Participating In Your Life Insurance – A Good Investment?

Life insurance is a vital and necessary part of every financial plan. But there are a whole lot of life insurance types and products out there – so making the decision about what’s right for your personal situation, budget and longer-term financial and retirement goals can be difficult.
In this column, we will focus on one type of insurance that you should consider if your needs and wants match this profile:

• You have a low to moderate tolerance for risk.

• You want protection for a lifetime with guaranteed premiums, guaranteed cash values and tax-free benefits guaranteed for your beneficiaries.

• You want an investment component included with your insurance coverage providing the potential for tax-deferred growth without the need to manage those investments.

• You want to build tax-advantaged savings that you can draw upon as needed for personal or business needs (although any cash values withdrawn from such a policy may be subject to tax).

You can get all of these benefits and a few more from Participating Life Insurance or also known as PAR Whole Life.., Participating Insurance combines life insurance with an investment component that also pays dividends.
PAR Insurance works like this:

• Your premiums go into an account with the premiums from all the other policyholders holding a PAR policy with that life insurance company.

• The amount of your premiums and the other coverages in your policy are calculated using long-term assumptions for death claims, investment returns and other factors. Your guaranteed premium, values and death benefit are based on these factors and are guaranteed for the life of your policy.

• The pooled premiums from all policyholders are invested in a balanced portfolio managed by investment professionals.

• When the actual returns on these investments are greater than the assumptions in place for the life of the policy, there is an account surplus that is paid to policy owners in the form of dividends (although policy owner dividends are not guaranteed).

• Dividends have a cash value that is credited to your policy and owned by you. You can use the dividends to: increase the policy’s cash value on a tax-advantaged basis, to withdraw cash from your policy or borrow against it, to buy additional insurance without the need to prove your insurability, or to lower your out-of-pocket premiums.

PAR insurance products are available with many coverage and payment options. Your professional advisor can show you how to tailor your insurance coverage to meet your needs today and tomorrow.

Your Cottage And Keeping It In The Family

Ahh, your cottage – a place of sanctuary, family fun and warm memories. But passing along a cottage to the next generation can set off complex financial and family issues. Here are some suggested steps to ensuring cottage continuity.

Know what your kids want - You know that cottage ownership is a big personal and financial responsibility that is not for everyone. Discuss this with your children and if any of them are not interested in inheriting the cottage, avoid family squabbles by making sure they are treated fairly in your will.

If you decide on shared ownership, keep in mind that it can be a difficult proposition. That’s why it can be useful to obtain legal advice when you put an agreement in place – about such things as who uses the cottage and when, who pays for repairs, maintenance and upkeep, and the other nitty-gritty aspects of joint cottage ownership – to avoid protracted disputes and misunderstandings.

Manage the tax burden - If your cottage has appreciated in value, your estate can face a significant capital gains liability that could force its sale by your heirs.

Capital gains taxes are based on the difference between the cost of your property and its current fair market value at the time of your death. The cost of your cottage is what you initially paid for it plus the value of any capital improvements you made to it over the years – a new deck or roof, for example, including the cost of anyone you hired to do the work for you – so keep your receipts to account for all these costs to help offset capital gains. General upkeep costs such as painting the cottage are generally not considered capital improvements.

Consider taking advantage of the primary residence exemption. You are allowed to name a primary residence that is exempt from tax on capital gain. The residence must be a property you ‘ordinarily inhabited’. It can be either your city home or your cottage. You are allowed just one principal residence at a time but you can choose to exempt the property with the bigger gain.

Have a succession plan - Include an effective strategy for passing on your cottage. One option is to purchase life insurance with tax-free death benefits that will cover the capital gains on your cottage and/or other expenses and avoid the forced sale of estate assets. Life insurance is also a good way to equalize an estate where one child wants to keep the cottage, whereas other children would prefer to sell it and divide the proceeds of sale.

Some of these estate planning options may not work in your situation, so it’s a good idea to talk to your professional advisor about your wishes for your cottage and the financial and estate planning options that will work best for you.

Take Advantage Of Tax Savings With Universal Life Insurance

If you're a prudent Canadian, you likely already know the value of life insurance and have your own life insurance plans in place. You know that the primary reason for buying life insurance is to have the funds available to help pay final expenses, to help ensure you family's financial future, and to help ensure your legacy is passed on as you wish.

What you may not know is this: By selecting the right type of permanent life insurance policy, you can save on taxes and accumulate a cash reserve that builds through the years - a cash reserve that is readily accessible should you need a quick money infusion for any reason.

This type of permanent life insurance is called "Universal Life Insurance" and here's how it works:

• Unlike other types of insurance, Universal Life Insurance includes two distinct parts. Each payment you make is divided into an insurance premium and a deposit into an investment (or investments) of your choice.

• The growth in the investment portion of your policy is considered tax-deferred by the Canada Revenue Agency as long as it is not redeemed. For that reason, Universal Life Insurance investments tend to enjoy faster growth than most conventional, non-registered investments.

• Most Universal Life Insurance plans allow you to choose the amount of life insurance you want and to adjust the death benefit and premiums to fit your changing circumstances.

• Your death benefit – including the full value of your investment account – will be tax free to your beneficiaries.

• And, you can access the cash reserve in your Universal Life Insurance policy if needed to pay for unexpected expenses. You can do this by permanently withdrawing some or all of the cash reserve; through a loan secured against the cash reserve of the policy; or by using your policy as collateral for a line of credit.

A Universal Life Insurance policy can be a good option for people seeking financial security while accumulating additional funds for use in an emergency or to carry out certain aspects of their financial plan (such as developing sufficient income for retirement). It should also be considered a long-term investment because the return on the investment portion, combined with the tax savings, deliver the best results when left to grow over time.

If you want insurance and long-term, tax-deferred investment growth, Universal Life Insurance can be a good option for you. A professional advisor can help you select the right policy with the right combination of insurance amount and investments options that fit your personal risk tolerance and your overall financial and legacy goals.

Making The Tax-Free Savings Account Fit For Your Life

As of January, 2009, Canadians have a new tax-free option for saving – the Tax-Free Savings Account (TFSA). TFSAs are a flexible investment vehicle into which you can make non-deductible contributions (up to $5,000 per adult in 2009) that will grow and can be withdrawn without incurring taxation. Withdrawals can be made at any time for any purpose. Unused contribution room can be carried forward indefinitely and any amounts withdrawn in a year will be added back to your contribution room in the following year.

