Getting Ready for Money Emergencies

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Life can throw unexpected events your way that can hit you in the wallet. Whether it’s falling ill, getting laid off, or facing hefty repair bills for your car or home, these situations can strain your finances. To stay ahead and avoid falling into debt, it’s a good idea to have an emergency fund. This is cash you set aside specifically to handle unforeseen expenses, so you’re not left scrambling for money when the unexpected happens.

Why Emergency Funds Matter

An emergency fund is like an insurance policy for unexpected expenses that everyone can benefit from. It’s a stash of money specifically saved to cover daily living costs during emergencies that catch you off guard, such as:

  • Sudden car repairs

  • Vet visits

  • Losing your job

  • Sudden home repairs

  • Medical emergencies

Creating an emergency fund helps you to:

  • Deal with surprise costs without going into debt

  • Stay away from expensive loans like payday loans or credit card cash advances

  • Keep control of your finances

  • Feel less worried about unexpected expenses.

An emergency fund offers peace of mind during life’s surprises, preventing debt by covering costs without needing to use up savings or retirement funds, which could result in extra fees.

How much do you need?

The amount you should save depends on your financial situation, like how much you earn, what you spend each month, and if you have any dependents. A good rule is to have enough money to cover three to six months of necessary expenses, like rent, groceries, bills, and childcare.

How to Build Your Emergency Fund

Building an emergency fund to cover three to six months of essential living expenses might feel overwhelming, but the key is to start saving gradually. Even putting away a small amount regularly can add up significantly over time.

Here are some ways to build up your emergency fund:

  1. Automate your savings: Pick how much money you want to save, when you want to save it, and how often. Then, arrange for the money to be automatically moved from your regular account to your savings account. You can set up this automatic transfer to happen on your payday. That means the money you’ve chosen to save will be moved as soon as your paycheque is put into your account.

  2. Take advantage of opportunities to boost your emergency fund whenever you can. This might happen when you get extra money, like a tax refund, a pay raise at work, or when you sell things such as a car. Even receiving money as a gift or getting a bonus from your job can help. Additionally, when you finish paying off a loan, consider putting the money you used for payments into your emergency fund instead. Since you’re already used to budgeting for those payments, it’s an easy way to increase your savings without much extra effort.

  3. Make it a habit: Make saving a regular part of your routine by incorporating it into your daily habits. Here are some simple tips to help you get started: drop any loose change into a container whenever you come home, set up a savings, mark your saving dates in advance on your calendar, and use sticky notes on your fridge to remind yourself to save regularly. These small actions can make a big difference in building your savings over time.

Where to keep your emergency fund?

Given that emergencies can occur unexpectedly, having quick access to your funds is important. Although a regular chequing account may offer immediate access to your money, it’s best to keep your emergency fund separate from your regular account. This prevents accidental spending on non-emergencies. Look for an account that:

  • Is distinct from your regular spending account

  • Has minimal or no transaction fees

  • Permits penalty-free withdrawals

  • Earns interest on your savings

Consider exploring “cash equivalents” as an option to invest your money. They’re a bit like cash but can also help your money grow with interest. They’re safe and easy to get your money from. But before you decide, make sure you understand how and when you can take your money out and if there are any extra fees or charges. Examples of cash equivalents include:

  • Savings accounts

  • Chequing accounts

  • High-interest rate savings accounts (HISA)

  • Guaranteed Investment Certificates (GIC)

  • Money market funds

Having an emergency fund can be a lifeline during tough financial times, preventing you from falling into debt. While there’s no fixed amount you should stash away, assessing your financial situation can guide you in determining your ideal emergency fund size. If you need assistance in planning your emergency fund, don’t hesitate to reach out to us for personalized guidance and support.

Contact Us

Network of Professionals

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Our Network of Professionals

As a financial advisor, my primary goal is to help you achieve financial clarity. I do this by accessing a network of dedicated professionals, each bringing their unique expertise to the table. Together, we provide personalized advice and services that help you make informed decisions and secure your future.

Financial Advisor

Think of me as your financial coordinator. I help you figure out your goals, create plans to achieve them, and keep everything on track. Whether it’s planning for retirement, managing investments, or saving for a major purchase, I have access to a network of professionals who ensure every aspect of your financial life works together smoothly.

