Prospera Solutions

Holistic Financial Planning

Thu, 07 Dec 2023 17:40:12 GMT

In life, it’s often times important to look at the whole picture rather than just the one limited view. Getting the bigger picture allows you to see a situation in full and avoid making flawed decisions based on a skewed outlook. The same goes for planning for your financial future, where it’s important to ensure that all your financial assets are in place and working in unison to protect you and your family today and into the future.

What is Holistic Planning?

In the interest of that “bigger picture” and ensuring full financial protection for you and your loved ones, holistic planning should ideally encompass the following six areas:

Financial Management – this includes your cash flow, savings, and debt repayment.
Investment Planning – how you invest versus your risk tolerance and objectives.
Insurance and Risk Management – how you protect you and your loved ones against unexpected losses due to death, disability, health issues, property damage and other risks (hint: it may involve insurance!).
Tax Planning – considering current and future tax obligations, strategies to minimize and defer the negative impact of taxation as it relates to your financial plans, as well as means to strengthen your financial position to meet your goals.
Retirement Planning – the lifestyle you wish to enjoy in retirement, how much it will cost and the journey to achieving this.
Estate Planning and Legal Aspects – distributing your assets at your death efficiently, as well as naming your beneficiaries. Factoring legal aspects ensures any planning you do in your lifetime (or at death) doesn’t create any unforeseen issues.

Being holistic involves assessing all six of these areas collectively (not in isolation), before planning or implementing any one of them. This ensures resources are allocated in a planned priority to achieve maximum efficiency and that one piece of planning doesn’t cause issues with another.

The Benefits of Holistic Planning for your Financial Future

Although there are indeed many benefits to planning your finances with a more holistic view in mind, here are just a few to consider:

Confidence that you have robust and comprehensive planning in place – your planning is taken care of, so you can focus on enjoying your best life.
Saving you time and money – ensuring the best use of your precious time and finances, having access to more competitively priced products and holistic financial services via one Advisor (a one stop shop!)
Proactive conversations with your other professional Advisors – an Advisor providing holistic advice will be comfortable engaging with your other Advisors such as accountants and lawyers.
Ensuring your children/grandchildren retain cherished assets – holistic advice can ensure the next generation(s) can continue to enjoy the family cottage or other cherished assets, without having to sell them at an unfavourable price and time.
Less to the Canadian Revenue Agency (CRA) and more to your loved ones – the best planning will ensure more of your assets pass to those you want them to (and when).
Ensure children/grandchildren have access to great advice – there’s no need for your children/grandchildren to look elsewhere for advice.
Protecting you in your accumulation phase – you may be a disciplined saver and a savvy investor for your retirement, but it’s important to complement these great attributes with adequate protection from unexpected sickness, disability or even death that could derail your saving and investing; especially if you have people dependant on your ability to earn.
Tax and investment benefits – the financial planning universe is vast and holistic planning will ensure you make the most of any and all the tax saving and investment opportunities available and suitable for you.

So next time you are looking at your finances or planning for your financial future, be sure to make it holistic planning in order to get the most of your hard-earned dollars and ensure that you and your family have the necessary protection in place today and into the future.

Author: The Link Between

Get to know your money!

Thu, 07 May 2020 15:32:00 GMT

When I ask divorced women what they would say to their former married selves about their finances is “get to know your money”. The most regrettable thing that most divorcing women tell me isn’t that they regret getting married, it’s that they never learned about their household finances. They simply let their spouse take control and trusted all would be okay. The same holds true for many widows. Learning about your finances should be a priority for everyone at every age or life stage. Let’s get started!

Do budgets really matter?

Fri, 01 May 2020 21:21:00 GMT

No matter where you are in your life, whether you are going through a divorce or not, a budget matters. Everything you do in finance, personal or business, comes down to a well planned budget. The word “budget” is like the B-word no one wants to use but it’s an inevitable part of being a grown up. It’s a word that evokes the feelings of despair, fear, stress, the thought of not getting out of bed…you get the idea. I’m here to say the simple word is very simple in it’s task and it will replace those negative feelings with positive ones. Think: control, empowerment, bliss, heel-clicking whoo hoo’s! Yes, you can do it and I’m here to help you.

First, you will need to get your statements together (bank statements, credit card statements, lines of credit statements, etc.) that capture your monthly spending habits. Then you will add up your expenditures from each statement for each category on my Budget Planner . When you add up all of your expenses, does it equal or exceed your income? If so, you need to whittle down your amounts in the variable expenses categories. Don’t forget to include a savings category whether it’s for emergencies or saving for a special item (new tires, weekend getaway, spa treatment to de-stress post budget creation, etc.) Now that you have your budget done, you can give yourself a pat on the back and click your heels. See, you’ve had the power all along.

With your budget in hand, I suggest you revisit it monthly to make sure your spending is in check and tweak it if you forgot something. It will take a few months of checking in with your budget for it to become a habit. But staying on track is key to staying in control and not falling back into the negative thinking about the B-word. If you’d like some help on this, I’m only an email away.

Cheers and great job!

Holly

Are spousal RRSPs still useful?