So, how you use your tax-free TFSA dollars is totally up to you. But it’s a good plan to ‘fit’ your TFSA investment uses to your life stage. Here are some tips.

Young adults and young families

• Save for emergencies and large short term expenses -- like a vehicle, vacation or home down payment without having to liquidate investments and paying taxes on the income.

• Save for a home – in addition to or in place of the RRSP Home Buyers Plan.

• Save for education – in addition to or in place of non-registered savings, the RRSP Lifelong Learning Plan or RESPs.

• Save for your children – as a parent, you retain control of TFSA funds and when to disburse them.

• Save to start a business – TFSAs are a tax-effective way to save the initial equity you need and can be used as security for bank financing.

• Save for retirement – in addition to your RRSP contributions.
  

Mature adults

• Save for emergencies, large short term expenses and retirement, in addition to RRSPs.

• Save your tax refund – contribute your RRSP tax refunds to your TFSA.
  

Retirees

• Save for emergencies and large short term expenses.

• Shelter excess income from future taxation – if your combined retirement income (from RRSPs, pension, OAS and CPP) is more than you need to live on, build up a non-taxable reserve in your TFSA.

• Build retirement savings after RRSPs – you can’t contribute to an RRSP after age 71, but you can still invest in your TFSA.

• Build a tax-free inheritance for children – a TFSA can be transferred to a surviving spouse/common-law partner without affecting their TFSA contribution room. On the death of the second spouse, the children may inherit the total amount tax-free.

Your professional advisor can help you make the most of your TFSAs and other investments, at every life stage.

When It Makes Sense To Borrow For Your RRSP

Wealthy people often borrow to invest. They call this 'leveraging' or 'leveraged investing' - but what it really boils down to is using someone else's money to make your own investments. You don't have to be rich to benefit from the value of 'leveraging'. In fact, you may be able to take advantage of a 'leveraging' strategy right now that could help you save on taxes and could increase your potential retirement income at the same time.

If you're like most Canadians, your Registered Retirement Savings Plans (RRSPs) will be an important source of income during your retirement years. And, if you're like most Canadians (a whopping 78 per cent in the 2003 tax year[1]), you probably have unused contribution room in your RRSPs. To make the most of the potential tax-saving and income-building advantages of your RRSPs, you should fill up every bit of your unused contribution room as quickly as you can - and leveraging can be an effective way to do just that.

Borrowing in order to contribute to your RRSPs could pay off in two ways: First, you'll increase the size of your tax refund and second, you'll have more money growing inside your tax-deferred retirement plan. Here's an example: assume that your RRSP contribution limit is $3,000 this tax year. (The actual amount of your RRSP contribution room is provided on the Notice of Assessment you received from the Canada Revenue Agency after filing your tax return last year.) Depending on your tax bracket, a $3,000 contribution could net you nearly $1,500 in tax savings at the time you file your tax return in the form of a larger tax refund, while also potentially adding $30,188 to your retirement plan over 30 years (on a pre-tax basis, at an annual compound rate of 8 per cent ). And, that's for just a single contribution of $3,000!

The government allows you to accumulate and carry forward all your unused RRSP contribution room from previous years back to 1991. You can make up the unused RRSP contribution room at any time, but sooner is better because you'll have more money growing on a tax-sheltered basis inside your RRSPs.

The issues to consider from a leveraging strategy are these: Borrowing at a low interest rate and paying off the loan quickly, otherwise the cost of borrowing can diminish your potential tax savings and investment returns. Financial institutions often offer RRSP loans (which are really loans meant only for the purpose of contributing to your RRSPs) at prime rate or lower. For top-up loans, limit the payback schedule to one or two years.

[1]The rate of return is used only to illustrate the effects of the compound growth rate and is not intended to reflect future values or returns on investments.

For larger loans, don't exceed five years. The leveraging strategy often works even better when you use your increased tax refund to repay the RRSP loan even faster.

Your professional advisor can help you map out an RRSP leveraging strategy that works best for you.

Giving While Living - Keeping It In The Family

You may be among the growing group who hope to pass on wealth to their children during their lifetime. A recent research study showed that the majority of Canadians (63 per cent) believe it's best to give children financial gifts while the giftor is alive.

The 'giving while living' trend has significant implications for tax and estate planning - and for your own lifestyle. That's why your first step toward making a 'giving while living' decision should be to take a critical look at your own finances. If you are certain your finances will allow you to make a gift, here are some other things to consider:

What should I give? The simplest answer is cash - but that may not be the best choice. When you give cash, you also give up any control over the amount you have gifted and you may not want to do that. One solution is to characterize your gift as a loan and take back a promissory note with appropriate security - that way, you can maintain a certain amount of control over the funds and the way they are used.

Another option is to give a 'non-cash' gift - maybe transferring stock to a child, or even the ownership of your family cottage - but, in that case, you will likely be triggering any unrealised capital gains. For example, if the gifted stock or cottage has appreciated significantly in value, most of that value will be subject to an immediate capital gains tax (currently the taxable amount is 50 per cent of the appreciated value).

Selling the 'gift' for $1 does not solve the tax problem and may, in fact, make it worse. When assets are given to someone 'at arm's length', the Canada Revenue Agency (CRA) deems that the donor received Fair Market Value (FMV) for the asset, no matter what it was sold for.

Should I put conditions on the gift? You can - some parents elect to 'gift' assets but only under certain clearly stated conditions. For example, you may want the funds back in the event of a marriage breakdown or if your child predeceases you and you don't want one of their heirs (perhaps a new spouse) to receive the funds. Any conditions like these should be specifically set out in writing. You should also check with a lawyer to ensure your wishes are legally binding.

Can I give a gift to a minor? Yes, and if it's a small gift, that's pretty straightforward. But if the gift is significant it may be wise to wait. For instance, a minor can't invest funds in their own name so future use of the gift can become problematic. In most cases, it's best to make a large gift to a minor in your Will.

If you are thinking of giving while living, you should do it in the context of your overall financial and retirement goals. A professional planner or financial advisor can help you make the best decisions for your situation.

Donate To Your Favourite Charity - And Save Taxes, Too!

Thanksgiving is over and even those we many still have leftovers in the fridge, the attention of many Canadians now turns to the Christmas season. In the spirit of the holiday season, you may think about 'gifting' your favorite charitable organization with a donation. That's a very kind and generous act, especially during a time of the year that can get pretty expensive.

