Services
With our years of experience and education, we believe in providing our clients with optimal financial advice that includes a variety of valuable services to help meet their goals. Our team of professionals can help you create a well-thought-out strategy, using a variety of investments and insurance products and services, to help you address your financial needs and concerns.
A common and very practical option for drawing income from your RRSP accumulations is the RRIF. There are a number of advantages to RRIFs: You can employ a fairly large variety of income options.
What are they? Employee benefits, sometimes referred to as “benefits in kind,” “perks,” “incentives” or “fringe benefits,” consist of any grouping of non-wage compensation provided by employers to their employees.
Who will make decisions for you in the event that a prolonged mental disability prevents you from making them? With a power of attorney, you can assign those responsibilities to someone you trust.
The Canada Learning Bond (CLB) is a grant given by the Government of Canada to assist families to save for children’s education.
The Canada Education Savings Grant (CESG) is deposited to the RESP directly by the Government of Canada.
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The Canada Education Savings Grant (CESG) is deposited to the RESP directly by the Government of Canada.
Do you ever day dream of winning a big lottery jackpot? Smiling triumphantly on the 6:00 o’clock news, holding your four-foot-long personalized cardboard cheque with lots of zeros in one hand and five neon pink lazily floating,
Retirement income planning – RRIF's
A common and very practical option for drawing income from your RRSP accumulations is the RRIF. There are a number of advantages to RRIFs:
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You can employ a fairly large variety of income options.
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Within certain limits, you can change the amount of income you draw.
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When compared with an annuity, a RRIF offers significantly greater flexibility.
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Provided you understand that income tax will be withheld, you are able to draw lump sum amounts from a RRIF.
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Any balance remaining in the RRIF at your death can become a part of your estate.
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You are able to direct the investment of funds inside your RRIF account.
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RRIF payment schedule
Using the table below, you can calculate the minimum required RRIF withdrawal starting at age 69. For those RRIFs that were in existence in 1992, use the schedule designated “Qualifying RRIF.” For a RRIF account opened in 1993 or later, use the schedule designated “General schedule.”
Employee Benefit Plans
A common and very practical option for drawing income from your RRSP accumulations is the RRIF. There are a number of advantages to RRIFs:
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You can employ a fairly large variety of income options.
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Within certain limits, you can change the amount of income you draw.
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When compared with an annuity, a RRIF offers significantly greater flexibility.
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Provided you understand that income tax will be withheld, you are able to draw lump sum amounts from a RRIF.
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Any balance remaining in the RRIF at your death can become a part of your estate.
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You are able to direct the investment of funds inside your RRIF account.
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RRIF payment schedule
Using the table below, you can calculate the minimum required RRIF withdrawal starting at age 69. For those RRIFs that were in existence in 1992, use the schedule designated “Qualifying RRIF.” For a RRIF account opened in 1993 or later, use the schedule designated “General schedule.”
Disability income planning – Powers of Attorney
Who will make decisions for you in the event that a prolonged mental disability prevents you from making them? With a power of attorney, you can assign those responsibilities to someone you trust will act as you would have. Without a power of attorney you effectively leave the decision making to the courts.
Obviously, you need to have the power of attorney written when you are mentally capable of making that first, all important decision. If you do not have a power of attorney as you read this, the time to act is now.
A power of attorney is a legal document. There are two different types:
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A power of attorney for personal care deals with personal and health care. Also known as a “living will” the power of attorney for personal care allows you to express your wishes as to how you should be treated in the event you should become incapacitated. You can deal with such areas as life support, pain management in the event of terminal illness, when life should be terminated, etc. If the power of attorney is absent, delays in medical treatments can occur and the final decisions may well be left to the courts to make.
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A power of attorney that deals with your financial affairs is known as a “power of attorney for property.” With a power of attorney for property you empower a trusted person to make legal and financial decisions on your behalf. This type can be made on a limited basis – limited to certain types of assets; it can be a permanent, indefinite in terms of time or a temporary. The document can provide all encompassing control over your affairs, can be effective the moment you sign it or can be effective upon certain circumstances occurring.