Fri, 06 Jan 2017 03:32:00 GMT

Spousal RRSPs have traditionally been used as an income-splitting strategy in retirement. You can contribute to your spouse’s RRSP but claim the tax deduction yourself. Your total contributions (to your own and your spouse’s plans) are subject to your own RRSP contribution limits. In retirement, withdrawals are taxed in your spouse’s hands rather than yours, as long as the contribution has remained in the plan for at least three years. So you benefit from their lower tax rate in retirement, while reducing your own tax liability during your working years. But, in October 2007, the government introduced new pension splitting rules that allow Canadians to split pension income with their spouse. Here are situations where the spousal RRSP is still useful: • If you are planning to retire before age 65 and don’t have a registered pension plan; spousal RRSPs allow income-splitting before age 65 whereas pension income-splitting normally begins at age 65 • If you are saving for a home (each person can withdraw $25,000 under the Home Buyers’ Plan) • If you’re 71 or older and can no longer contribute to your own RRSP, you can still contribute to your spouse’s RRSP if you have earned income and your spouse is younger than 71 • If you and your spouse want to make the balance of assets in your household more equal.

Protecting children’s futures

Tue, 14 Jul 2015 22:12:00 GMT

A parent’s number-one concern is the health and happiness of their children. Ensuring that their children have the resources to help them pursue their dreams is often their top financial priority. Planning for the unexpected should include planning for illness. In the event that your child is diagnosed with a critical illness, you can receive a lump-sum benefit that gives you choices that you would not normally have, such as:

Chances are that due to the advances in medical treatments, your child will survive a critical illness. But how will it affect your savings? A little planning today can go a long way to ensure that tomorrow’s challenges can be overcome and dreams will come true.

10 Financial “Must-Knows” to Successfully Survive Your Divorce

Mon, 29 Jun 2015 20:24:00 GMT

by Sharon Numerow

1. Money will almost always become an issue in divorce

2. Gather everything you can about your family finances

3. Understand that a 50/50 division of property is not always fair financially

4. Consider the tax implications of all of your financial divorce decisions

5. Make sure that you can afford to keep the house before you settle this matter

6. Understand the value of your investment and RRSP portfolios

7. Ensure pensions are properly valued

8. Make sure that the payor of child and/or spousal support has life insurance to support these financial obligations

9. Seek FINANCIAL consultation during your divorce from a divorce financial expert not from a lawyer

10. Redo your will

Give Yourself a Raise!

Fri, 20 Mar 2015 16:34:00 GMT

Many Canadians are pleased to receive a tax refund each spring, but what if you had that money to spend each month when you really needed it and were able to contribute more to your RRSP contribution at the same time? Your employer is obligated to withhold income tax from your gross salary but you may be giving the government a free annual loan. The withholding amount may be reduced depending on the deductions and tax credits available to you. Your employer may be able to take into account your current RRSP contributions when determining your income tax withholdings if the employer makes the contributions on your behalf or with the permission of the Canada Revenue Agency (by filing a T1213). Your income tax withholdings could be reduced and your take home pay could be increased by having your employer factor in regular RRSP contributions. For more information on this and other tax planning questions, please contact us.

What is Longevity Risk?

Fri, 06 Mar 2015 01:40:00 GMT

Longevity risk is the danger that you will outlive your money – and it is becoming a greater threat to a healthy retirement with every year that goes by. Why is longevity a threat? Because we are living longer than ever before. Since the turn of the last century, life expectancy beyond age 65 has grown from 11 to almost 20 years for men; and from 12 to 22 years for women. Under current projections, individuals nearing retirement should prepare for the possibility of living another 20 years – and conceivably much longer. That requires not only a significant amount of savings, but also an investment strategy that accounts for a retirement that could compare to a working career in length. It’s also important to understand how your needs will change over time and the funding implications of that evolution. For example, traditional retirement goals, such as travel, may need to give way to practical considerations such as funding of mobility devices and long-term care. To fully account for the impact of longevity, consider meeting with me to review these risks and your current financial plan to make sure your retirement needs will be met.

The benefits of a Group RRSP

Mon, 02 Mar 2015 01:37:00 GMT

Providing further benefit options to your employees can go a long way in showing them you value their efforts, and it can also attract skilled employees. A Group RRSP is a low-cost, highly effective way of supporting your employees’ efforts to increase retirement savings and wealth. As the employer, you pay no fees in establishing a Group RRSP. The plan design can accommodate any number of participants and allow for various contribution levels and different investment profiles. Setting up a Group RRSP is very easy and simple to administer through payroll deductions. The employee’s contribution is withheld at source as a payroll deduction. You may top up this contribution with an employer contribution based on any incentive criteria (this contribution is completely optional, but is also a deductible expense for the company). Because the contributions are made regularly, the employee receives the related income tax deduction at the time of each contribution, instead of when filing a return at tax time. This results in a tax savings on each pay-cheque, which reduces the employee’s at-source deductions. I will provide any ongoing support needed to ensure that your plan is operating efficiently. When employees join your Group RRSP, I am happy to offer free investment planning advice to help them achieve their retirement savings goals.

How much Life Insurance do I need?

Sun, 01 Mar 2015 02:58:00 GMT

That’s an important question! How much money your family will need if you die and are not able to provide for them? Everyone’s financial picture and priorities are different but there are a few simple steps to determine a coverage amount that meets your needs. First, determine how much will your loved ones need to pay for immediate costs like funeral expenses, legal and estate fees, and any outstanding debt like credit card debt and even your mortgage. Second, determine how much your loved ones will need on-going to pay for everyday expenses for a period of time to off-set the loss of your income. A simple way to determine that is to multiply your annual salary by the number of years you think your family will need on-going financial support. If you have young children, you will need to plan for additional childcare expenses that might occur as well as future post-secondary education costs. Third, review your existing income sources that your family could use to meet their financial needs (eg: surviving spouse’s income, savings & investments, and other life insurance policies). The difference between your family’s financial needs and the income sources in place to help your family meet those needs will help you determine the amount for additional life insurance coverage. Life insurance is an essential part of a sound financial plan. Feel free to contact me to help you determine your life insurance needs and provide solutions that help meet these needs.