So why not give a little gift to yourself - by reducing your income tax bill while contributing to a worthwhile cause. It's simple: instead of giving cash, give securities and you'll likely enhance the tax benefits of your donation.

Here's how it works: Tax rules make it possible for most donations of securities to registered charities and public foundations to escape capital gains taxation. For example:

You want to donate $10,000 and you have the choice of making the donation in cash or mutual fund units. Let's assume your marginal tax rate is 46 per cent, and you originally paid $4,000 to purchase your fund units which are now worth $10,000.

If you donate the cash, you can claim the charitable donation income tax credit for the entire amount, generating $4,600 in tax savings and reducing the net cost of your donation to $5,400.

You'll still have your mutual fund units, of course - but you'll probably pay tax on capital gains when you sell them. If you sold them now, you will realize a $6,000 capital gain which will generate a tax bill up to $1,380 (50 per cent of the capital gain of $6,000 multiplied by your 46 per cent marginal tax rate.)

Instead of donating the cash realized from the sale of your mutual funds, you donate your fund units to charity. You still get the charitable credit for your donation of $10,000 mutual fund units and the resulting $4,600 in tax savings - but you will have avoided paying the $1,380 in capital gains tax on the appreciation of value of those units because you made an 'in-kind' donation to the charity.

There are other tax-saving/donation options and a professional advisor can help you decide which are best for you. But remember, you need to act before December 31st to claim a tax credit for the 2009 tax year.

Planning For A Longer Life

Congratulations - if you're a senior or close to it, you're part of a terrific good news story: You are likely to enjoy a longer and healthier life than any generation before you.

According to Statistics Canada, life expectancy at the age of 65 continues to improve with Canadian men age 65 expected to live an average of 17+ years and Canadian women age 65 expected to live an additional 20+ years on average.

That is great news, but there is another side to your longer life: the need to extend your income over those years to ensure you continue to have a comfortable lifestyle. That could also include significant additional expenses for health care. You hope to remain healthy, of course, but statistics tell us that:

• 43 per cent of those over 65 will require an average of three to four years of long term care in a nursing home or long term care facility.

• 66 per cent of married couples will have at least one spouse enter a long term care, personal care or health care facility at some point.

• 28 per cent of Canadians age 65 and over who do not live in a health care facility are likely to receive care due to a long term health problem.

• 1 in 13 Canadians over age 65 is affected by Alzheimer Disease or related dementia.

You don't want to outlive your retirement savings or see them eroded by unexpected health care and medical costs. So, more than ever before, an effective retirement financial plan is an absolute necessity. Here are some planning tips to set you on the right path to a long and financially comfortable retirement:

• Add to your retirement income from your Registered Retirement Savings Plan with a well-chosen portfolio of non-registered investments. Look at investments that benefit from preferential tax treatment such as tax-advantaged investment structures.

• Consider Universal Life insurance as a means of sheltering excess capital while maximizing the value of your estate and/or a life annuity that will provide you with guaranteed regular income for the rest of your life, no matter how long you live.

• Protect your income (or your spouse's) with carefully selected insurance coverage that could include life insurance, supplemental health insurance, disability insurance, critical illness insurance, and long-term care insurance.

Planning for retirement has never been more important. A professional advisor can help you develop a retirement plan that will work for you through all the years of your retirement.

Home Equity - Your Retirement Income Key?

Are you ten to fifteen years away from retirement? If so, you probably have two things: A fair amount of debt from raising a family and a reasonable amount of equity in your home.

That debt could be an issue when you retire. When you have to devote a significant portion of your retirement income to paying debts, you'll have much less to support the retirement lifestyle of your dreams. That's why reducing or eliminating debt is an important step in preparing for retirement. Yet, when you look at your current income and 'outgo', you may be a bit perplexed about where that extra debt-reduction money will come from. Think: 'home equity'.

Home equity is the difference between the market value of your home and the balance of your home mortgage debt. Over time, you can build a good amount of equity because your home's value usually increases while your mortgage balance reduces. Here's how you can use home equity money to get out from under debt:

Downsize Your family is gone and your current home now seems 'too big' so replace it with a smaller one at a lower price and use the difference to pay down debt.

Restructure your mortgage By renewing your mortgage for a short term at a larger amount than you currently owe which is usually easy to do because of the appreciating value of your home - you can create extra cash to pay down other more expensive debt. Mortgage interest rates are generally lower than consumer borrowing rates and by keeping the term of your new mortgage short, you can pay it off before you retire.

Debt consolidation simply means paying off a number of higher interest rate loans or other high-cost debt (like credit cards with annual interest rates often in the 19 -28% range) by taking out a single loan at a lower interest rate for a consolidated overall lower monthly payment. You can work out a repayment plan that can allow you to move from simply servicing your debt balances to actually eliminating them and by paying less interest monthly, you'll create additional cash flow that can be used towards your retirement or other financial goals.

Will your home equity be the key to a more comfortable retirement? Be sure about that and every other aspect of your financial life by talking it over with a financial professional.

Can 'Green' Investments Power Your Investment Growth?

'Green' investments are rapidly gaining in popularity for a couple of very good reasons: first, growing numbers of Canadians are seeking out 'socially responsible' investments that have a positive environmental and social impact as well as providing reasonable returns; and second, because 'green' industries are a fast-emerging market sector with a potentially unlimited upside.

Take the 'green' energy sector, for example: Worldwide energy demand is expected to increase by more than 50 per cent in the next 25 years, so it's no surprise that the demand for clean, alternative energy sources is stronger than ever.

Producing and transporting alternative energy requires new technologies, new companies - and most importantly the ability to raise new capital. One research firm estimates more than $60-billion was invested in the alternative energy industry worldwide in 2006, more than double the amount spent in 2004.

The potential rewards would seem to be considerable and making an investment in alternative energy could appear to be a slam dunk but there is also risk.

The challenge isn't finding alternative energy companies there are plenty to choose from the problem is finding the right alternative energy investments. Like any other investment opportunity, you should seek out diverse, fundamentally sound players with the potential for growth and profits.

Here are some important alternative energy investment considerations:

• Potential market share. Will a company's products be sold and distributed in North America, or around the world? What is the intensity of the competition? How well-funded are competitors?

• Manufacturing scale. Can a company design and manufacture its product in a cost-effective manner that allows for healthy profit margins?

• Government regulation. Regulations increasingly favour alternative energy sources. But they vary according to jurisdiction, and are constantly evolving. How will they affect a particular business?