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An enduring power of attorney, accepted by most provinces, means that your affairs can continue to be managed even if you are mentally incapacitated without your intervention or your supervision during times when your input would be most needed. In all cases, the authority you provide by a power of attorney ends with your death.
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And that, of course, is an event that will trigger the use of your will.
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The above comments are not to be interpreted as legal advice. Like your will, the power of attorney is an important document that should be prepared with the assistance of professional legal advice.
Canada Education Savings Grant (CESG)
The Canada Education Savings Grant (CESG) is deposited to the RESP directly by the Government of Canada. The amount that will be deposited is as follows:
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While you may contribute any amount to the RESP in any given year (subject to the lifetime maximum of $50,000), the government will contribute 20% or $500 on the first $2,500 contributed to the RESP in any year.
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Note, however that if the subscriber’s total net family income is less than $37,885 annually, the first $500 deposited will receive a grant of 40% or $200. The balance of your deposit up to $2,000 will receive a grant of 20% or $400. Thus, the total grant will be $600.
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If the subscriber’s income is greater than $37,885 but less than $75,769, the first $500 deposited will receive a grant of 30% or $150. The balance of the deposit up to $2,000 will receive a grant of 20% or $400 for a total of $550.
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If the subscriber’s income is greater than $70,000, then the basic 20% on the first $2,500 will apply or, $500.
Maximum deposits
The maximum CESG for a year is $1,000 if there is unused grant room. The maximum lifetime CESG limit is $7,200 which means that if you qualify for grants of only 20% of contributions, you will reach the maximum CESG once you have contributed $36,000 of eligible contributions. Note that in this case, “lifetime” means from birth up to the end of the year in which the child turns 17 years of age.
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If the child does not continue his/her education past high school, or does not use the whole CESG credited to the RESP account
The unused CESG must be returned to the government.
Canada Learning Bond (CLB)
The Canada Learning Bond (CLB) is a grant given by the Government of Canada to assist families to save for children’s education.
The grant will consist of $500 deposited into the RESP in the 1st year, plus $25 to help cover the cost of opening an RESP, and an additional $100 each year following up to the child’s age 15, provided:
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The child was born after December 31, 2003 and,
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The parent receives the National Child Benefit Supplement (NCBS) – generally for families with net annual family income below $37,885.
Registered Education Savings Plans (RESP's)
The rising costs of education make such plans as the Registered Education Savings Plans (RESP), in combination with the Canada Education Savings Grant (CESG), and their tax advantaged nature a must for most parents to consider for their children.
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Funds accumulated in an RESP will grow tax-free and can be used to finance any post-secondary education the student wishes to engage in. This includes the costs of tuition, books and supplies, room and board, travel, etc. – anything that is education related – whether it be at a community college, trade school or university.
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Following are some terms that you should be familiar with when investing in your children’s education using an RESP:
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The subscriber: The subscriber is the person who opens the RESP. The subscriber may be a parent, grandparent or other relative or friend.
The beneficiary: The beneficiary is or are the children named in the plan who will benefit from the accumulated funds in the RESP after completing high school in the form of Education Assistance Payments.
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Education Assistance Payments (EAP): The payments made to the child, who having finished high school, uses the funds to continue his or her education.
Three types of RESPs
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Family plans: You can name one or more children as beneficiaries of the RESP but they must all be related to you. They may be your children, adopted children, grandchildren or nieces or nephews. With the family plan, you will want all or any one of the children named in the plan to receive benefits and you will also want to decide, either on your own or with the assistance of a financial advisor how the money is to be invested.
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Individual plans: The individual plan benefits one beneficiary who may or may not be related to you.
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Group plans: You may be able to participate in a group plan through your employer in which you name your own beneficiary(ies).
Qualifying educational programs
A qualifying educational program is any course of study that lasts at least 3 consecutive weeks with at least 10 hours of instruction or work each week. A program offered by a foreign educational institution must last at least 13 weeks.
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Qualifying educational programs include apprenticeships, programs offered by trade schools, CEGEP (in Quebec), colleges or universities.
RESP funds can be used for full or part-time study in a qualifying program.
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Maximum contribution per beneficiary
The maximum contribution that may be made to an RESP for each beneficiary is $50,000. This limit will include all RESPs opened for each of the beneficiaries.