Accountant/Tax Professional

Having an accountant or tax professional in your financial network is essential for keeping your financial records in order. They handle tasks like bookkeeping, preparing financial statements, and assisting with tax planning. Their role is particularly important during tax season. They help you file your taxes accurately and on time, taking the stress out of the process. By optimizing your tax strategies and ensuring everything is reported correctly, they help you save money. Their skills are invaluable for both your immediate needs and long-term financial planning.

Investment Advisor

Investment advisors focus on building and managing investment portfolios tailored to your short-term, medium-term, and long-term goals. They thoroughly research the market, evaluate investment opportunities, and offer valuable insights to help you create a well-rounded portfolio. Whether you’re saving up for a major purchase, planning for retirement, or aiming for other financial milestones, they assist in choosing the right investment vehicles, such as RRSPs, TFSAs, RRIFs, and non-registered accounts, to support your financial stability and future needs.

Life Insurance and Living Benefits Advisor

Life insurance and living benefits advisors are here to help you protect your greatest asset: yourself. Their job is to make sure you and your family are financially secure if unexpected events occur. These advisors walk you through different insurance options, including disability insurance, critical illness insurance, and life insurance, to find the coverage that fits your needs best. By understanding your unique situation and recommending the right policies, they provide you with peace of mind, knowing that you have a safety net in place for life’s uncertainties.

General Insurance Specialist

General insurance specialists cover a wide range of insurance needs, including auto, property, travel, and liability insurance. They assess your risks and recommend policies that provide the protection you need. Their advice helps you understand your options, compare quotes, and select the best policies to safeguard your assets, ensuring you are well-protected in various aspects of your life.

Banker

Bankers are there to help you navigate a wide range of financial services, especially when it comes to getting loans and credit products. They offer advice on securing personal loans, understanding credit options, and managing debt effectively. Whether you’re looking to finance a major purchase, consolidate debt, or build your credit, bankers provide the support and guidance you need to make informed financial decisions.

Mortgage Broker

Mortgage brokers assist you in securing financing for property purchases by accessing multiple lenders on your behalf. They assess your financial situation, compare mortgage products from various sources, and recommend the best options for you. With their ability to shop around and understand different interest rates, loan terms, and application processes, they ensure you get the best possible mortgage deal, making homeownership more accessible and affordable.

Realtor

Realtors are your go-to professionals for buying or selling property. They provide market insights, negotiate deals, and manage the legal aspects of real estate transactions. With their knowledge of local market trends and property values, realtors help you make informed decisions whether you’re purchasing a home, investing in real estate, or selling property.

Legal & Estate Professional

Legal and estate professionals play a vital role in your financial planning by handling the legal side of things, such as estate planning, wills, trusts, and probate. They make sure your assets are distributed according to your wishes and that all the necessary legal documents are properly set up. Their guidance helps you reduce estate taxes and smoothly navigate the legal processes, ensuring your wealth is transferred to future generations just as you intended.

Having a network of financial professionals is essential for achieving financial well-being. Each member brings their own expertise to address different aspects of your finances, from investments and insurance to legal and real estate matters. As your financial advisor, I act as the coordinator, ensuring that all these professionals work together seamlessly. By leveraging their combined knowledge and skills, you can gain financial clarity and know that every aspect of your financial life is taken care of.

Ready to take control of your financial future? Contact us today.

Empowering Your Family’s Financial Future: A Comprehensive Guide to Budgeting

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Taking charge of your family’s financial well-being through effective budgeting is a crucial step in securing a brighter future. We’ll explore the significance of budgeting and provide practical tips to help you manage your money wisely while ensuring the best possible support for your loved ones, including those with disabilities and their Registered Disability Savings Plan (RDSP).

Why Budgeting Matters for Families

Budgeting is a powerful financial tool that holds importance for all families:

  1. Financial Clarity: It offers a clear overview of your family’s income and expenses, helping you make informed decisions about allocating funds.
  2. Goal Achievement: Budgeting helps you allocate funds not only for your loved one’s RDSP but also for other family financial goals, such as saving for education or a home.
  3. Expense Control: It identifies areas where you can cut back on expenses, freeing up money for your family’s financial priorities.
  4. Debt Reduction: By tracking spending, you can allocate extra funds to pay down debt faster, ensuring your family’s financial stability.
  5. Emergency Preparedness: A budget provides a financial safety net for unexpected expenses, which can be especially critical for families with additional financial responsibilities.