• Incentives. Alternative energy incentives are becoming more common, with government tax breaks and subsidies for producers and consumers. How might these benefit an alternative energy investment?

• Technology risk. Today's promising product can be tomorrow's failure, especially if it's overtaken by newer technology. This can quickly alter the investment landscape.

• Product acceptance. Not every good idea meets with market enthusiasm. For example, when using new fuels, will the consumer be able to drive as far, and can they re-fuel conveniently?

• Management experience. With hundreds of companies starting up and getting funded, seasoned management teams are more likely to be able to navigate unforeseen developments.

A good way to be comfortable that you've made the right alternative energy investment choice would be to let an expert make it for you - by investing in a socially responsible mutual fund that has already identified a group of alternative energy and/or other socially responsible companies with the most assured potential. A professional advisor can help you go 'green' in the most powerful way for you.

The Cottage Hand-Off - Who Will Receive?

It's your cottage now, but whose will it be in the future? Your family has always had a great time there, so it's natural to assume you'll simply hand it off to your family after you're gone. But have you asked your adult children if that is really what they want? And if it is, will they be financially able to keep it in the family? Here are a few steps you should take to make sure you don't fumble the cottage hand-off.

Have a cottage conversation

Sure, your adult children have always enjoyed the cottage - but will they in the future, when you are no longer around? You know that owning and maintaining a vacation property is a big responsibility and it's not for everyone. That's why you should talk it over with your children now. Find out who wants to take on the responsibilities of ownership and who doesn't. Then make arrangements so your non-cottage inheritors will be treated fairly in your will. That way family squabbles can be avoided.

Make the hand-off less taxing

Plan now to avoid a stiff tax liability when the hand-off occurs. Unless you're passing assets to a spouse, when you die you're deemed to have disposed of your capital assets at fair market value. If your cottage property has appreciated in value, your estate will face a significant capital gains liability. You do have the benefit of a principal residence tax exemption but it applies to just one property at a time. That can be either your cottage or your city home but the one you don't choose will be subject to tax on its increased value.

There will also be tax consequences if you leave the property to your children in your will. A better alternative may be to transfer the property to your children while you live. You can do that as an outright gift of the property or by making one or more of your children joint owners of the property (with or without you as joint owner). You can also transfer the property to a trust, with your children as beneficiaries. Each of these transfer options may trigger an immediate capital gain - but future capital gains on the property will accrue to your children and are not payable until they sell or transfer the property.

A trust also offers the benefit of allowing you to maintain control of the property during your lifetime or through an independent third party (the 'trustee' - who could by your executor) after you die. This can be an effective alternative to manage conflicts over the cottage. Or, if your children are too young or otherwise not ready to take on the responsibilities of ownership, the cottage may be held in the trust until they are ready.

Life insurance can also be a good strategy for covering capital gains taxes on your cottage. The death benefits from the policy are usually tax-free and can be used as a ready source of cash to avoid the forced sale of estate assets, like your cottage, if other funds are not available to pay the capital gains taxes.

It's a good idea to think about your wishes for your cottage as part of your financial and estate plan. A professional financial advisor can help you work through the options that make the best sense for you.

Does A Tax-Free Savings Account Fit Your Retirement Plan?

Is a TFSA a good addition to your retirement planning? Yes, when you make it a part of your overall financial plan that includes your most important tax-saving, income-building investment – your Registered Retirement Savings Plan.

Here’s a quick comparison of the TFSA and an RRSP:

• RRSP contributions provide an immediate tax benefit because they are directly deductible from income. Contributions to a TFSA cannot be claimed as a tax deduction.

• Withdrawals from a TFSA are not taxed when withdrawn. RRSP withdrawals are added to income for tax purposes.

• The maximum yearly investment in a TFSA is $5,000 (although you can have more than one Account as long as you do not exceed the $5,000 limit in total). The RRSP contribution maximum is determined by your earned income. (In 2009, the maximum RRSP contribution limit is $21,000.)

• Generally, the same investments are ‘eligible’ for either a TFSA or RRSP – mutual funds, publicly-traded securities, government bonds, GICs, and segregated funds.

• TFSA funds can be withdrawn at any time for any purpose. RRSP funds are typically not withdrawn until after retirement.

• Withdrawn amounts can be put back into a TFSA without reducing contribution room.

• Unused TFSA and RRSP contribution room can be carried forward to future years.

• Withdrawals and income earned in a TFSA will not affect eligibility for federal income-tested benefits and credits including, the Age Credit, Old Age Security benefits or Guaranteed Income Supplement.

• There is no time limit at which a TFSA must be wound up or converted to a different investment. RRSPs must be wound up or converted by the end of the year when a person reaches age 71.

In retirement planning, a TFSA can be a good option:

• When your RRSP is maximized. Because the income is not taxed, a TFSA will likely deliver better returns over the long term than other non-registered investments – but the tax-sheltered, tax-saving, compound growth features of an RRSP still make it a much better choice for long term growth.

• As an incentive to save that ‘little extra’ for retirement, especially for those with modest means because the savings will not reduce income-tested benefits.

Is a TFSA in your future? Your professional planner can help you answer that question in the most profitable way.

Life Insurance Can Be Part Of Your Retirement Plan

The right kind of life insurance can do much more than provide a tidy sum to your heirs. It can be a good, tax-deferred place to stash the cash you have left over after maxing out your RRSP contributions.

There are two basic types of permanent life insurance that allow excellent flexibility in building tax-advantaged savings and accessing the cash inside them:

· Universal Life is a type of policy that lets you vary the amount and timing of premium payments as well as allowing you to save money inside your policy, protected from taxation.

· Whole Life is a cash value life insurance policy that provides a specified level protection for a premium that will not change unless the level of coverage changes. It also includes a savings feature similar to a Universal Life policy.

Insurance can be a source of liquid savings

As you pay the premiums on your permanent life insurance plan, the cash value of your policy increases in value over time on a tax-advantaged basis. You can access the cash value of your policy in three ways:

1. Withdrawal - You permanently withdraw some or all of the cash value of your policy. This reduces the future growth potential of policy cash values and may reduce the policy's death benefit. Every dollar is taxable, and the amount withdrawn cannot usually be recontributed.