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What happens if the beneficiary does not continue education after high-school?
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You might wait a period of time to see if the beneficiary later decides to enroll in a qualifying program.
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You might use the funds accumulated for a sibling who does continue his/her education after high school.
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You might transfer the funds accumulated in the RESP to help grow your own retirement funds. This will not include either the Canada Learning Bond (CLB) or the Canada Education Savings Grant (CESG), both of which must be returned to the government.
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You could withdraw your personal contributions, tax-free.
Budget Counselling and Planning
Do you ever day dream of winning a big lottery jackpot? Smiling triumphantly on the 6 o’clock news, holding your four-foot-long personalized cardboard cheque with lots of zeros? Hmm, wouldn’t that be a perfect quick-ticket solution to our money problems?
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Reality into resolve
We certainly weren’t born knowing how to manage our money. Sadly, many families still won’t even talk about such matters at home. And in school, at least when I was growing up, financial fitness was never taught there either. So, what are you to do?
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Forget all excuses and stop dreaming of a big lottery win – especially if you are experiencing trouble in the here and now. Call us and let’s take action together instead!
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Budget planning
Budget planning can allow you to take control of your finances by determining where your money is going, why you may be in debt, and teaching you how to deal with the problem. As corny as it may sound, budgeting really is the key to unlocking your financial success. And contrary to what you may think now, it’s not all about drum-tight restrictions on your fun or where you’re spending your money. It’s really about knowledge and empowerment… and hey baby, you deserve that!
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Imagine being in the driver’s seat in a world where you don’t worry about paying the bills, saving for retirement, or providing for your family because you have a plan and you know everything is in order. Security and peace of mind, not to mention freedom of choice – what’s wrong with any of that, pray tell?
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Emergency fund
Have you ever been broad-sided by major car or home repairs, unexpected dental bills, or worse – job loss? Of course you have! We all have!! That’s life. Bad stuff happens to good people, like us. Start an emergency fund today, even if you can only save $10 a month and you think you are living paycheque to paycheque – just do it! Then, hold on to that money… no matter what! It is not your mad money fund or your, “I deserve a new purse/big screen tv fund.” Resist all such temptations. The next disaster is surely coming. Don’t whine later on and say, “I was doing fine until….”
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Start saving an emergency fund now. This is the best way to prepare for the inevitable bumps along the road of life and avoid being forced to rely on credit cards which can compound your problems overall.
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Debt management
Did you know that over 74.5 million Visas and MasterCards are in circulation in Canada today?2 Yikes! Although we all readily embrace the convenience and flexibility offered by our credit card’s “short-term” loan, it’s also true that they can pose a great, big, heaping helping of temptation to those of us who have difficulty with the practice of delayed gratification.
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Here is some good advice for dealing with debt:
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Pay your balance off in full sooner than later and avoid high interest fees.
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If you can’t pay the balance in full before the monthly due date and you have to carry a balance, don’t use a credit card. Apply for a much lower line of credit or personal loan from your financial institution instead.
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If you must carry a balance on your credit card, pay a little more than the minimum monthly amount required plus the month’s interest to reduce the overall period of indebtedness and interest accrual.
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Don’t treat your cards like extra cash in your pocket – borrowed money is not the same thing as earned income.
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If you owe money on several credit cards, use a snowball approach to motivate yourself with small victories of debt reduction by paying off the card that has the smallest balance first and then move on to the next smallest and so on – just don’t ignore any of your other outstanding card balances while you’re doing this. You may be surprised how quickly a snowball can extinguish your debt fire.
The big payoff
Now, if you really want to WIN BIG, consider taking the $10 a week you spend on lottery tickets and invest it instead. You could have $100,314.56 after 35 years (earning an 8% return) or $166,742.59 (if you were earning a 10% return). And if you increased your weekly investment to $12 at a 10% return, you could squirrel away $200,091.10 after 35 years.
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What can Latimer Financial do about it?
Call us today and we will work with you to:
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create a realistic budget
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explore options to deal with debt
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avoid spending extra hundreds or even thousands in interest costs
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manage all of your bills and living expenses.