial advisor gets paid? Here are a couple good videos that talk about this issue. There will be more and more info coming out in the months to follow about this, as there will be changes in your statements that will show you how much you are paying for your services. Please take a few minutes and check it out. Love to hear feedback! View videos for great...

Canadian Struggling with Financial Decisions

Canadians struggling with financial decisions One in two Canadians feel personal finances are more complicated now than they were 20 years ago, survey finds By Tessie Sanci | February 20, 2015 10:30 While 66% of Canadians are saying they could benefit from additional financial knowledge or advice, 46% of Canadians are also not planning to see a financial advisor in the next year, according to a poll conducted for CIBC. One in four respondents also say they lack confidence in their overall financial knowledge, and 52% say they have struggled with making a financial decision because they felt they lacked the necessary knowledge. “While the majority of Canadians generally feel confident about their overall financial knowledge, they may want to seek advice when making certain financial decision that occur less frequently, such as renewing a mortgage, or determining where to invest an inheritance,” says Christina Kramer, executive vice president of retail and business banking for CIBC. The survey also found that 53% feel managing their personal finances is more complicated today than it was 20 years ago. “As personal finances have become increasingly complex with greater choice available in the market and more and more information driven through technology, it’s not surprising that Canadians are feeling overwhelmed,” Kramer says. The survey was conducted online with 1,510 randomly selected Canadian adults who are also Angus Reid Forum panelists. It took place between Jan. 16 and...

Mortgage, RRSP or TFSA?

Paying down low-interest debt, such as a mortgage, can negatively impact retirement savings, says CIBC’s Jamie Golombek By Tessie Sanci | February 19, 2015 11:00 Almost three-quarters of Canadians would prefer to pay down debt over adding to their retirement fund, according to a poll conducted for Toronto-based CIBC. “The decision to pay down debt at the expense of retirement savings is often an emotional one that isn’t driven by logic,” says Jamie Golombek, managing director of CIBC Wealth Advisory Services. More than half of Canadians, at 56%, say they want the financial freedom of being debt free while 20% believe they have too much debt and want to pay it off. Only 11% believe the interest rate on their debt is too high and prefer to repay their debt instead of investing into a registered retirement savings plans (RRSP). Canadians who are paying down mortgages while interest rates are low may be depriving themselves of the benefits from investing extra money into an RRSP or tax-free savings accounts (TFSA), says Golombek. This is if the individuals in question do not have a high level of debt, can handle an increase in mortgage interest rates and can tolerate some risk in their investment portfolio, he adds. “Of course, if [someone is] holding high interest debt, paying that down is almost always the best choice,” says Golombek. Golombek explains how paying down low-interest debt, such as a mortgage, can negatively impact retirement savings in his new report, Mortgages or Margaritas: Is paying down debt putting your retirement at risk? The report illustrates the potential benefit of long-term savings in an...

Have you ever heard of the Dower Act?

Don’t be embarrassed if you haven’t, because most people don’t have a clue what it is even though it’s very valuable information to have– especially if you’re planning on getting married one day. The textbook definition of The Dower Act is: “a provincial legislation that prevents a married person from disposing of the homestead without the consent of the other spouse. This includes the right of the surviving spouse to a life estate in the homestead as well as the personal property of the deceased married person.” History of the Dower Act The Dower Act was founded in the early twentieth century by a Canadian feminist named Emily Murphy. Murphy met a woman one day who had been left homeless after her husband abandoned her and her children, and sold their family farm. Seeing the injustice in this, Murphy devoted several years to appealing to MLAs. Eventually the Act was made a law in Alberta in 1917, and later became the standard across the nation. What does the Dower Act mean? In essence, the Dower Act prevents two main situations from happening: 1) A spouse selling the home without his family’s consent, thus forcing them to leave 2) A widow being forced from their home after the death of their spouse (even if the home has been left to somebody else, for instance the deceased’s offspring, they cannot claim the home for themselves until the widow has also passed or chosen to leave) Does the Dower Act Apply to Me? If you feel like you’re in a position to enact the Dower Act, but aren’t sure, don’t be stressed. There are only...

TFSAs are a great way to save!

