December 2017
Season’s Greetings! This winter we would foremost like to wish all our clients a Happy 2018 New Year. A new year brings once again new opportunities and exciting new goals for us here at our office of HollisWealth.
Its New Year’s Resolution time again! And with that a lot of promises to be healthy and get better get forgotten in our fast paced busy lives. But instead of buying a membership at the gym and then stop going after a month or so there are a few smaller changes you can make in your day to day lives to help you become a more healthier you. Some quick tips that can help improve your lifestyle are:
- Eating a healthy breakfast every day. By working a head and making some overnight oatmeal in a mason jar you can enjoy a quick healthy breakfast and take it on the go if needed.
- Drink more water each day. I know that when you’re at work coffee helps keep you moving along, but by drinking a glass of water during your work day if you don’t drink any or adding an extra glass it can help keep your skin and kidney in shape.
- Get eight hours of sleep a day. By going to bed even an hour or two earlier every night can help reduce stress and can make us feel more refreshed.
- Stay social with friends and family. By keeping in touch with your family and friends it can help reduce the stress in your lives, keep you motivated, and liven your spirts which will make you a more positive you!
- Try to fit in at least thirty minutes of exercise a day. You can start slowly and increase it over time as you go, but fitting in some exercise during your daily routine will help make you feel better and have more energy during your day. Even doing small things like walking some stairs instead of an elevator, getting up during work and walk around the office a few times a day can make a difference to help improve your life and well-being.
Even though this is a bad time of year to go out and get active, there are always a bunch of small thirty minute work outs that you can do in your home to make yourself more active and healthy. And by doing some small changes like drinking more water, having a healthy breakfast every morning, and getting that extra hour of sleep it can help you live longer healthier lives.
Around the Office:
Education
In December Roman has completed the Canadian Initiative for Elder Planning Studies course and has earned his credential of EPC. The EPC involves a "total needs approach" based on the fact that needs evolve from an individual's early wage-earning years through the aging process. The mission of the program is to enrich the knowledge and understanding of professionals, including Insurance and Financial Advisors, on topics focusing on the specialized needs of Canadians as they age.
Also in December Roman and the rest of the staff has completed the Anti Money Laundering course and by completing this course we learned that due to the new requirements we are no longer able to accept bank drafts or any third party cheques. We ask that when you do bring in a cheque that you bring in a personal cheque made payable to HollisWealth In Trust, or if easier than to bring in a cheque an online deposit will work also, please contact our office and we can advise you of this process, just like paying your bill online through your current bank.
Tax Season:
Another year of tax preparation is about to begin for the 2017 tax year. Once again our office will be preparing Capital Gain/Losses Reports. Should you require one, please allow 5-7 business days so we can ensure we properly prepare this report for you and/or your tax advisor. Please contact Ashley directly should you have any questions.
This is a reminder that RRSP Contribution tax slips will be issued during the week of January 29, 2018, and then on a weekly basis for RRSP Contributions made in the first 60 days of 2018. For clients using the client portal you will be able to access your tax slips online by using the client portal and going under my documents. Clicking on the arrow, window will pop up and you can choose to see your tax slips and download them there. Tax slips for T4RSP/T4RIF for 2017 withdrawals from any nominee registered accounts will be mailed out by February 28, 2018.
TFSA Limit 2018:
The 2018 TFSA limit has not changed and remains at $5,500.00. Reminder that TFSA contribution room carries forward annually automatically so there still is time to top up if the funds aren’t immediately available. Most people do not realize how much TFSA contribution room they actually have. Please confirm with your tax advisor for your actual limit, however we would be more than happy to assist you.
A couple of factoids regarding the Canada Pension Plan (CPP):
“Contributory” period and “Dropout” period:
For purposes of calculating CPP benefits the “contributory” period starts at age 18. The old rule of thumb was that in order to receive maximum benefits a worker would have to contribute the maximum amount for generally 40 years into the plan based on yearly maximum pensionable earnings (YMPE). In fact the government allows for beneficiaries to exclude earnings for certain periods of “low” or “no” earnings which results in a CPP retirement pension that is higher than it would be had these periods been included in the calculations. This period of exclusion is called the “dropout” period. The allowable dropout period for people who have never been disabled nor had children is 17% of their contributory period. This 17% as an example could cover times of unemployment due to layoff or time spent as a student in college or university after age 18. The government updates the average earnings over the contributory period and the benefit entitlement is adjusted accordingly.
A rough example can be illustrated for a person who worked and contributed to CPP for 42 years. The government would note the contributory period in months (504) and then apply the 17% dropout period (.17 x 504). The result would be a drop of 85 months to 419 months or approximately 35 years of contributions. The government then updates average earnings based on a smaller contributory period, which of course boosts average earnings and the resulting CPP benefits to be received. We have to remember that benefits are discounted 0.6% for each month received before age 65 down to age 60 for a maximum discount of 36% for immediate receipt at age 60. On the flip side benefits are increased by 0.7 for each month deferred from age 65 to age 70 for a maximum increase of 42% by deferring receipt to age 70.