2. Policy loan - You obtain a loan from your insurer secured against the cash value of your policy and the policy continues to grow uninterrupted. For tax purposes, your loan is considered to be first drawn against the tax-free portion of your policy until that component is reduced to zero. After that any remaining portion of the loan is taxable. Loans can be repaid (or the amount plus any accumulated interest will be deducted from the proceeds paid to your beneficiary), and you will get a tax deduction for your repayment up to the amount of any taxable income you declared when you took the loan.

3. Collateral loan - You use your policy as collateral for a line of credit and your policy is assigned to the third-party lending institution. This option does not result in any taxable income to you. You'll usually pay interest on the outstanding balance of the loan and, if you die, the lender receives repayment of the loan (and any unpaid interest) from the proceeds of the policy, and your beneficiary gets any remainder.

By giving you the ability to accumulate tax-advantaged growth in cash value and tax-free benefits to your beneficiaries, permanent life insurance can be an important tool for you to consider. But keep two things in mind: Make your choices based on an overall plan aimed at reaching your financial goals and remember that tax laws can change - so be sure to consult a professional advisor who can help determine what's best for you.

Why Pay Tax On Money You Never See?

Based on their in-depth knowledge of the investing habits of Canadians, investment professionals estimate that half to two-thirds of all investable wealth in Canada is held outside registered savings plans (RSPs). That's understandable because most conservative investors take a practical approach to investing that seeks to reduce risk and volatility while delivering a desired level of returns over the long term - in other words, creating and maintaining a properly diversified portfolio with the best prospects for long term growth.

Often, those investors seek the safety of 'guaranteed' or 'fixed-income' investments such as bonds, mortgages, Guaranteed Investment Certificates (GICs), and other interest-generating securities, which generally provide a stream of income while preserving capital. (Fixed-income investments are one of the three basic types of investments; the other two are cash and equity).

The problem is that interest income is the least tax-efficient type of income. Every $1 of interest income is fully taxable, just the same as your employment income. So, if you are heavily invested in interest-generating investments, you are likely to incur a stiff tax liability each year -- even though you may not currently need that income. And, your tax liability becomes even more problematic if your investments produce taxable income each year but this income is automatically reinvested (or compounded), creating a tax bill with no corresponding cash flow to pay the tax.

It's your after-tax return that matters

Even though your interest income investments may be delivering a significant return, that return may also be significantly reduced by the high rate of taxes you must pay. One option is to move a portion of your non-registered investments into 'equities' that provide income from dividends and capital gains, which are taxed at a much more favourable rate than interest income. For example, any realized capital gains you receive from an equity investment are taxed at just 50% -- in other words, only 50 cents of every dollar of the capital gain is subject to tax.

Dividend income also benefits from federal and provincial tax credits that provide a fair degree of tax relief.

The Tax-Free Savings Account – Wow! Or Wow?

Last year in the 2008 Budget, the Federal Government introduced the ‘next big thing in tax reduction’ -- the Tax-Free Savings Account (TFSA. The TFSA became effective in 2009 and the question is: Just how much of a ‘Wow’ is the TFSA for everyday Canadians?

The government hails it as ‘the single most important personal savings vehicle since the introduction of the Registered Retirement Savings Plan (RRSP)’* and estimates that ‘a person contributing $200 a month to a TFSA for 20 years will enjoy additional savings of $11,045 compared to saving in an unregistered account.’*

That’s because a TFSA will allow you to use your savings to invest in eligible investment vehicles and the capital gains and other investment income earned in your TFSA will not be taxed. Here’s how it works:

• Starting in 2009, any Canadian over 18 years of age can save up to $5,000 each year in a TFSA.

• A person may have more than one TFSA but cannot exceed the $5,000 limit in total.

• ‘Eligible’ investments are generally the same as those allowed in an RRSP.

• Unlike RRSP contributions, which are deductible from income and reduce taxes, TFSA contributions do not qualify as deductions.

• Investment income, including capital gains, earned in the TFSA will not be taxed, even when withdrawn.

• TFSA funds can be withdrawn at any time for any purpose – from buying a new car to starting a business.

• Withdrawn amounts can be put back into a TFSA without reducing contribution room.

• Unused TFSA contribution room can be carried forward to future years.

• Neither income earned in a TFSA nor withdrawals will affect eligibility for federal income-tested benefits and credits – such as the Canada Child Tax Benefit, Age Credit, Guaranteed Income Supplement and Employment Insurance Benefits.

• Contributions to a spouse’s TFSA are allowed.

Investment experts suggest that a TFSA may deliver better after-tax value than some non-registered investments, certainly over longer terms. On the other hand, the experts also point out that what is ‘eligible’ for a TFSA and what is ‘suitable’ are two very different issues. For example, an investor may make very conservative – meaning low-earning -- choices for a TFSA because capital losses on more speculative investments will not be deductible – but that strategy may not be consistent with the investor’s overall financial goals and objectives.

Time To Step Away From Your Business?

Maybe not today or tomorrow, but one day in the not so distant future, you’re going to do it: Step away from your business and hand the responsibility for its operation to someone else.

But who will it be and how will you do it? There are plenty of tax, legal, financial and estate issues to consider – and that’s where business succession planning comes in. Here are some of the key elements you need to consider.

• Don’t leave things to chance. To avoid the loss of your business or its forced sale at substantially reduced value – and to ensure your family will have sufficient income to sustain the lifestyle you want for them – look to disability, critical illness and life insurance as a means of protecting what you’ve built.

• Make it legal. Establish a buy-sell agreement that sets out the terms and conditions under which your share of the business will be acquired by co-owners, partners or other stakeholders.

• Plan for retirement. If you will be relying on your business as a source of retirement income, you need a plan for converting its value to cash when the time comes. There are three basic ways to do that: Sell your business as a going concern to an outsider; wind it down while you slowly deplete its investments in a tax-efficient manner; or pass it on to a relative, co-owner or key employee.

• Prepare for the tax burden. The proceeds from the sale or transfer or your business could be subject to income and capital gains taxes. By planning now, you can minimize the tax that will be paid by you, your estate, or your heirs. For example, a family trust or estate freeze could effectively reduce taxes when you transfer ownership to family members.

Life insurance can be a cost-effective way of financing the succession without saddling the business with the need to borrow money.

• Put your wishes in your will. It’s critical that you make provision for the disposition of your business in your will, especially if you’re planning on passing it on to a family member after your death. Set out how the family member will acquire the business and avoid disputes by ensuring every family member is taken care of in an equitable way.