Steps to Effective Budgeting for Families

  1. Calculate Income: Determine your total monthly income, including salaries, government benefits, and any disability-related support for your loved one.
  2. List Expenses: Categorize expenses into fixed (e.g., housing, utilities) and variable (e.g., groceries, entertainment).
  3. Set Financial Goals: Define short-term and long-term financial goals for your family, ensuring that your loved one’s RDSP contributions are part of the plan.
  4. Create a Budget: Use budgeting tools or apps to allocate income to expenses, savings, and financial goals without exceeding your income.
  5. Monitor and Adjust: Regularly track spending against your budget, making necessary adjustments to ensure your family’s financial health.

Tips for Successful Budgeting

  1. Be Realistic: Set achievable goals and create a budget that accommodates your family’s unique needs, including the financial responsibilities associated with the RDSP.
  2. Prioritize Savings: Ensure that contributing to your loved one’s RDSP is a top financial priority, but don’t forget to save for other family goals too.
  3. Emergency Fund: Maintain an emergency fund to cover unexpected expenses, which can benefit all family members.
  4. Review and Cut Expenses: Periodically review expenses to find areas where you can save and allocate more funds to your family’s financial priorities.
  5. Pay Yourself First: Treat savings, including RDSP contributions, as non-negotiable expenses, just like other essential bills.
  6. Seek Professional Advice: Consult a financial advisor who specializes in disability-related financial planning for tailored guidance.

Budgeting is your family’s pathway to financial security and ensuring a brighter financial future. By budgeting wisely and prioritizing your loved one’s financial well-being, you can control your family’s finances, reduce stress, and work towards a future filled with financial peace of mind. Remember, financial success for families means making informed choices that align with your values and aspirations. Start budgeting today to achieve financial wellness for your entire family, balancing the needs of all family members, including those who rely on the support of the RDSP.

Stay Ahead in 2024: A Comprehensive Checklist for Federal Tax Updates

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With the upcoming 2024 Canadian tax rule changes, it’s important to review your financial strategies. We’ve identified the key changes that we expect to influence financial decisions for investors, business owners, incorporated professionals, retirees, and individuals with high income or net worth.


Capital Gains Inclusion Rate

Starting on June 25, 2024, the tax on capital gains is changing. Until now, you would only have to include half of your capital gains in your income for tax purposes. But after that date, you’ll have to include two-thirds of any capital gains over $250,000 on your tax return. This is also the case for employee stock options. 

Consequently, for corporations and trusts, they will have to include two-thirds of all their capital gains, no matter the amount. This is a significant change. 


Lifetime Capital Gains Exemption (LCGE)

The budget proposes increasing the LCGE for qualified capital gains from $1,016,836 to $1.25 million, effective for sales made after June 24, 2024. This change increases tax benefits for individuals selling certain types of property, such as small business shares or farming and fishing assets.


Alternative Minimum Tax (AMT)
The 2023 budget included updates to the AMT, suggesting revising the charitable donation tax credit for AMT calculations, increasing the claimable amount from 50% to 80%.


Employee Ownership Trust (EOT)

The budget proposes a tax exemption on up to $10 million in capital gains for individuals selling their businesses to an EOT if certain criteria are met. 


Canadian Entrepreneurs’ Incentive

This new tax measure offers a reduced inclusion rate of 1/3 for up to $2 million in capital gains during an individual’s lifetime, with this limit being phased in over 10 years. However, it’s important to know that not all businesses qualify—this doesn’t apply to businesses in professional services, finance, real estate, hospitality, arts, entertainment, or personal care.

Below is a checklist to help you navigate the tax adjustments and ensure your financial plans are updated and aligned with the new rules.


Investors

  • Investments: Evaluate portfolios to identify where capital gains can be realized under the current lower inclusion rate.

  • Investment Property: Consider advancing the sale of such properties to benefit from the existing capital gains rate.

  • Estate Planning: Revise plans to address potential increases in capital gains taxes, ensuring estates are structured for tax efficiency.

  • Employee Stock Options: Adjust the timing of exercising stock options to align with the upcoming changes in inclusion rates.


Business Owners:

  • Corporate Investments: Assess the impact of increased inclusion rates on corporately held assets, exploring the timing of gains realization. Review trust-held investments. 

  • Lifetime Capital Gains Exemption: Maximize the benefits of the increased LCGE for qualifying business assets.

  • Employee Ownership Trust: Consider the advantages of transferring business ownership via an EOT.

