“There are no guarantees in Life”

Although you have probably heard it said before, “There are no guarantees in Life,” that statement is not entirely accurate. Most people are aware that “Death & Taxes” are two things that you will encounter in your life but here are a few more that many people don’t take the time to consider.

1. Taxes
2. Disability
3. Critical Illness
4. Death of a loved one
5. Job change
6. Retirement
7. Death

All of the above are major events that can impact your daily life and its trajectory and therefore demands serious thought. You can start this process by asking yourself a few of the following questions.

What do I want to happen if:

1. I sold my property? Would there be any Capital gains to deal with?
2. I got injured on the job and could no longer work?
3. I had a heart attack or suffered a stroke?
4. I am diagnosed with Cancer?
5. I lost my spouse in an accident?
6. I could no longer take care of myself?
7. I die? Who would look after my wife or kids?

These are all hard questions to ask but they are necessary if we want peace of mind. I know that a lot of you don’t want to think about these things because they are not the most enjoyable conversations to have, but they are important none the less. Nobody wants to experience these things, but the reality is that we will at some time down the road.

It is better to plan ahead and have the coverage you need when these things happen. So the only question now is what are you willing to do now to ensure you and your family have peace of mind?

Looking for more information about how to protect your family? Check out these helpful guides or give me a call to discuss putting together a protection plan.

What if you retired today?

I am writing this blog today because I believe that most Ontarians don’t know what they will face in retirement. I also believe that as a professional in the financial industry it is my duty to provide a wakeup call.

According to a recent study up to 50 percent of households are not saving enough to maintain their standard of living even when home equity is taken into account. I am not sure if this is because they believe that the government benefits will take care of them or not. So for those who are unaware or simply don’t know I will break down what would happen if you retired today with no savings.

First I would like to start by quoting the baseline for poverty in Ontario 2015, which for a single adult would be $19,930.00 ($1660.00/per month).

Now let look at the average benefits provided by the government:

CPP average: $640.23/month

OAS Average: $569.95/month

Combined this is a monthly income of $1,210.18.month or $14,522.16/year, as you can see this is $5,407.84 short of the poverty line. Now I would like to stop here and point out that this calculation also does not take into account that taxes still have to be deducted from these amounts.

But let’s move on. There is also another benefit called the Guaranteed Income Supplement (GIS) and depending on your income, if you were single you can apply for up to a maximum of $772.83/month. This would provide an additional $9,273.96/year. This brings the grand total to $23,796.12/year before taxes or $1,983.01/month.

Pretty good, right? Wrong!

The average rent in Ontario runs from $518.00 - $896.00/month or average $707.00/month

The average house hold grocery bill in Canada is $7,980 (2013 figure) or $665.00/month

The total together is $1,372.00/month, leaving $611.01/month.

Pretty good, right? Wrong!

You forgot about the taxes you have to pay, which in Ontario is Federal 15% and provincial 5.05%. So let’s run the numbers.

$23,796.12 x 20.05% = $4,771.12 which will leave you with $19,025.00/year or $1,585.41.

So taking our rent and food into consideration again $1,585.41-$1,372.00 leaves us a grand total of $213.41/month for any other expenses you might have. Now let’s take it a little further and say that you like to get around and need a monthly TTC Metro pass which costs $141.50/month, are new total is $71.91/month.

As you can see from the numbers solely relying on government benefits is not going to cut it for most people. According to statistics the average annual retiree income should be between $40,000.00 and $42,000.00 in order to live comfortably. This by the way also assumes that you will be healthy and able to take care of yourself after retirement and for a lot of us that will not be the case.

To discuss more about investments or retirement goals give me a call.

  www.protectingwhatmattersmost.com.

Edgar Schuchardt

416-806-5813

Women need to be part of the Conversation.

Yesterday I was speaking with a lady; will call her Mary for the sake of this article, that lost her husband about 4 or 5 years ago and she was telling me about how difficult it had been over the last few years. Mary mentioned that she had to sell her home and move into much smaller one all the while trying to pick up the financial pieces that she had no idea about.

When I asked Mary about life insurance she mentioned that the policies were cashed in about 2 years before her husband got sick and that she really didn’t have a choice in the matter. Her husband also ran a business so I am not sure what exactly the reasoning behind this was, but I can say that it probably happened without much guidance or advice.

