Monthly Archives: June 2017

TFSA Estate Planning options

Posted By Marie Engen | June 21, 2017

The TFSA (Tax Free Savings Account) has become a popular saving and investment vehicle for many Canadians. It has also potentially become a significant portion of retirement savings.

When TFSAs were first introduced I thought they were pretty straightforward. However, we still get lots of questions, and Gordon Pape wrote an entire book about them (The Ultimate TFSA Guide), so there’s still some confusion.

A lot has been written about how to invest within a TFSA, but what happens to these funds when the planholder dies? The amount in the account at the date of death is tax free: then it depends on who the funds are given to.

Estate Planning For Your TFSA

There are three different estate planning options for your TFSA:

Appoint a successor holder
Designate a beneficiary
Assign the funds to the estate

Successor holder

Only a spouse or common-law partner can be appointed successor holder.

Estate Planning: Half of us STILL lack Wills

Posted By Financial Independence Hub | June 20, 2017

By Rowena Chan, TD Wealth

Special to the Financial Independence Hub

Creating a will can be an emotional experience, but it’s an important step in ensuring peace of mind for you and for your loved ones. According to our recent survey, it was surprising to learn that half of Canadians do not have a will, a crucial step in allocating assets after death.

Moreover, more than a quarter (28%) of Canadians without a will are between the ages of 53 and 71. Even more concerning is the stat that 39% of boomers have not even discussed estate planning wishes with their children.

The risks of not having a will are two-fold: first, the government can intervene and distribute your assets which could mean that your wishes are not fulfilled; and second, not having a will can create unnecessary conflict and animosity among members of the family during an already difficult time.

The survey found that one in five Canadians (19%) who received a family inheritance say they experienced conflict with their siblings and other relatives over the division of those assets, with two in five (41%) saying they considered taking a smaller share of the inheritance to maintain family harmony.

Although some may believe estate planning is only necessary for those with significant financial assets, the truth is that it is essential for everyone, regardless of the total value of assets. To help manage your estate and avoid potential tax implications and family conflicts, we offer the following tips:

Personal property

Items like the family home, summer cottage or jewelry are all considered property assets, regardless of what they’re worth. A professional appraisal is an important starting point for valuing these assets. Once you understand the dollar value, you can get a sense of how to distribute them among your loved ones.

Do you need to “De-FANG” your portfolio of giant US tech stocks?

Posted By Jonathan Chevreau | June 19, 2017

Do you need to De-FANG your portfolio or are you so focused on Canada that you’re actually underweight on the big US tech stocks?

My latest MoneySense column looks at the post-Trump surge in tech stocks and the more recent retrenchment in the sector. For the full article, click on the highlighted text here: Do you need to de-FANG your portfolio.

FANG is of course the famous acronym created by Mad Money’s Jim Cramer and stands for Facebook, Amazon, Netflix and Google.

But as the piece goes into in some detail, and per the image above, there are alternative acronyms that include Apple and Microsoft, although not IBM (despite the graphic above).

The question is whether so-called “Couch Potato” type investors who use the MoneySense ETF All-stars already have sufficient technology exposure to participate in the expected long-term growth of technology and particularly Internet giants like Google, Facebook, Amazon and the like. Certainly after last week’s big announcement that Amazon seeks to acquire Whole Foods, this question is increasingly relevant.

As you’ll see, broad-based ETFs tracking the S&P500 index already have significant tech exposure: roughly a third in these names. Less so for global ETFs exposed to firms outside North America, although these too have healthy exposure to the sector.

Canadian-centric investors woefully underweight technology

How to set long- and short-term financial goals

Posted By Financial Independence Hub | June 19, 2017

By Angela Baker

Finances are always problematic, and everyone struggles to find balance in this field.

At the beginning of our professional careers, we are on a tight budget with little perspective for any progress. As time passes, our financial goals get higher and desires may seem unrealistic. There are many ways to plan finances and to set long-term and short-term financial goals. Below, we will try to explain steps for success in this activity.

Define goals and objectives

If you decided to set financial goals, start with clear contemplation about what you need and how you will achieve that. This is the first and most important step. Decide how much money you want to possess each day, month or year. Then after you have determined the amount, start to plan the way for realizing the financial goal.

This may include a new activity like running a website, opening a store, renting houses or finding a well-paid job. No matter what is it, you need a lot of planning and counting. Also, you must research a lot, listen to advice from friends, people around you, and acquaintances. Only with fully-planned action will you be on the way to achieve short- and long-term financial goals.

Identify your financial requirements

The second strategy in setting your financial objectives includes identifying personal needs about money. Everyone spends a certain amount of money daily for basic needs as food, car, hygiene, or meetings with friends. If you live alone, it will be easier to recognize personal requirements because we all know our own needs. Otherwise, if you have a big family and have to maintain all of them, it will cost you days to count how much money you need. Also, you should not leave out extra spending for a holiday, services in the house, clothes, etc. The final list could make you scared or nervous, but you must face it.

Improve your saving habits

Millennial Money: How I deal with my Financial Anxiety

Posted By Helen Chevreau | June 17, 2017

How do I deal with my Financial Anxiety? Other than “I don’t.”

As a ‘mature student’ and a Millennial I find myself really struggling to maintain any sort of enviable lifestyle on a basically non-existent budget. At 25, it feels beyond embarrassing to still be relying on my parents, especially after having had a 1-year contract (in Hong Kong) which kept me self-sufficient. Though it has felt at times like a back-track, I know that in the long run this step back into financial dependence will be worth it.

In discussions with some of my friends, it became clear that I was in no way alone in feeling a little lost and hopeless in the finances department. It has been said time and time again that as millennials, we are meant to be discovering our passions and taking risks with our careers, but clearly all of this does little to dissuade those of us in the midst of these struggles from feeling as if we’re doing something terribly wrong.

Stop comparing yourself to your peers

How am I meant to reconcile these feelings with the facts I know to be true ( it’s just temporary! As soon as you’re finished school you’ll feel so much better about your finances)? One of my closest friends had some helpful words when I came to her with how I was feeling: You have to stop comparing yourself to people around you.

I’m sure that response has elicited at least one “duh!” from this audience, and even I myself am well aware of this simple truth. It is, however, a different thing to actually put into practice.

We’re at the age now where half of us are well into our careers, purchasing first homes, getting married, and even starting to have children. Meanwhile the other half (the camp I fall into) are running around like chickens with our heads cut off trying to find one stable thing in our lives to grab hold of to keep us steady. Continue Reading…

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