Post-Retirement benefit (PRB):
Prior to 2012, someone receiving CPP benefits and then becoming re-employed was referred to as a “working” beneficiary. The person was no longer required to contribute to CPP and was receiving CPP. Effective January 1, 2012 “working” beneficiaries younger than 65 had to start contributing to CPP again. The government offset this news by introducing the post-retirement benefit. A person is eligible to receive PRB if they are working after age 60 and are receiving CPP benefits. The PRB works out to be 1/40th of the maximum retirement pension and is indexed each January 1st. For 2017 based on a monthly maximum CPP of $1,114.17 the PRB would amount to $27.85 monthly on top of normal CPP benefits. While the amount seems small at first glance it represents an extra $334.20 annually for the recipient. There is now a decision to be made for people aged 60 to 65 that continue to work. Do they continue to contribute to CPP and defer the start of benefits until age 65 (or even 70 with the enhanced percentage) or do they take a discounted CPP pension before age 65, contribute to CPP and also receive the post-retirement benefit. There is a different age “crossover” point at which people are better off taking early benefits or delaying benefits. This point is obviously different for each recipient and life expectancy as well as other unique personal factors can play a significant role in determining the timing for benefits.
Prepare Clients for the Retirement Home Stretch
To many clients, retirement may seem a distant dream. Yet as the date looms, they often feel anxious and edgy about these life changes. Are they financially prepared? What will they do with themselves? Here are a few key reminders to share with clients headed into the home stretch, say six to 24 months before retirement:
- Prep work is key. HuffPost contributor Jeff Rose offers six key steps, to take if retirement is on the agenda for the upcoming year. Among them: identifying retirement goals and assessing income, dialling down spending (and perhaps living on that retirement budget for a few months before pulling the trigger), and planning for how to stay occupied.
- That daily latte counts. This Financial Post article by Beth Pinsker features a new app, called Preretirement, that helps people visualize how their spending habits will affect their retirement goals. The idea: if you knew your daily latte would make you work exactly four months, 17 days and 9 hours longer, would you be enticed to skip it?
- A move may be in the cards. Not all cities are equal when it comes to providing what retirees need or want. Clients considering a move should check out this Maclean’s ranking of top cities to retire in by Mark Brown. The interactive tool might help them narrow their choices according to what’s most important, whether that’s weather, access to doctors, property tax levels or housing affordability.
- Cognitive decline can impact an investment portfolio. Ben Carlson’s article in Bloomberg View points out that “getting older is a double-edged sword” when it comes to one’s investment abilities. On the plus side, clients will have the benefit of experience in the markets and asset growth. On the negative side, aging can eventually result in cognitive decline that could put assets in jeopardy. Carlson offers three tips to protect against that risk.
Originally published on Advisor.ca on August 24, 2017 by Camilla Cornell. No reproduction in part or in whole is permitted without consent, permission to reprint the above article granted by Advisor.ca.
I See Who You Are
When we think of giving, we turn our thoughts to money, presents and perhaps even the gift of service. Donating to worthwhile causes and offering the gift of our time and talents are important contributions. How often do we consider the power of the gift of recognition – of seeing and acknowledging the unique essence and value of another person?
Giving is associated with the notion of philanthropy. When we look to the derivation of the word, we find that philanthropy refers to the love of humanity, the love of what it means to be human for both the benefactor and the beneficiary. What it means to be human goes beyond the surface of what we look like, what we know, and what we possess. Expressions of our humanity are who we are.
I had a poignant experience when a friend called to tell me that she wanted me to know that she ‘could see who I am.’ In that instant, her gentle and firm declaration stopped all my mental chatter. It took a moment to take it in.
That was probably one of the most profound gifts I have ever received! I wonder if she realized that her willingness to look to the essence of another person’s humanity (in this case, me) was the ultimate act of giving – of philanthropy. Imagine the impact of this practice! Your relationships with your family, friends, colleagues, neighbors, clients and community could take on a new level of expression. The Jewish Philosopher, Martin Buber, affirmed that our relationship with others lives in the space between us. It is our responsibility to keep this space clear of our assumptions and judgments so that we can freely walk across this space to experience the true essence of another.
Tips for the Art of Philanthropy
- Be present. When you are with another, whether it is offering a professional service, advice, support or bagging groceries — be there. Make that individual feel that right in this moment, he or she is the most important person to you. Put aside your laundry list of ‘to-do’s and offer your full attention.
- Set your intention that this encounter, no matter how mundane, will be about the other person — fully.
- Suspend your beliefs, assumptions, expectations and judgments long enough to hear what the other person is really saying. The act of listening is an art.
- Pause before you respond – don’t try to finish his or her sentences so that you can more quickly say what is on your mind.
- Once the other person has finished speaking, check in. Repeat back what you have heard to ensure you got it right.
- Ask what the other person wants from you next: Advice, support, or simply silence.
Finally, keep the space between you and others clear so that you can ‘See Who They Are.’
Rhonda Latreille, MBA, CPCA
Founder & CEO
Age-Friendly Business
No reproduction in part or in whole is permitted without consent.
Jennifer Legge, Newsletter Editor for Age-Friendly Business®, Jennifer@AgeFriendlyBusiness.com
Tip of the Quarter
“Be nice to people… maybe it’ll be unappreciated, unreciprocated, or ignored, but spread the love anyway. We rise by lifting others.” Germany Kent
This newsletter was prepared by Roman A. Groch who is a registered representative of Investia Financial Services Inc. (a member of the Mutual Fund Dealers Association of Canada and the MFDA Investor Protection Corporation). This newsletter is not a publication of Investia Financial Services Inc. and the views and opinions, including any recommendations, expressed in this newsletter are those of Roman A. Groch alone and not those of Investia Financial Services Inc.
Investia Financial Services Inc. does not provide income tax preparation services nor does it supervise or review other persons who may provide such services.