  • Succession Planning: Update your succession plans to consider the potential impact of capital gains tax changes.

  • Entrepreneurs Incentive: Check if you are eligible to reduce capital gains taxes. 


Incorporated Professionals:

  • Investments: Assess both personal and corporate investments for the new inclusion rate. Determine the most tax-effective structure for holding and realizing gains from investments.

  • Succession Planning: Time the potential sale of your professional corporation to capitalize on the current LCGE.


Retirees:

  • Estate Planning: Update estate plans considering the impending increase in capital gains rates.

  • Life Insurance Coverage: Ensure life insurance is adequate to cover increased capital gains tax liabilities upon death.

  • Non-Registered Investments and Retirement Income: Review your strategy for non-registered investments to manage taxes on gains and adjust your retirement income plans to accommodate the upcoming changes in capital gains rates.


Individuals with High Income or Net Worth: 

  • Investments: Evaluate portfolios to identify where capital gains can be realized under the current lower inclusion rate. Review trust-held investments. 

  • Investment Property: Consider advancing the sale of such properties to benefit from the existing capital gains rate.

  • Estate Planning: Revise plans to address potential increases in capital gains taxes, ensuring estates are structured for tax efficiency.

  • Charitable Contributions: Align your charitable giving strategies with the new tax benefits and AMT considerations.

Please reach out to us to review your financial strategy together and ensure it aligns with the upcoming changes. 

Tax tips to know before filing your 2023 income tax

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This year’s tax deadline is April 30, 2024. It’s important to make sure you’re claiming all the credits and deductions you’re eligible for. We’ve separated this article into 2 sections: 

  • What’s new for 2023

  • Individuals and Families

What’s New for 2023

Advanced Canada Workers Benefit (ACWB)

Automatic advance payments of the Canada Workers Benefit (CWB) are now seamlessly distributed through the ACWB program to individuals who received the benefit in the last tax year. However, it’s important to note that not everyone who received the CWB in the previous tax year will automatically receive the ACWB payments. Only individuals who filed their 2022 tax return before November 1, 2023, are eligible for the ACWB payments.

Furthermore, it’s worth mentioning that the ACWB program eliminates the need to file Form RC201. Recipients are no longer required to fill out this form. Instead, starting in 2023, individuals should report the amounts from their RC210 slip on Schedule 6, Canada Workers Benefit, of their tax return. Additionally, for eligible spouses, the option to claim the basic amount for the CWB is available regardless of who received the RC210 slip.

Deduction for Tools (Tradespersons and Apprentice Mechanics)

Starting in 2023, the maximum employment deduction for eligible tools of tradespersons has risen from $500 to $1,000. Consequently, the threshold for expenses eligible for the apprentice mechanics tools deduction has also been adjusted. 

Temporary Flat Rate Method for Home Office Expenses

For the year 2023, the temporary flat rate method for claiming home office expenses is not applicable. Consequently, taxpayers seeking to claim such expenses for 2023 must utilize the detailed method and obtain a completed Form T2200, Declaration of Conditions of Employment, from their employer.

Federal, Provincial, and Territorial COVID-19 repayments

Repayments of COVID-19 benefits at the federal, provincial, and territorial levels, made after December 31, 2022, can be deducted and claimed.

First Home Savings Account (FHSA)

The FHSA is a registered plan designed to aid individuals in saving for their first home. Starting April 1, 2023, contributions made to an FHSA are typically deductible, and eligible withdrawals made from an FHSA for purchasing a qualifying home are tax-free. 

Property Flipping

Starting January 1, 2023, any profit generated from the sale of a housing unit (including rental properties) situated in Canada, or a right to acquire a housing unit in Canada, that you owned or held for less than 365 consecutive days prior to its sale is considered business income rather than a capital gain. This is applicable unless the property was already classified as inventory or the sale occurred due to, or in anticipation of specific life events. 

Multigenerational Home Renovation Tax Credit (MHRTC)

The MHRTC is a refundable tax credit designed to enable eligible individuals to seek reimbursement for specific renovation expenses incurred in establishing a secondary unit within an eligible dwelling. This enables a qualifying individual to live with their qualifying relative. If eligible, you can claim up to $50,000 in qualifying expenditures for each renovation project completed, with a maximum credit of $7,500 for each eligible claim. 

