Financial planning for seniors doesn't have to be complicated, and it's one of the wisest financial choices a person can do in his or her lifetime. The easy part is sitting down and coming up with your retirement goals. This can be done by sitting down and simply picturing the life you want to live and by deciding what's important to you. Important things to take into consideration are: family, health, and life-style.
One the right side you have people who are more interested in stability and willing to live more frugal later on in live. This group of people usually does not save as much money as the first group. They also don't seem to place as much importance on their retirement goals. This is their choice. For the average person they can either sacrifice some things now and reap later, or reap now and pay later.I've come to find that there are two groups of seniors with different retirement goals and plans. On left side you have people who want to save enough money to live the end of their life in luxury, maybe even better than they live now. This group of people is willing to sacrifice now to reap the rewards in luxury later on in life.
The hardest part of financial planning for seniors is trying to figure out much it will cost! The cost will vary on a number of factors. One of them depends on the amount of luxuries you would like to be able to afford.
Another factor (one that you can't control) is how long you will live. It's an unpleasant fact, but most of us have no idea how much life we have left. This needs to be taken into consideration. Don't plan your finances to last you until your 90 because you could live to be 105! It's important that you leave room for surplus. This money can always be passed down to your children or grandchildren (Having a legal will is another important part of financial planning for seniors).
You might want to look into hiring someone who specializes in financial planning for seniors. Often they work will you in creating a plan of action. This isn't for everyone, but it is worth taking into consideration. All in all, if you start planning your retirement now (no matter how old you are) you'll be in a much better position later on in life.
Tuesday, 30 October 2012
Housing market correction 'appears to be under way'
These are stories Report on Business is following Tuesday, Sept. 17, 2012.
By: Michael Babad
Housing correction likely 'under way'A correction in Canada’s housing market “appears to be under way,” led by Vancouver but destined to spread after the government’s new mortgage restrictions, Toronto-Dominion Bank warns today.
“We expect the slowdown will become more broad-based following a fourth round of mortgage insurance regulation tightening by the federal government in July,” economists Craig Alexander, Derek Burleton and Diana Petramala said in a new report that also warns Canada’s economy is “stuck in a soft patch” this year.
This housing correction will weigh on Canada’s over all economic growth, the TD economists added
“For some time now, TD Economics has been warning that the Canadian housing market was overpriced and overbuilt, setting the stage for a gradual correction to take place over the medium term,” they said.
“The tide seems to have finally turned. The combination of market fatigue, stricter lending guidelines for insured mortgages and a deterioration in housing affordability is helping to put the brakes on housing activity.”
They cited the fact that sales and prices in Vancouver have slumped by 31 per cent and 7 per cent, respectively, over the past year.
Of course, Canadian interest rates are expected to remain low well into 2014, so there’s only so far that prices can fall. TD said it still estimates the market is overvalued by 10 per cent.
“The adjustment is expected to occur gradually over the next two to three yars, which should be quite manageable for most Canadian households,” they said.
The market has cooled noticeably. Just yesterday, the Canadian Real Estate Association said home sales slipped 5.8 per cent in August in July. That was the steepest drop since mid-June 2010. And average prices now sit just 0.3 per cent above the levels of a year ago.
There’s mounting evidence that prospective first-time homebuyers in Canada are deciding to keep renting, amid the new mortgage rules and a softer market.
As The Globe and Mail’s Tara Perkins reports, real estate agents and observers are seeing it play out in the market in the wake of the new restrictions.
By: Michael Babad
Housing correction likely 'under way'A correction in Canada’s housing market “appears to be under way,” led by Vancouver but destined to spread after the government’s new mortgage restrictions, Toronto-Dominion Bank warns today.
“We expect the slowdown will become more broad-based following a fourth round of mortgage insurance regulation tightening by the federal government in July,” economists Craig Alexander, Derek Burleton and Diana Petramala said in a new report that also warns Canada’s economy is “stuck in a soft patch” this year.
This housing correction will weigh on Canada’s over all economic growth, the TD economists added
“For some time now, TD Economics has been warning that the Canadian housing market was overpriced and overbuilt, setting the stage for a gradual correction to take place over the medium term,” they said.
“The tide seems to have finally turned. The combination of market fatigue, stricter lending guidelines for insured mortgages and a deterioration in housing affordability is helping to put the brakes on housing activity.”
They cited the fact that sales and prices in Vancouver have slumped by 31 per cent and 7 per cent, respectively, over the past year.
Of course, Canadian interest rates are expected to remain low well into 2014, so there’s only so far that prices can fall. TD said it still estimates the market is overvalued by 10 per cent.
“The adjustment is expected to occur gradually over the next two to three yars, which should be quite manageable for most Canadian households,” they said.
