As you move towards the completion of residency, there are money management habits that you can put into practice today, that will help you have greater control of your finances throughout your medical career. To learn more click here: Transition to practice and money habits
As a business owner, one of your challenges is learning how to balance between reinvesting into the business and setting money aside for personal savings. Since there are no longer employer-sponsored pension plans and the knowledge that retirement will come eventually, it’s important to have a retirement plan in place.
We’ve put together an infographic checklist that can help you get started on this. We know this can be a difficult conversation so we’re here to help and provide guidance to help you achieve your retirement dreams.
Income Needs
Determine how much income you will need in retirement.
Make sure you account for inflation in your calculations.
Debts
You should try to pay off your debts as soon as you can; preferably before you retire.
Insurance
As you age, your insurance needs change. Review your insurance needs, in particular your medical and dental insurance because a lot of plans do not provide health plans to retirees.
Review your life insurance coverage because you may not necessarily need as much life insurance as when you had dependents and a mortgage, but you may still need to review your estate and final expense needs.
Prepare for the unexpected such as a critical illness or a need for long-term care.
Government Benefits
Check what benefits are available for you upon retirement.
Canada Pension Plan- decide when would be the ideal time to apply and receive CPP payments. Business owners are in a unique position to control how much can be contributed to CPP by deciding to pay salary or dividends. (Dividends don’t trigger CPP contributions.)
Old Age Security- check pension amounts and see if there’s a possibility of clawback.
Guaranteed Income Supplement- if your income is low enough, you could apply for GIS.
Income
Are you a candidate for an individual pension plan (IPP)? IPPs can provide higher contributions than typically permitted to an RRSP and the ability to create a lifelong pension.
Check if your business is a candidate for a group RRSP or company pension plan. This is a great way for you to build retirement savings and provide benefits for your employees and business too.
Make sure you are saving on a regular basis towards retirement- in an RRSP, TFSA, or non-registered. Since you can control how you get paid, salary or dividends, dividends are not considered eligible income to create RRSP room, therefore you should make sure you have the optimal mix of both to achieve your financial goals.
Ensure your investment mix makes sense for your situation.
Don’t forget to check if there are any other income sources. (ex. rental income, side hustle income, etc.)
Assets
The sale of your business can be part of your retirement nest egg. Therefore, you should make sure you know the valuation of your business and your plan to sell the business to your family, employees, partners or a third party. You should also know when you decide to sell your business too.
Are you planning to use the sale of your home or other assets to fund your retirement?
Will you be receiving an inheritance?
One other consideration that’s not included in the checklist is divorce. This can be an uncomfortable question, however divorce amongst adults ages 50 and over is on the rise and this can be financially devastating for both parties.
Contact Us about helping you get your retirement planning in order so your retirement dreams can be achieved.
You most likely do, but the more important question is, ‘what kind?’ Whether you are a young professional starting out, a devoted parent, or a successful CEO, securing a life insurance policy is probably one of the most important decisions you will make in your adult life. Most people would agree that having financial safety nets in place is a good way to make sure that your loved ones are taken care of when you pass away. Insurance can also help support your financial obligations and take care of your estate liabilities. The tricky part, however, is figuring out what kind of life insurance best suits your goals and needs. This quick guide will help you decide which life insurance policy is best for you, depending on who needs to benefit from it and how long you will need it.
Permanent or Term?
Life insurance can be classified into two principal types: permanent and term. Both have strengths and weaknesses, depending on what you aim to achieve with your life insurance policy.
Term life insurance provides death benefits for a limited amount of time; usually for a fixed number of years. Let’s say, you get a 30-year term; this means you will only pay for each year of those 30 years. If you die before the 30-year period ends, your beneficiaries will receive the death benefits they are entitled to. After the 30-year period, the insurance will expire and your beneficiaries will no longer be entitled to any benefits.
Term life insurance is right for you if you are:
Unlike term life insurance, permanent life insurance does not expire. This means that your beneficiaries can receive death benefits no matter when you pass away. Aside from death benefits, a permanent life insurance policy can also double as a savings plan. A certain portion of your premiums can build cash value, which you may “withdraw” or borrow for future needs. You can do well with a permanent life insurance policy if you:
A permanent insurance policy can help pay off estate taxes so that successors can inherit the business, worry-free. Different people have different financial needs, so there is no one-size-fits-all approach to choosing the right insurance policy for you. Talk to us to find out how permanent or term life insurance can best give you security and peace of mind.