Now I am not sure if this was strictly a cultural thing, but I do know that many households today still see the man as the bread winner and the sole person responsible for the financial well being of the family.

This mentality is wrong!

Finances are the number one reason that married couples get divorced over, so it is very important to have an open, transparent and accountable mindset. Not only that but if one of you gets injured, has an accident or is temporarily hospitalized it is always a good idea to have both parties know where all the money comes from and goes to.

Both men and women bring different aspects to the table when it comes to finances and different approaches which should complement each other. Compromise on money issues is very important and a healthy way to approach life.

Take Mary for example, she was excluded from all financial decisions and did not know what was coming in or going out. This was further complicated by the fact that her husband was also running a business. It took her 5 years for her to figure everything out, but I have to ask, what fell through the cracks in the meantime? How much greater did their debts grow during the time that she was unaware?

This is way I believe that women should be part of the conversation, especially if we are talking about a one income family. Here are some tips that will help you get started.

1. Make a list of all assets and liabilities.
2. Come up with a budget and strategy to pay off any outstanding debts.
3. Review your insurance coverage to make sure that if one of you is unable to work or passes away that the debts will be covered as well as the lost income.
4. Get joint bank accounts, so that when someone is unable to do transactions the other can act on the family’s behalf.
5. Put into place a will and power of attorney.
6. Ensure that all of the assets have an assigned beneficiary.
7. Invest together, if you can’t explain the benefits of an investment to the other than you should not be involved with it.
8. Encourage one another when you reach milestones and celebrate.
9. Teach your children early about handling money and show them that in the future they too will need to do the same as you.
10. Be informed, you work hard for your money so make sure that you educate yourself about the different investments and risks with any vehicle.

To get a head start on this process today, download this virtual shoe box designed to help you to keep track of your important personal and family documents – everything from insurance policies, bank accounts, investments and mortgages to health records and will and estate information.

To learn more about insurance or to get helpful information and guides visit.

  www.protectingwhatmattersmost.com.

Edgar Schuchardt

416-806-5813

What you don't know about GICs.

I don’t know about you but I am always on the lookout for deals. I have a rule; if I am pulling out my wallet to pay for something, I better be paying less than list price. Anyone who knows me, knows I negotiate everything. After all I work hard for my money, why should it not in turn work hard for me?

Why just this morning I was at Esso and noticed a Christmas promotion that they are having. Buy a gift certificate and get a discount card which will give you a $0.05/litre discount up to 200 litres, I bought two and will probably buy more, after all I need gas so why not give myself a discount?

Back to the topic at hand; GICs, I am sure that you are all aware of what a GIC is. But did you know that where you buy them from can give you added benefits?

Canadians usually buy GICs at Banks or Trust companies, but did you know thatInsurance companies also offer them and that they have benefits that others don’t? I have listed the similarities and differences for you below.

What you already know:

• GICs have a guaranteed interest rate.
• GICs have a set term (duration).
• GICs guarantee you will get your money back.*

*Your money is safe in GICs protected up to a $100,000.00 limit even if the financial institution fails.

What you don’t know (about Insurance GICs):

• Interest qualifies for the $2,000.00 pension Income Tax Credit.
• Insurance GICs are available in longer terms than most banking institutions.
• Insurance GICs allow you to name a beneficiary.
• Insurance GICs are not subject to probate.
• Insurance GICs are protected from creditors. **

**In some circumstances and in some provinces.

To learn more about the insurance GICs or to get helpful information and guides visit.

  www.protectingwhatmattersmost.com.

Edgar Schuchardt

416-806-5813

RRSP or TFSAs?

Before asking yourself which account should I invest in? You have to ask is there more to consider than paying taxes now or later? 

With an RRSP, although you get a tax break in the same fiscal year you still have to pay taxes on it when withdrawn.

If you choose instead to invest in a TFSA, the actual amount you get to invest will be less (Income earned - taxes). But here is the catch, no matter when you take money out it is tax free. It also does not count as income if you decide to take it out when you are retired, which means no claw backs on government benefits. Also even if you do take it out before retirement you always have the option to put it back the following year making it more flexible than an RRSP.