The market has cooled noticeably. Just yesterday, the Canadian Real Estate Association said home sales slipped 5.8 per cent in August in July. That was the steepest drop since mid-June 2010. And average prices now sit just 0.3 per cent above the levels of a year ago.
There’s mounting evidence that prospective first-time homebuyers in Canada are deciding to keep renting, amid the new mortgage rules and a softer market.
As The Globe and Mail’s Tara Perkins reports, real estate agents and observers are seeing it play out in the market in the wake of the new restrictions.
Financial Planning is a great career for Women
Please take a moment to view the attached link. Julia Chapman explains why the business of providing financial planning advice is a great career for women.
http://www.youtube.com/watch?v=K10G339cb5Y&feature=related
http://www.youtube.com/watch?v=K10G339cb5Y&feature=related
Long Term Care Insurance
If you are a typical Canadian then you likely have not considered Long Term Care Insurance. Don't beat yourself up too much on this as it could quite likely be because no one has taken the time to inform you about this valuable insurance protection. However take note, I believe that Long Term Care Insurance is going to become the most sought after insurance need as statistics indicate that we have increased our life expectancy and with that comes other major issues.
What are my Odds of needing Long Term Care?
There's greater than a 70% chance you'll need some sort of long term care after age 65.
Won't my Government and Employer Health Benefits help me?
No, even if you have group benefits and with the excellent provincial health coverage we enjoy, neither are comprehensive enough and chances are that you and your loved ones will end up footing most of the bill.
At IPG Insurance we're working hard to inform more Canadians of this unaddressed need. To help support our advisors we are pleased to announce that one of the most qualified Long Term Care Specialists in Canada has aligned her practice with IPG Insurance. Wendy Black with over 20 years experience in Long Term Coverage is willing to shore up our advisors successful practice by teaming with our advisors, meeting with their clients and educating them on Long Term Care Insurance. If you'd like to connect with Wendy, please contact me at abulloch@joinipg.com
In the meantime, I encourage you to check out our website for more valuable information on long term care insurance: who needs it and how much and when is it necessary. Please visit www.ipginsuranceinc.com product info-long term care.
What are my Odds of needing Long Term Care?
There's greater than a 70% chance you'll need some sort of long term care after age 65.
Won't my Government and Employer Health Benefits help me?
No, even if you have group benefits and with the excellent provincial health coverage we enjoy, neither are comprehensive enough and chances are that you and your loved ones will end up footing most of the bill.
At IPG Insurance we're working hard to inform more Canadians of this unaddressed need. To help support our advisors we are pleased to announce that one of the most qualified Long Term Care Specialists in Canada has aligned her practice with IPG Insurance. Wendy Black with over 20 years experience in Long Term Coverage is willing to shore up our advisors successful practice by teaming with our advisors, meeting with their clients and educating them on Long Term Care Insurance. If you'd like to connect with Wendy, please contact me at abulloch@joinipg.com
In the meantime, I encourage you to check out our website for more valuable information on long term care insurance: who needs it and how much and when is it necessary. Please visit www.ipginsuranceinc.com product info-long term care.
IPG Insurance launches on-line Travel and Health Insurance
As the vast majority of Canadians turn to the internet for research before buying a product and service, we wanted to offer our advisors the ability to take advantage of the immense potential the internet offers.
To quote a Google Canada spokesperson, "we're at the stage where if you're a business, whether it's an independent advisor or any kind of business, a website now is like your calling card. Businesses won't be found if they aren't where customers are looking for them." Their research shows that 86% of Canadian consumers will research product and services online before they buy.
I cannot recall the last time I personally used a phone book instead of just looking through the internet to find "stuff". We want to use the IPG Insurance website as an effective way to bring in new business and to also become a lead generator for our advisors. While the internet will not replace advice giving, you can impart knowledge and experience through the internet.
As you browse through our new website you'll see that we've teamed up with Manulife's Cover-Me, Follow-Me and Travel Insurance client orientated website. In 2011 Manulife's Cover-Me.com client orientated website was awarded the 2011 International Business Award of Best Insurance Website in the world. Cover-Me was recognized for its consumer-friendly quote and application process, knowledge center and client-referral program. You also no doubt have noticed the extensive TV advertisement Manulife does for this product line up.
With the introduction of IPG Insurance website, clients that use our website to purchase these products, Manulife will pay compensation to IPG Insurance. It is our intent when compensation is paid to us, we'll browse our VO client data to identify if the client is one of our advisors and proceed to pass on the commission to that advisor.
In addition IPG Insurance's website has a request for quote section. While as you will see, this will not get the consumer a quote, it will send us their request. When we receive their request to quote, we'll once again review VO to look for any matching advisor, but if none is found we plan to distribute these leads to interested advisors so that they may respond in a timely manner and hopefully turn this lead into a client of theirs.