Fuel Charge Proceeds Return to Farmers Tax Credit

The Fuel Charge Proceeds Return to Farmers Tax Credit is now accessible to self-employed farmers and individuals involved in a partnership operating a farming business with one or more permanent establishments located in Alberta, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward Island, or Saskatchewan. If eligible, you may be entitled to a refund of a portion of your fuel charge proceeds. 

For Individuals and Families

Canada Training Credit (CTC)

The CTC is a refundable tax credit available to help Canadians with the cost of eligible training fees.

To qualify for the CTC, you need to fill out Schedule 11 for the following:

  1. Tuition fees and other applicable fees paid to an eligible educational institution in Canada for courses taken in 2023.

  2. Fees paid to specific organizations for occupational, trade, or professional examinations undertaken in 2023.

To be eligible for the CTC, you must meet all these conditions:

  • You resided in Canada for the entire year of 2023.

  • You were at least 26 years old but less than 66 years old at the end of the year.

  • Your most recent notice of assessment or reassessment for 2022 shows a Canada Training Credit Limit for 2023.

Canada Caregiver Credit (CCC)

The CCC is a non-refundable tax credit aimed at assisting individuals who provide support to a spouse, common-law partner, or dependent with a physical or mental impairment, as outlined by the CRA.

You might be eligible for the CCC if you aid:

  • Your spouse or common-law partner dealing with a physical or mental impairment.

  • Dependents such as children, grandchildren, parents, grandparents, siblings, uncles, aunts, nieces, or nephews residing in Canada, who rely on you for consistent provision of basic needs like food, shelter, and clothing.

The amount you can claim varies depending on your relationship to the individual, your circumstances, their net income, and whether other credits are claimed for them.

Child Care Expenses

Child care expenses encompass payments made by you or someone else to arrange care for an eligible child. This care allows you to participate in income-earning activities, pursue education, or conduct research funded by a grant.

If you qualify, you can claim certain childcare expenses as deductions when you file your personal income tax return.

Disability Tax Credit (DTC)

The DTC is a non-refundable tax credit designed to support individuals with disabilities, or their family members who provide support, by reducing their income tax responsibilities.

To be eligible for this credit, individuals must have a significant and enduring impairment. Once approved, they can apply the credit when filing their taxes.

The DTC aims to ease some of the extra costs linked with the disability by lessening the individual’s income tax burden.

Moving

You can claim moving expenses you paid during the year if you meet these conditions

  • You moved to a new residence for work reasons, to start a business in a different area, or to attend a post-secondary program as a full-time student at a university, college, or other educational institution.

  • Your new residence must be at least 40 kilometres closer, determined by the shortest public route, to your new work location or educational institution.

Interest Paid on Student Loans

You might qualify to claim an amount for the interest paid on your student loan for post-secondary education if it was obtained under the following acts:

  • Canada Student Loans Act

  • Canada Student Financial Assistance Act

  • Apprentice Loans Act

  • Provincial or territorial government laws that are similar to the aforementioned acts.

Only you, or a person related to you, can claim the interest paid on the loan within the tax year 2023 or the preceding 5 years.

Donations and Gifts

When you or your spouse/common-law partner donate to eligible institutions, you might be eligible for federal and provincial/territorial non-refundable tax credits when you file your income tax and benefit return.

Normally, you can claim a portion or the full eligible donation amount, capped at 75% of your net income for the tax year.

Seeking guidance?

Wondering if you qualify for valuable tax credits or deductions? Reach out to us – as your financial advisor, we’re here to assist you in optimizing your finances and maximizing your savings.

Source: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/whats-new.html

Canada Training Credit: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-45350-canada-training-credit.html

Canada Caregiver Credit: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/canada-caregiver-amount.html

Child Care Expense: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-21400-child-care-expenses.html

Disability Tax Credit: https://www.canada.ca/en/revenue-agency/services/tax/individuals/segments/tax-credits-deductions-persons-disabilities/disability-tax-credit.html

Moving: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-21900-moving-expenses.html

Interest Paid on Student Loans: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-31900-interest-paid-on-your-student-loans.html

Donations and Gifts: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-34900-donations-gifts.html

2024 Financial Calendar

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2024 Financial Calendar

Welcome to our 2024 financial calendar! This calendar is designed to help you keep track of important financial dates and deadlines, such as tax filing and government benefit distribution. You can bookmark this page for easy reference or add these dates to your personal calendar to ensure you don’t miss any important financial obligations.