The ‘exit strategy’ you choose should be right for you and your family. To be sure you’ve got it ‘right’ get input from your accounting, legal and financial advisors and your family – that’s the best way to a successful succession.

My Retirement Years Will Be …?

You're busy today and you'll be busy tomorrow - but one day in the not so distant future, you'll be retired and then what?

If you wait until you're retired to figure out what you want to do for the next phase of your life, you'll be selling yourself short. The time to start planning for retirement is right now -- because your retirement years could be starting sooner rather than later and likely lasting for a long time. These days, Canadians are choosing to retire earlier than ever before, with the average retirement age now just 62. Add in increases in life expectancy and it is widely believed that the amount of time most people spend in retirement has tripled over the past twenty-five years

People often confuse retirement planning with financial planning - and, while money is a vital tool in achieving a comfortable retirement, financial security alone will not provide a successful and fulfilling retirement. That requires planning and preparation in all areas of your life.

Successful retirees will tell you their retirement plan is fulfilling because it began with a vision - so look into your future and ask yourself some questions. How do you see your life after work? What do you see yourself doing?

To get you started, here are six key factors to a successful retirement abbreviated from extensive research by the Retirement Lifestyle Centre Inc., a North American research and education company focusing on retirement issues:

1. Have a clear vision of the future. Most successful retirees will tell you they have created a structure for their retirement life that replaces the structure they left behind with their workplace.
2. Practice good health and wellness. Look for ways to keep yourself both physically and mentally stimulated through all the years of your retirement.
3. Be positive about making your retirement 'work'. Once, retirement was viewed as 'freedom from work'; now it's seen as 'freedom to work' at something your truly enjoy.
4. Take a balanced approach to leisure. Cast a wide net, be adventurous and find a happy 'life balance'.
5. Enjoy personal relationships. Work on maintaining and developing your social networks - and don't wait to the last minute; it takes time to develop networks of friends and personal interests that will support a fulfilling retirement.
6. Feel financially comfortable. Get the maximum amount of joy out of all your retirement years by making sure right now that your financial plan will support your personal retirement vision.

A professional advisor can also help turn your retirement vision into reality.

As Your Life Changes, So Should Your Investment Strategy

It is said that a constant in life is change. That is why the 'set it and forget it' investment strategy is outdated - especially when it comes to making sure that your investments will deliver the returns you need for the quality of retirement you want.

Let's look at how change can affect your retirement date, your retirement lifestyle and your requirement for retirement income:

• Life expectancy is increasing. People are living longer and healthier lives and that means your retirement plan should ensure you don't outlive your income.

• It is no longer mandatory to retire at age 65 in most occupations. That means you may wish to work after age 65 to fund your longer retirement. Or, you may decide to continue working part time after retirement either to supplement your income or just because you want to.

• Companies are learning to value older, more experienced employees. Yours may offer incentives that will keep you on the workforce after the old-school 'traditional' retirement age of 65.

• Defined benefit pension plans are becoming less common. That means a growing number of employees can no longer assume they will have a 'defined' retirement income. Instead, these employees must bear more responsibility for their retirement plans and, perhaps, more uncertainty about a feasible retirement date.

So, the key is to maintain a flexible investment strategy that allows you to make revisions on your own schedule as your personal 'life changes' dictate. The lifecycle approach to investing takes into account your financial needs and ability to save at the three main stages in your life:

Ages 25-40

These are the saving years when you typically have higher expenses and less to invest. You should maximize contributions to your Registered Retirement Savings Plan (RRSP). However, because you have a long time horizon to retirement, you can also choose a more aggressive investment strategy that targets volatile investments that might go down in the short term but may produce higher returns in the long term.

Ages 40-60

These are the wealth-building years. Your debt is reduced or eliminated so you have more capital to invest. Maximizing contributions to your RRSP is still a very important part of your retirement plan and, as your retirement years approach, you may want to redirect your portfolio into lower-risk, fixed-income investments.

Age 60 and over

These are the retirement years. You will likely need to begin tapping into your accumulated investments in order to sustain your retirement lifestyle.

Focus on investments that preserve your capital but also consider growth investments that can add to your retirement income and protect against the effects of inflation over the extended years of your retirement.

There are other important aspects to your retirement planed based on an effective income investment strategy - such as diversification and asset allocation - and a professional advisor can help you make the best choices to suit your lifestyle, regardless of changes.

Are You Ready To Pass The Family Farm On To The Next Generation?

If you’re a Canadian farm owner over the age of 60, you’re part of a growing group. According to Statistics Canada, there are now more Canadian farm owners in your age bracket than ever before*. Whether you’ve reached your sixth decade or not, you may be thinking of retirement – and of what you’re going to do with the family farm.

You probably want the farm to stay in the family – but which of your children should get it … and where does that leave your other children? Then, there’s you and your spouse -- the choices you make can have a huge impact on the level of your retirement income. They can also affect the amount of taxes your estate will pay.

Farm succession planning is a process without a one-size-fits-all solution. A farm transfer and estate plan could help smooth the transition from one generation to another, ensure you get the retirement income you need, and limit estate taxes. Here are some basic steps to developing the plan that works best for you:

• Review your current situation – the net worth of your family and your farm and your current cost of living.

• Sit down with your spouse and budget what your retirement expenses will be. If you intend to move off of the farm, you may incur expenses that you have not experienced before such as rent, condominium fees, and municipal taxes including cost for water and sewer. And, don’t forget about replacement of your vehicle every 5 to 10 years. Strive for financial security -- not simply transferring the farm to a child as quickly as possible.

• Determine the most appropriate sources of retirement income for you and your spouse. Would it be better to live on buy-out payments from your farming children (supplemented by investment income) or should some of your income come from your continued involvement in the farm? Keep in mind the potential cost of debt servicing to the farming children.

• Get everybody involved – you and your spouse, your farming children and non-farming children. Ask each person, “What does the farm mean to you?” You may be surprised at the answers. By taking each person’s hopes and expectations into account, you’ll avoid future disagreements and ensure family harmony after your death.

• Treat all of your children fairly and equitably – but not necessarily equally. Consider life insurance as a useful tool in funding an equitable distribution to your non-farming children and/or covering estate expenses.

• Preserve the value of your farm by ensuring it (and your estate) qualifies for all the special tax reductions available to you – especially the $750,000 capital gains exemption for qualifying family farms and the tax-free rollover of farm assets to children through various forms of equity transfer.