For more information, please visit www.ipginsuranceinc.com
To quote a Google Canada spokesperson, "we're at the stage where if you're a business, whether it's an independent advisor or any kind of business, a website now is like your calling card. Businesses won't be found if they aren't where customers are looking for them." Their research shows that 86% of Canadian consumers will research product and services online before they buy.
I cannot recall the last time I personally used a phone book instead of just looking through the internet to find "stuff". We want to use the IPG Insurance website as an effective way to bring in new business and to also become a lead generator for our advisors. While the internet will not replace advice giving, you can impart knowledge and experience through the internet.
As you browse through our new website you'll see that we've teamed up with Manulife's Cover-Me, Follow-Me and Travel Insurance client orientated website. In 2011 Manulife's Cover-Me.com client orientated website was awarded the 2011 International Business Award of Best Insurance Website in the world. Cover-Me was recognized for its consumer-friendly quote and application process, knowledge center and client-referral program. You also no doubt have noticed the extensive TV advertisement Manulife does for this product line up.
With the introduction of IPG Insurance website, clients that use our website to purchase these products, Manulife will pay compensation to IPG Insurance. It is our intent when compensation is paid to us, we'll browse our VO client data to identify if the client is one of our advisors and proceed to pass on the commission to that advisor.
In addition IPG Insurance's website has a request for quote section. While as you will see, this will not get the consumer a quote, it will send us their request. When we receive their request to quote, we'll once again review VO to look for any matching advisor, but if none is found we plan to distribute these leads to interested advisors so that they may respond in a timely manner and hopefully turn this lead into a client of theirs.
For more information, please visit www.ipginsuranceinc.com
Retirement Income - How much income will I need?
How much income will I need in retirement? This is a very common question for Canadian’s nearing or entering retirement.
A secure and enjoyable retirement depends on having enough income to maintain your lifestyle. As Canadians are living longer and healthier, the amount of retirement income is probably much higher than you may think.
One of the most important steps in retirement planning is to start early and use a competent financial planner to help you calculate your retirement needs and the level of retirement income.
A proper retirement plan will analyze where you are today from a retirement savings point of view, determine what your retirement life goals are and how much income you’ll need to achieve those goals. Once you know how much retirement income you’ll need, a retirement planner will help you to set up the right saving plan, if necessary, to achieve your income goals.
A proper retirement plan will also take into consideration all government pensions such as CPP, OAS plus all workplace pensions along with personal savings in helping to determine whether a surplus or deficit exists.
There is some good news! At retirement, some of your personal spending may be reduced such as spending for clothing and transportation. Instead of contributing to a public pension, you will take income benefits. Rather than being a saver, you will be a spender.
Financial planners have long believed you should aim at replacing 60% to 70% of your pre-retirement income. But people retiring today are likely to live longer and be more active. Based on industry research, its believed that Canadians should plan on replacing 75% to 85% of their pre-retirement income. The exact amount will vary, depending on factors such as your plans, your living situation and what part of the country you live in. The bottom line is that you will need to assess your own personal situation in order to come up with a replacement income rate that is right for you.
A good place to start is with a qualified financial planner. A financial planner should encourage you to consider a retirement plan process whereby they will collect information from you, complete the calculations/ analysis and present it to you in a written plan. A properly developed written plan can easily take many hours of work for the planner to complete so you may expect to pay a fee to have a written plan developed. A written plan will provide the background calculations that were used to come up with the financial analysis and make recommendations for a comfortable retirement that will meet your objectives.
Beware of…
Many financial institutions may claim to offer a financial plan but they’re usually just an investment analysis of your existing portfolio and an effort to sell you more product and services. You should ask your financial planner to see a sample financial plan. You should also ask the planner to provide testimonials and references from clients that have been through their financial planning process.
The more you know, the better prepared you will be to ensure that your retirement income matches your goals. If you would like to speak to a qualified financial planner, please click on our Need an Advisor page.
A secure and enjoyable retirement depends on having enough income to maintain your lifestyle. As Canadians are living longer and healthier, the amount of retirement income is probably much higher than you may think.
One of the most important steps in retirement planning is to start early and use a competent financial planner to help you calculate your retirement needs and the level of retirement income.
A proper retirement plan will analyze where you are today from a retirement savings point of view, determine what your retirement life goals are and how much income you’ll need to achieve those goals. Once you know how much retirement income you’ll need, a retirement planner will help you to set up the right saving plan, if necessary, to achieve your income goals.
A proper retirement plan will also take into consideration all government pensions such as CPP, OAS plus all workplace pensions along with personal savings in helping to determine whether a surplus or deficit exists.
There is some good news! At retirement, some of your personal spending may be reduced such as spending for clothing and transportation. Instead of contributing to a public pension, you will take income benefits. Rather than being a saver, you will be a spender.