TFSA’s are a great way to save for both long and short term. The Tax Free Savings Account is a hybrid between your RRSP and regular savings accounts.  That is because the money you put in to your TFSA has already been taxed, you do not get a tax refund when you put the money in, any growth does not get taxed and when you take money out, you do not pay any tax.  The trade off is an RRSP gives you tax back now, grows tax sheltered and you pay the tax when you take the money out.  If you can do without the tax break now, you will not pay tax in the future. Contributors tend to make common mistakes with TFSA’s. One is using the account to save for a child’s education. The registered education savings plan (RESP) is intended for this purpose – and has the added bonus of matching contributions by the government. Another common mistake is simply leaving contributions in a low-return savings account, rather than using investments that are likely to yield higher returns. However, investing directly in stocks in a relatively small-value account like most TFSA’s can lead to challenges when it comes to diversification. Mutual funds can often be a good solution to this problem. And while most individual investors may be able to choose an appropriate mutual fund on their own, a financial advisor will help ensure the funds meet your goals and time frame. Contact Debbie at www.mcwealthmanagement.ca or...

10 Ways to achieve Financial Success

10 Ways to achieve Financial Success for the Small Business Owner and Self Employed Whether you have been in business for fifteen years or fifteen days, you can achieve financial success. Getting there is usually not a matter of financial wizardry or luck but adhering to some basic principles. Here are ten ways to help you move closer to the financial dreams of your business: Set Objectives Pay yourself first Minimize Personal and Business debt Maximize your Retirement Saving options Diversify your investments Reduce your taxes Protect your dependents and business through life insurance Purchase adequate disability insurance Periodic reviews of your plan Avoid procrastination Many people put financial planning on the back burner until their early 50’s when panics sets in. At this point it is often too late! In the beginning of your business, develop the proper habits and the goals you set for achieving financial independence will be realized much more easily. To discuss these items and how they relate to you and your business, call MC Wealth Management...

The Retirement Plan

Planning for your retirement is a wise move at any age. While you probably won’t be as concerned with retirement planning in your twenties as you will be in your forties or fifties, it is never too early to start. Today, the average life expectancy for Canadians is about 85 years for women and 81 years for men. Since Canadians are living longer, it is important to start saving and planning ahead as soon as possible. Your retirement years may last as long as your working years, so you want to be sure you can spend them in relative comfort. Exactly how much you will need to save depends on the lifestyle you want for your golden years. If you wish to be able to travel or to winter in a warm climate, you will need additional retirement income. In general, you should aim to have 60% to 80% of your pre-retirement purchasing power during retirement. Where will my retirement Income come from? Canadians used to count on company pension plans plus the Canada Pension Plan/Quebec Pension Plan to provide for their retirement needs. Today, however, far more people are self-employed, and the annual CPP/QPP payout is only $8,500 or less depending on your income. So Canadians are having to assume increased responsibility for providing their retirement incomes. What are Registered Retirement Savings Plans? For most Canadians, a Registered Retirement Savings Plan (RRSP) is the cornerstone of their retirement strategy. Since 1957, Canadians have been able to shelter a portion of their earnings from taxation by investing them in RRSPs. The interest, capital gains and dividends generated by these...

Planning for Children’s Education

A college or university education is crucial to success in today’s job market and will be even more so in tomorrow’s. It is estimated that 65% of new jobs created within the next year will require a post-secondary degree. But while Canadian families are eager to give their children the benefit of higher education, tuition fees are increasing relentlessly. Four years of study at a typical Canadian university can cost around $16,000 for tuition and books. If a student lives away from home, the cost will be even higher. Start saving when they are young Children grow up quickly. All the more reason to start saving for their education when they’re still very young. If you begin early and invest on a regular basis, you can put the power of compound interest to work for your children. For example, a modest $200 a month in savings can grow to $60,000 by the end of 15 years (assuming an effective 7% annually rate of return). One way to plan for your children’s education is to set aside a specific portion of your savings for that purpose. Alternatively, you can create savings programs which are in your children’s names. These may include a Registered Education Savings Plan (RESP) and an in-trust account. Small amounts invested regularly can grow to a significant amount over time. An investment of just $200 each month can grow to $60,000 by the end of 15 years. What is an RESP? An RESP is a tax-sheltered investment plan specifically intended to help you pay for your children’s university or college education. You may contribute up to $5,000...