Tax laws associated with farms and succession are complex. Be sure to get expert advice from your lawyer, accountant and financial planner who can quarterback your team to succession success.

Who Needs Segregated Funds? Maybe You.

It's easy to overlook potentially powerful additions to your investment plan when they have complex-sounding names like - well, Segregated Funds. But you could be short-changing your financial plan when you ignore certain investments like Segregated Funds.

Segregated Funds (sometimes called 'Seg' Funds) are offered by insurance companies. Like mutual funds, these funds pool money from investors and invest in a variety of individual securities. They provide the benefits of professional money management, simplicity and choice, plus the protection of life insurance.

A Segregated Fund investment could be right for you if you.

• Want the growth potential of a mutual fund with the additional advantages of capital guarantees. A Segregated Fund can allow a cautious investor to participate in equity markets with less worry that volatility could erode the investment because, by leaving the money invested for the duration of the contract, 75 to 100% of your original investment is guaranteed (depending on your contract).

• Are a business owner, self-employed person or a professional requiring creditor protection because a Segregated Fund policy is a type of life insurance, and its value "may" be protected in the event of bankruptcy. Talk to your lawyer about whether creditor protection in your province is available.

• Want to establish and maintain a fixed amount to pay to your beneficiaries. The value of a Segregated Fund policy flows directly to the beneficiaries, bypassing your estate, potentially reducing probate fees and avoiding access by creditors. Unlike a will (but subject to provincial legislation) the payment to your beneficiary is usually automatic.

• Seek a death benefit guarantee. If you should die before your policy matures, your designated beneficiary receives the greater of the market value or the guaranteed amount (less a proportion of withdrawals) and all deferred sales charges are waived.

Retirees may also benefit from a Segregated Fund investment. During a time when nest egg preservation assumes greater importance, transferring assets to a Segregated Fund can provide added protection from the uncertainties of investment markets.

When you look carefully, a Segregated Fund isn't all that complicated -- and it could be a valuable addition to your financial plan. A professional financial planner can help you decide if a Segregated Fund is right for you.

Unbalanced Portfolios Cause Falls

In every horse race there is one winner and a bunch of losers. Yet, by nature, we humans are ever optimistic - that's why we bet on horse races even though the odds are never in our favour. But every once in a while we win - and that's when another aspect of human nature kicks in: the optimistic tendency to 'ride a winner.'

Many investors carry that 'ride a winner' philosophy into the selections in their portfolios and that is usually a very risky investment decision - here's why:

• If you're an investor, you have no doubt looked into effective investment strategies - and one of the most effective is to build a diversified portfolio in which you divide your investments within and across asset classes to take maximum advantage of market conditions and economic changes while protecting yourself against downturns.

You may even have created such a portfolio for yourself - and then you let it get out of whack . because you are, after all, an optimistic human.

• You see that some of the investments in your portfolio are real winners while others are lagging. So you switch to the 'optimistic' strategy of 'riding a winner' and transfer an additional portion of your assets from the 'laggards' to the 'winners'.

• And just like that, your balanced portfolio becomes unbalanced and ripe for a fall. Study after study and investor experience in capital markets that always include a degree - and sometimes a high degree - of volatility have proven without a doubt that a properly diversified and balanced portfolio strategy is the best strategy over the longer term.

Large institutions, foundations, and other organizations that make huge investments know that a balanced portfolio is a 'best practice' investment management strategy. And they also know that when a portfolio swings out of balance, it's time to rebalance it.

The same holds true for individual investors like you. Every so often, it's necessary to rebalance your portfolio to bring it back in line with the original allocations that match your personal tolerance for risk, your age and family status, and your financial goals. And sometimes that can mean hopping off a 'winner' and reinvesting that money in an investment that has lagged.

Having the discipline to maintain a balanced portfolio - and knowing when it is necessary to rebalance -- can be difficult and complex. A professional financial planner can help keep your portfolio true to your goals.

Thinking Of Ethical Investing?

Are you warming up to global environment messages? Does the Kyoto Accord strike a chord with you? Are you thinking about what you can do, as an individual, to help make our world a bit better?

If so, you’re far from alone. More people are becoming actively involved in a host of environmental and ethical issues – including a growing number of investors who are seeking holdings that reflect their values. They want to support companies that behave in ways they consider to be appropriate or responsible, companies that are trying to do the right thing on a range of ethical, social and environmental issues.

This type of ‘ethical’ investing has gained so much traction it has been given its own name: Socially Responsible Investing (SRI) and, these days, it’s getting plenty of attention as investors increasingly search out socially responsible investment alternatives.

SRI is simply the integration of your personal values with your investment decisions. In addition to the profit potential of an investment, you also consider the investment’s impact on society and the environment. SRI investors typically avoid industries such as gaming, tobacco and armaments and companies with a poor record for environmental concern, governance, labour relations and/or human rights in favour of those with a focus on the environment, solid social performance, or sustainability. Companies involved in renewable energy, biotechnology, water or waste management and health care often fall into this category.

Mutual fund managers develop an ‘ethical’ fund using techniques like these:

• Negative screening – avoiding certain types of investments like weapons manufacturers.
• Positive screening – giving preference for company activities or characteristics considered to be desirable, such as industries involved in renewable energy or health care.
• Best-of-sector – selecting the leading companies in a business sector based on their environmental and social performance or sustainability.
• Social responsibility – adding a process for selecting shares that addresses issues related to social responsibility.

It is also important to note that a fund is not automatically “unethical” just because it isn’t termed ‘ethical’. Fund managers typically are of the view that natural market forces will suppress the price of stock in a company that has been publicly identified as being ‘unethical’ – so, like any informed investor, they typically will not include ‘iffy’ companies in a fund’s portfolio.

Ethical funds are not for every investor. They are often more volatile than ‘traditional’ funds but, over the long term, some have produced good returns. Are they for you? Maybe, if they’re part of a balanced portfolio. Your professional advisor can help you make the decision whether or not to ‘go ethical’.

Money Education – Things Your Children May Not Learn In School

It doesn’t cost much, except time – but neglecting it could be costly for your kids. That would be teaching them age-appropriate money management skills they may not learn in school. A dollars and sense education will help them achieve their life goals, lead a better life and help others.

Here are some age-related toonie tutorials to get you started.