If you need help with your taxes, tax packages will be available starting February 2024. Don’t wait until the last minute to get started on your tax return – make an appointment with your accountant to ensure you’re ready to go when tax season arrives.

Important 2024 Dates to Know

On January 1, 2024 the contribution room for your Tax Free Savings Account opens again. The maximum contribution for 2024 is $7,000.

If you qualify, on January 1, 2024 the contribution room for your First Home Savings Account opens. The maximum contribution for 2024 is $8,000. 

For your Registered Retirement Savings Plan contributions to be eligible for the 2023 tax year, you must make them by February 29, 2024.

GST/HST credit payments will be issued on:  

  • January 5

  • April 5

  • July 5

  • October 4

Canada Child Benefit payments will be issued on the following dates: 

  • January 19

  • February 20

  • March 20

  • April 19

  • May 17

  • June 20

  • July 19

  • August 20

  • September 20

  • October 18

  • November 20

  • December 13

The government will issue Canada Pension Plan and Old Age Security payments on the following dates: 

  • January 29

  • February 27

  • March 26

  • April 26

  • May 29

  • June 26

  • July 29

  • August 28

  • September 25

  • October 29

  • November 27

  • December 20

The Bank of Canada will make interest rate announcements on:

  • January 24

  • March 6

  • April 10

  • June 5

  • July 24

  • September 4

  • October 23

  • December 11

April 30, 2024 is the last day to file your personal income taxes, and tax payments are due by this date. This is also the filing deadline for final returns if death occurred between January 1 and October 31, 2023.

May 1 to June 30, 2024 would be the filing deadline for final tax returns if death occurred between November 1 and December 31, 2023. The due date for the final return is six months after the date of death.

The tax deadline for all self-employment returns is June 17, 2024. Payments are due April 30, 2024. 

The final Tax-Free Savings Account, First Home Savings Account, Registered Education Savings Plan and Registered Disability Savings Plan contributions deadline is December 31.

December 31 is also the deadline for 2024 charitable contributions.

December 31 is also the deadline for individuals who turned 71 in 2024 to finish contributing to their RRSPs and convert them into RRIFs.

Please reach out if you have any questions. 

Understanding Target Loss Ratio and Your Group Benefits Plan

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Group benefits can be intricate both in their establishment and administration. There are numerous details and considerations to be aware of when purchasing a group benefits plan, one of which is the target loss ratio (TLR).

Key Questions Addressed:

  • What is a target loss ratio?

  • How does my TLR influence my premiums upon policy renewal?

  • What steps should I take if I have concerns regarding my TLR?

Understanding Target Loss Ratio (TLR):
Here are the primary aspects you should understand about the target loss ratio (TLR):

  • It represents the expected profit point of your employee benefit plan’s comprehensive health and dental benefits.

  • TLR is the maximum dollar amount of claims paid by the insurance company, expressed as a percentage of your premium. For instance, if an insurance company pays $40 in claims for every $80 collected in premiums, the loss ratio stands at 50%.

  • The TLR is primarily determined by two factors: the number of members participating in the employee benefit plan and the annual premium paid.

  • The loss ratios can vary based on the type of insurance. For instance, the loss ratio for property insurance is typically lower than that for health insurance.

Does my TLR Affect My Premiums Upon Renewal?
Generally, your TLR won’t have a significant influence on your premiums when renewing. However, a notable increase or decrease in the number of staff members participating in your group benefits plan might cause some impact.

Other factors influencing your renewal premiums include:

  • A substantial amount of health and dental claims made.

  • Changes in the general demographics of your employees, such as aging.

  • An increase in the cost of services covered by your group benefits plan.

  • General inflation.

Addressing Concerns About TLR:
As someone overseeing a group benefits plan, your objective is to ensure optimal value for your premium expenditure.

If you’ve been collaborating with the same insurance provider for an extended period, it’s beneficial to explore other available options. Comparing offerings can help ascertain if the rate and TLR you’re being offered align with current market standards.

It’s essential to consider how varying TLRs might influence the long-term viability of your group benefits plan. If you’re keen on gaining deeper insights, consider reaching out to industry experts or consultants for guidance.

Do you have enough for retirement?

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Many of us dream of the day that we can retire and have the time to ourselves that we have dreamed of for so many years. But, to have a genuinely contented and relaxing retirement, you need to ensure that you have the means to afford it. So, now’s the best time to consider the three critical stages of retirement planning.