Unlike the TFSA, if you take out funds from an RRSP prior to retirement you lose the contribution room it never comes back and it will be added as taxable income that same year. If on the other hand you wait until you retire, the money withdrawn is still taxable and also counts as income. And if it is coming out of anRRIF, there are minimum withdrawals mandated by the government which could mean government claw backs.

The TFSA on the other hand can continue compounding without any government interference and you can withdrawal as little or as much as you like. 

If your like me than running the numbers is the best way to see what option works best for you. Should you like some assistance with this process let me know I would be happy to help. I personally believe that TFSAs kill RRSPs when it comes to retirement investing and here are my top 10 reasons why.

To learn more about your options download one of these free guides.

Or visit www.protectingwhatmattersmost.com

Do you have a Bucket List?

I am sure that just like me you have seen the movie called the bucket list with Morgan Freeman and Jack Nicholson. Both are great actors, the problem however is that although I enjoyed the movie I know it was a total work of fiction. 

In the movie the two main characters survive their treatments for their individual Cancers and proceed to create together a buck list of things that they want to do before they kick the bucket. It is very romantic, although both of them are men. There is a kind of celebration of life with each item crossed off their list. There is camaraderie and a bonding of the two men who share the same condition. 

But in reality it is not that glamorous. Few have the millions it takes to fly around the world and see exotic destinations like these two. Never mind that the movie fails to mention the true condition of those undergoing or having Cancer treatments. 

I have seen the real thing. Not once, not twice but now up to five times.

 These have been people close to me within my family circle. Cancer has been stalking my friends, or at least that’s how it feels sometimes. 

May be this post is so raw because it’s early in the morning, may be I just can’t taking seeing those around me suffering anymore or maybe I have a new found respect and understanding of how precious life is since the passing of a grand parent. I think it’s a combination of all of the above. 

Most people who have Cancer experience fatigue, extreme weight loses, lack of appetite, the proliferation of the manifestation of external tumor growth and some never have the chance to leave the hospital. 

So why am I telling you all of this? Because I believe that your family will behave exactly like mine and rush to support of whoever is diagnosed with this terrible disease. Which leads me to the question of are you prepared, financially?

 Most aren’t, and this is where Critical Insurance becomes so valuable. It is a lump sum payment that can be used for anything; travel, time off work, experimental drugs, support workers and any other burden that you can think of. Once the individual is diagnosed with one of the covered illnesses for more than 30 days, the benefit is paid out. 

According to the Cancer Society of Canada

“An estimated 196,900 new cases of cancer and 78,000 deaths from cancer will occur in Canada in 2015. Prostate, lung, breast, and colorectal cancer account for the top 4 newly diagnosed cancers.

In 2015, an estimated 28,500 people will die of cancer in Ontario, and 76,000 new cases will be diagnosed.”

Based on 2010 figures

“2 out of 5 Canadians (45% of men and 42% of women) are expected to develop cancer during their lifetimes.

1 out of 4 Canadians (29% of men and 24% of women) is expected to die from cancer.”

The number that is really encouraging is the survival rate which is always going up due to new advancements in the field. The Society reports that,

“Based on 2006–2008 estimates, 63% of Canadians diagnosed with cancer are expected to survive for 5 years or more after a cancer diagnosis.”

And they vary depending on the type of cancer; as shown here

“The 5-year relative survival rate for lung cancer is low (17%).

 The 5-year relative survival rate for colorectal cancer is average (64%).

The 5-year relative survival rate is high for prostate cancer (96%) and breast cancer (88%).

So what does it all mean? Put simply more than ever before your chances of survival are good and I want you to come out the other side of your treatment whole, in mind, body, and financially. I don’t want you to eat into your retirement savings and I don’t want you to have to work a minute longer than you have to after undergoing a major illness. 

I want you to be able to fulfill your dreams and complete your own bucket list.Here are my top 10. 

1. Visit my Omama’s homeland of Riga Latvia.
2. See the pyramids in Egypt.
3. Travel across Canada
4. Experience another Olympics.
5. Own a restaurant.
6. Live on a self-sustaining farm.
7. Celebrate my 25th Wedding Anniversary.
8. Write a book.
9. Leave a legacy.

10. Have time to draw and paint again

To learn more about the advantages of dealing with a broker or to get helpful information and guides visit.

  www.protectingwhatmattersmost.com.

Edgar Schuchardt

416-806-5813