6 – 12 years

Give your youngsters a ‘fun’ bank to fill with coins from you and others. Let them graduate to a ‘real’ bank account and an allowance clearly tied to the completion of certain tasks. A fixed amount allowance is best because it teaches that there are serious choices to be made about when to spend and when to save. Encourage them to deposit at least ten percent of their allowance in a bank account. Explain how interest makes their money grow. Board games like Monopoly or interactive websites such as the Bank of Canada’s (www.bankofcanada.ca) and the Canadian Foundation for Economic Education (www.moneyandyouth.cfee.org) are also good money education tools.

12 – 16 years

Help your children develop a simple budget plan that includes keeping their tax receipts and statements so they can keep track of where their money went. A charitable giving component will show them how their money can have a positive impact in the community. Give an allowance ‘bonus’ for special work with the requirement that this extra money must be invested. Introduce them to the concepts of ‘compounding’ and tax-saving through such long-term investments as a Registered Retirement Savings Plan (RRSP).

Use shopping trips to discuss debit and credit including the fact that most credit cards carry much higher interest rates than other forms of borrowing, such as a personal loan.

16 – 18 years

Have each child file a tax return as soon as they have a job that results in a T4. They’ll get a more ‘personal’ view of income taxes and build up room for future contributions to an RRSP. Co-sign for a credit card in their name with a low limit. Carefully monitor its use and stress the importance of making their monthly card payments to maintain a good credit rating and avoid high interest rates or late fees. Use monthly credit card statements to discuss their spending patterns and best uses of their purchasing power.

Involve your children in your family finances and discuss how your family budget must balance expenses and income. Introduce them to savings and investment products -- stocks, bonds, Guaranteed Investment Certificates, registered and non-registered savings plans -- the role of insurance, and investment concepts like portfolio diversification and risk/reward decisions.

It’s smart to talk money with your children and if you need help, give your professional advisor a call. A professional perspective can add welcome weight to your toonie tutorials.

Tax Tips For Students

It's that time of year again, students have bought their supplies, and are packing the classrooms. The cost of education rises every year, but what can we do about it? Here are some basic tips to help ensure your student is taking full advantage of the tax relief the government is offering:

• Scholarships and bursaries are not taxable and not reported on the student's income tax return when the student is registered in a program that entitles the student to claim the Education Tax Credit.

• Interest paid on a student loan is eligible for a tax credit when the loan is part of a federal or provincial student loan program. The student cannot claim interest paid if the student loan has been renegotiated with a financial institution or has been consolidated with other loans. If the student has no tax payable in the year the interest is paid, the amount can be carried forward and applied in any of the next five years.

Other tax deductions available to students:

• Moving expenses - if a student moves more than 40 kilometres to be closer to school or to take a summer job.

• Child care expenses may be claimed by the higher earning spouse/common-law partner if the lower income spouse is enrolled in a qualifying secondary or post-secondary program.

• GST rebates - a student must apply for the rebate on his/her tax return each year.

Other tax credits available to students:

• The Canada Employment Credit on the first $1,000 of employment income.

• A Tuition, Education and Textbook Credit for:

• Tuition fees when students are enrolled in full-time or part-time studies and when the fees are more than $100 for the year.

• An Education amount for each month of enrolment -- $400 a month for full-time students (or part-time students with a disability) and $120 a month for part-time students.
  

• Textbooks to a total of $65 a month for full-time students and $20 a month for part-time students.

• A Public Transit Pass Credit for monthly or longer transit passes. Receipts are needed to make this claim.

• Unused Tuition, Education and Textbook Credits can be transferred to a spouse, common-law partner, parent or grandparent when the student first uses the tuition, education and textbook amounts to reduce taxes payable in that year to zero. The maximum transfer amount is $5,000 minus the amount used by the student. Alternatively, any unused tuition, education, and textbook amounts can be carried forward indefinitely by the student.

• Parents may claim for a dependent under 19 years

You can find out more about tax-saving strategies for students and everyone else in your family from a financial advisor.

Never Retire - From The Right Investment Strategy

You started planning for retirement a long time ago - and now, the retirement of your dreams is just around the corner. You worked hard and invested to grow your retirement nest egg so that one day you'd have the money you need to live comfortably and enjoy life. But don't be too quick to crack your retirement piggy bank without a plan that will ensure your hard-earned investments and other income will last for all your retirement years.

Here's why you need a retirement investment strategy:

• The average age expectancy is rising. You may need to maintain your retirement income for more than 20 years.

• Even low inflation can damage your purchasing power. For example, $50,000 in 1970 would have only $8,902 of purchasing power today based on an average annual rate of inflation of 4.77% from 1970 to 2007. *

• Your rate of withdrawal must be based on your risk profile and total portfolio value. For example, if your investments are earning a 5% rate of return, they will not support a 6-7% withdrawal rate.

• A market downturn can prematurely deplete your investment portfolio. A negative market cycle just before your retirement or in the first few years of retirement can mean a much lower income than you expected.

Here's what you need to know to develop an effective retirement investment strategy:

• Know your expenses and manage them. You will have essential expenses -- food, electricity, health care, and so on - that you can't live without and discretionary expenses - travel, a new car - for 'fun' activities. One common rule of thumb is that you'll need 70-80% of your pre-retirement household income to maintain your lifestyle in retirement, as long as your expenses do not change dramatically as you age.

• Know your sources of income and manage them. In retirement, your income will derive from many sources - your investments and personal savings, government benefits, and employer-sponsored pension programs. Things can get a bit complicated - so plan to stay on top of your income sources.

• Know effective tax-reduction strategies: be aware of potential 'clawbacks'; take advantage of all your tax credits and deductions; and make use of pension income splitting opportunities (if available).

Here's how to implement an effective retirement investment strategy:

The key to a successful investing is maintaining a balanced, diversified selection of investments.

You can achieve this by dividing your assets into three 'pots' to help achieve the following goals as an example:

1. Long-term goals - a retirement income that will last 20 years or longer.
2. Mid-term goals - replacing your car in five years.
3. Short-term goals - making a down payment on a retirement property next summer.

Money from each 'pot' should be distributed among the three classes of investments:

1. Cash or cash equivalents such as government savings bonds, T-bills and money market funds.
2. Fixed-income securities such as GICs and fixed-income mutual funds.
3. Equity investments, including Canadian and international stocks and equity mutual funds.

Goals will be different but you should assume only as much risk as you are comfortable with in planning to meet goals and at level that matches your personal risk tolerance.

A sound post-retirement investment strategy starts with a good understanding of your sources of income and your goals. A professional financial advisor can help you achieve the right balance between risk and reward.