When you hear the words free, you think there must be a catch like the adage “There’s no free lunch”. I once attended a business meeting with the same title and the lunch was free. Years later I have discovered there is a price to pay for most things in life that are free, there is always some commitment required.
Now when we hear the words “Tax Free” that conjures up thoughts of something we should taking advantage of or something that will be all ours no share to the government, most of us will want to hear more. Continue reading
Seven Great Reasons to Invest using RRSPs
It’s that time of year financial organizations call RRSP season, its nothing to do with the weather or the flu.
What is an RRSP? The letters stand for Registered Retirement Savings Plan.
Why does it exist? It was established as an incentive from the federal government for individuals to save for their own retirement, whereby contributions to their plans are exempt from income tax and the money contributed to the plan can grow tax sheltered until withdrawn usually at retirement.
How do I buy one? Most plans are sold by Banks and Insurance Companies, when a plan is first opened it is set up as an RRSP with the Government so they know not to tax you on the interest or growth. If it’s not registered then you would be taxed on the interest or growth in the plan.
How much can you contribute? For 2013 the maximum is $23820 or 18% of your income whichever is less. You can also contribute amounts from previous year. See your accountant. If you don’t have one I can refer you to one.
Here are 7 reasons to buy an RRSP
- The money you contribute to your RRSP comes right off your taxable income, depending on your tax bracket and the way the plan is set up you could expect to save around $300 to $400 for every $1000 you contribute.
- The money you contribute grows tax deferred; all the investment return or interest is not taxable until you begin to withdraw the money, likely at retirement when you are in a lower tax bracket.
- The money you accumulate can help you retire sooner or will enhance your retirement by giving you the freedom to do the things you want.
- If you have a spouse who is not earning an income or will not have a pension you can put the money in their name and you claim the tax break on your tax return. That’s called a spousal RRSP. That may work out better tax wise when you begin to withdraw the funds at retirement because there are 2 personal tax exemption amounts, yours and your spouses.
- RRSP loans are available at low rates. An example: you are in a 35% tax bracket you borrow $5000 between January and the end of February and invest it in your RRSP. Since all your taxes are paid for 2013 and assuming you paid the exact amount of tax required then you should be expecting a rebate of $1750. Let’s say you take the rebate and immediately pay it off your $5000 loan, the balance you owe would be $3250 plus interest but you would have $5000 saved.
- I have plans and options available to suit your needs for an RRSP. Guaranteed plans such as GICs, and Investment plans for such as Segregated Funds and other investments.
- If you have no money and good credit you can borrow to pay yourself. I can arrange an RRSP loan through many of the companies I deal with.
Do you have a business partner?
If you have a partner, chances are you each have skill sets that compliment each other. For example, you may be focused on the marketing and your partner may run the financial side of your business.
What if you lose your partner?
Assuming your business is incorporated; ask yourself these two questions:
1/ What happens to my partner’s share of the business if he/she dies?
2/ Will I be working with my partner’s spouse as a result of their death?
You may want to be able to buy your partner’s stake in the company and become the sole owner in the event of their death. However, your partner’s heirs may not want to sell at the price you offer and the negotiation could drag on while the profits are shared. This can slow your business down to a crawl. Continue reading
Disability Insurance: Is it worth it?
Do you need to have it? Will you ever need Disability Income?
No, you don’t to have to own Disability Insurance; that’s your choice. Maybe you will never need disability income in your working life. You can take your chances.
But, what if you became disabled and were unable to work? Ask yourself, where will the money come from to meet you and your family’s lifestyle requirements?
Disability Insurance can provide income if you became disabled due to an accident or sickness.
Some plans cover accident only and others cover accident and sickness.
In most cases the income is Tax Free.
Having a plan in place gives one an element of security against a sudden change in health or an accident that shuts down your ability to earn an income.
We all know someone who has been disabled. When ones health is severely affected nothing else matters but creditors still need to be paid. So does the car payment, the mortgage, the heat, the hydro and the cable package which includes the internet and phone.
There are many different types of policies available.
How much do you qualify for? How much do you need? How much can you afford? Continue reading
Here are a couple of Tips on GICs….
- G I C stands for Guaranteed Investment Certificate, they provide a guaranteed rate of return for a certain period of time i.e. 1, 2, 3, 4,or 5 years or periods of years and months combined.
- You can purchase a GIC at Banks, Credit Union and Insurance companies.
- Back in the early 1980s 5 year Interest rates were over 20% – a lump sum invested would double in 3.6 years.. Wow!
- Today a 5 year plan pays around 2.5% – interest, that means money would take 28.8 years to double, I cannot wait that long !! Can you?
- Did I mention….. the interest is fully taxable if it’s not registered as an RRSP or in TFSA?
Jim has been a financial advisor with Geddis Financial Services since 1985.
He will advise you on insurance and investing to help you make sense of your money.
Jim has been advising clients on a one-to-one basis during the past 28 years. He has also been on the management side of financial services with Sun Life and London Life. He has worked in the area of hiring and recruiting individuals who were interested in a career in financial services.
Jim is Past President and currently an active member of Sunrise Success BNI Networking Group in London, Ontario.
Jim is a part-time Instructor at Westervelt Business College teaching various Adult Learning Courses including Sales and Marketing, Sales Management, Marketing, Advertising, and Negotiations.
Jim has many satisfied customers who have endorsed him:
“Jim is incredibly knowledgeable and personable. His ability to network and sell himself and others in the community make him and excellent contact for any business person. Jim’s knowledge of insurance make him an excellent person to trust your insurance needs to. I would highly recommend Jim to any business person or individual in need of insurance.”
Matt Bergmann, Director of Accounts and Strategy at Link Advertising Inc.
“Jim has been taking care of my Insurance needs for several years now. he Continue reading
1/ Insurance – Get the best! As an insurance broker, I can shop the market for life insurance, disability insurance, critical illness insurance and find you the best company with the best price. This is a great way to purchase a good insurance product at a great price.
2/ Save – Start Now! Take steps now to save toward retirement. Put something away. Something is always better than nothing, no matter how small it is. When you reach retirement you’re going to receive the biggest pay cut of your life. That could be a 50 or 60 per cent pay cut. So you need to Continue reading