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Greetings!
We will continue mailing out a hard copy of our quarterly newsletter to you, but during the "off months" or when urgent matters arise we will be providing you with a brief e-Newsletter to bring you up to speed with a few news items for the month. Be sure to take a quick glance at these e-Newsletters, and as always, should you have any questions or comments, please feel free to call me at 604.468.0888 or drop me an email at hperler@perlerfinancial.com Also note, in addition to our firm's corporate website, be sure to visit my new personal
website; www.harryperler.com. There you will find "LATEST NEWS" and "ARTICLES OF INTEREST" updated regularly; items which I have personally
selected and feel you will benefit by reading. Read on!
Other storiesRecent Changes to CPP...
Certain changes were enacted to the Canada Pension Plan (CPP) on December 15, 2009.
In brief, the CPP was amended to:
(i) allow a person to take their retirement pension as early as age 60 without the requirement of a work interruption or earnings reduction, beginning in 2012
(ii) allow almost seven and a half years of low or zero earnings to be dropped from the contributory period because of the increase in the general drop out from 15% to 16% in 2012, and to 17% in 2014 (which would allow a maximum of eight years to be dropped),
(iii) require a contribution to the CPP from persons under the age of 65 who receive a retirement pension and continue working, thereby creating eligibility for a post-retirement benefit,
(iv) permit a person aged 65 to 70 who receives a retirement pension to elect not to contribute to the Canada Pension Plan, and
(v) have the adjustment factors that apply to early or late take-up of retirement pensions fixed by regulation after December 31, 2010 (Minister of Finance and ministers of the included provinces to review).
Additional information may be obtained from the Department of Finance website: http://www.fin.gc.ca/n08/09-051-eng.asp
(Notes provided by Standard Life)
The Importance of Financial Advice
You want to ensure that your retirement years are as fulfilling and stress free as possible. Having a solid understanding of your finances will be an important part of minimizing stress. The investment landscape can appear very confusing and intimidating with dozens of different investments and approaches available. Understanding your current situation and expectations for the future are critical in creating and maintaining a successful financial plan. Your relationship with your financial advisor is an important step in creating a financial strategy that works for you.
Consolidating your investments
You may hold some investments with other financial institutions. The problem with this approach at this time of your life is coordinating the different investments. An effective financial plan (especially when it comes to taking income out of your investments) requires looking at all your assets in total. Without this overall approach, you cannot accurately determine if the plan is correctly structured for your individual needs. There are specific income layering techniques your advisor can suggest to maintain tax credits, avoid clawbacks of benefits and reduce taxes. It is crucial that you consolidate your investments in one place with your primary financial advisor. By doing this you and your advisor can confidently plan and monitor your financial situation. You should also be able to rely on your advisor to call in any specialists to deal with particular issues. This could be tax
specialists, estate lawyers, insurance specialists, etc.
Keeping the tax bill down
As at any time in your life (and death), tax is a constant issue. The tax system in Canada is complex and becoming even more so as time goes on. While no one likes paying tax, most of us appreciate that it is necessary but we certainly want to pay as little as possible while still playing by the rules. Your financial advisor can assist you in structuring your investments in a way that is most beneficial in reducing tax. For example, there are ways to split your income with your spouse which results in an overall lower tax payment. Or, if you have a mixture of registered and non-registered savings there are tax-efficient ways to draw on those funds. Depending on your situation, there may be other techniques to structure your affairs in a tax-efficient way prompting your advisor to call in a tax specialist to analyze your needs. Again, these strategies can only be effective if all your
assets are consolidated with one advisor.
Resources are from Dynamic Funds: The Snapshots series captures different stages in life and gives you a glimpse of what might be an important part of your financial picture at the time.
Visit: http://www.dynamic.ca/eng/snapshots/
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