Accumulation

This is the stage you save for your retirement – essentially, the majority of your working life. So, naturally, if you start saving for your retirement early, you will have the ability to save a larger pension for the future, though this is not always achievable for young people or those on a low income.

Pre-retirement

At this point, you are making the final plans for your retirement. Although you are potentially making less money at this late stage of your career, it’s still a necessary time to continue saving and making sure that your investments are fit for purpose.

Retirement

Once you are no longer working, your retirement income will usually come from three key sources:

  • Government benefits: Canada Pension Plan or Old Age Security

  • Employer pension or retirement plan

  • Personal savings: Registered Retirement Savings Plan, Tax-Free Savings Account, Non-Registered Savings

Your concern will be to ensure that your money lasts the length of your lifetime.

Drawing up a retirement plan

A retirement plan is a crucial process to undertake during your working life, as it will help you outline and achieve your financial goals for the future. However, making such a plan doesn’t have to be daunting – here are our key steps to success:

  • Work out how much income you’ll need in your retirement. This is a key starting point to ensure that you save enough to meet this need.

  • Start early. If you can, invest any spare money into your retirement fund and keep going. Small amounts grow over time and can help you create a savings fund to meet your needs in retirement.

  • Diversify as much as you can. The best way to reduce your risk and exposure to poor market performance is to spread your investments. We can help you create a strategy that focuses on your attitude to risk.

  • Contributing to a TFSA or RRSP is a great place to start. Contribute the maximum amounts you can, and don’t forget to contribute on a consistent basis.

Talk to us today about your retirement goals.

British Columbia 2023 Budget Highlights

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On February 28, 2023, the B.C. Minister of Finance announced the province’s 2023 budget. This article highlights the most important things you need to know about this budget.

No Changes To Corporate or Personal Tax Rates

There are no changes to the province’s personal or corporate tax rates in Budget 2023.

Tax Credits Changes

Budget 2023 extends two corporate tax credits – the Farmers’ Food Donation Tax Credit until 2026 and the Interactive Digital Media Tax Credit to August 31, 2028.

As of July 1, 2023, the maximum annual Climate Action Tax Credit will be increased to $447 for an adult, $223.50 for a spouse or common-law partner, and $111.50 per child.

Renters with household incomes under $60,000 can apply for a new refundable Renter’s Tax Credit up to a maximum of $400. Renters with a household income of over $60,000 and less than $80,000 are eligible for a reduced credit.

Increased B.C Family Benefit

The B.C Family Benefit will increase as of July 1, 2023:

• The maximum annual benefit is now $1,750 for a family’s first child, $1,100 for a second child, and $900 for each subsequent child for families with an adjusted net income of under $27,354.

• The minimum benefit will now be $775 for a family’s first child, $750 for a second child, and $725 for each subsequent child for families with an adjusted family net income of more than $27,354 and less than $87,533.

The budget also includes a maximum annual supplement of $500 to single-parent families on top of the maximum annual benefit.

Carbon Tax Changes

Effective April 1, 2023, carbon tax rates will increase annually by $15 per tonne of carbon dioxide equivalent emissions. Qualifying commercial greenhouse growers will be eligible for a reduced point-of-sale reduced carbon tax on purchases of natural gas and propane.

The 2023 budget verifies that B.C. plans to implement an output-based pricing system (OBPS) that meets updated federal requirements to replace the current carbon pricing as of April 1, 2024.

Other Tax Changes

The budget introduces new taxation rules for online marketplace services and now excludes automated external defibrillators from provincial sales taxes.

Budget 2023 indicates refund rates for International Fuel Tax Agreement licensees will increase effective April 1, 2023. New purpose-built rental buildings will be exempt from the further 2% property transfer tax applied to transactions that exceed $3 million as of January 1, 2024.

Healthcare and Housing Spending

Budget 2023 contains several commitments to support health care and housing:

  • Various contraception options, including birth control prescriptions, will be free as of April 1, 2023.

  • One billion dollars has been committed to new treatment beds and treatment support for mental health and addictions.

  • $2.3 billion will go towards enhancing core services, recruiting staff, implementing a new pay model for family doctors, and fighting COVID-19.

  • In housing, $1.1 billion will be used to purchase land near transit hubs and improve student housing.

  • Over $569 million will be allocated to building projects and $454 million towards homelessness support and response programs.

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