Financial planners have long believed you should aim at replacing 60% to 70% of your pre-retirement income. But people retiring today are likely to live longer and be more active. Based on industry research, its believed that Canadians should plan on replacing 75% to 85% of their pre-retirement income. The exact amount will vary, depending on factors such as your plans, your living situation and what part of the country you live in. The bottom line is that you will need to assess your own personal situation in order to come up with a replacement income rate that is right for you.
A good place to start is with a qualified financial planner. A financial planner should encourage you to consider a retirement plan process whereby they will collect information from you, complete the calculations/ analysis and present it to you in a written plan. A properly developed written plan can easily take many hours of work for the planner to complete so you may expect to pay a fee to have a written plan developed. A written plan will provide the background calculations that were used to come up with the financial analysis and make recommendations for a comfortable retirement that will meet your objectives.
Beware of…
Many financial institutions may claim to offer a financial plan but they’re usually just an investment analysis of your existing portfolio and an effort to sell you more product and services. You should ask your financial planner to see a sample financial plan. You should also ask the planner to provide testimonials and references from clients that have been through their financial planning process.
The more you know, the better prepared you will be to ensure that your retirement income matches your goals. If you would like to speak to a qualified financial planner, please click on our Need an Advisor page.
Critical Illness Insurance provides peace of mind
Imagine you’ve been diagnosed with a serious illness such as cancer or you suffer a heart attack or stroke. Do you have insurance to cover any shortfalls in the income that your family depends on? These days, more and more Canadians are surviving and recovering from the effects of cancer, heart disease or stroke.
Critical-illness insurance provides a lump-sum payment to a policyholder facing cancer, heart attack, stroke and a range of other maladies that varies by contract. The policyholder can use the money for any purpose whatsoever from paying for special treatments or medications to supplementing any lost income during the illness.
It was created almost 30 years ago by the renowned heart surgeon Marius Barnard, who worked on the first human heart transplant with his brother, Christiaan. He became so frustrated watching patients’ financial struggles as he treated them that he convinced insurance companies in his native South Africa to create a product.
Unlike disability insurance, critical illness pays out almost immediately, once the recipient survives the first 30 days.
Most disability contracts don’t pay out for 120 days, and even that depends on the insurance company’s adjudicator, who determines the validity of the claim.
The price of critical-illness insurance has risen over the last five years, by at least 25 per cent. A healthy man in his forties can expect to pay about $100 a month for a contract today, compared with about $80 in 2006.
It’s important to work within your budget when choosing critical-illness insurance. Here are some of the ways to keeping costs down:
* Ask your employer if your company benefits package includes critical illness coverage.
* Look at smaller coverage amounts. There’s no use getting a policy you are not going to be able to afford to keep.
* Buy early. The price rises about 8 per cent for every year an individual doesn’t lock in a contract. Prices become prohibitive once someone hits their late 50s, almost doubling from what they would be for someone in their late 40s.
* Finally, be sure to deal with an independent broker that can shop the market and deal with many critical illness providers. This will help you get the most cost effective pricing and insurance.
Critical-illness insurance provides a lump-sum payment to a policyholder facing cancer, heart attack, stroke and a range of other maladies that varies by contract. The policyholder can use the money for any purpose whatsoever from paying for special treatments or medications to supplementing any lost income during the illness.
It was created almost 30 years ago by the renowned heart surgeon Marius Barnard, who worked on the first human heart transplant with his brother, Christiaan. He became so frustrated watching patients’ financial struggles as he treated them that he convinced insurance companies in his native South Africa to create a product.
Unlike disability insurance, critical illness pays out almost immediately, once the recipient survives the first 30 days.
Most disability contracts don’t pay out for 120 days, and even that depends on the insurance company’s adjudicator, who determines the validity of the claim.
The price of critical-illness insurance has risen over the last five years, by at least 25 per cent. A healthy man in his forties can expect to pay about $100 a month for a contract today, compared with about $80 in 2006.
It’s important to work within your budget when choosing critical-illness insurance. Here are some of the ways to keeping costs down:
* Ask your employer if your company benefits package includes critical illness coverage.
* Look at smaller coverage amounts. There’s no use getting a policy you are not going to be able to afford to keep.
* Buy early. The price rises about 8 per cent for every year an individual doesn’t lock in a contract. Prices become prohibitive once someone hits their late 50s, almost doubling from what they would be for someone in their late 40s.
* Finally, be sure to deal with an independent broker that can shop the market and deal with many critical illness providers. This will help you get the most cost effective pricing and insurance.
What is a true Independent Financial Planner
Independent Financial Advisors are professionals who offer independent advice on financial matters to their clients and recommend suitable financial products and services from a wide range of suppliers.
The Canadian financial services industry has many types of individuals that call themselves financial advisors but depending on the services they offer and the organizations they represent, many cannot call themselves truly independent.
A truly independent financial advisor is an individual that is not bound or motivated by quotas, minimum desk production and other production targets that may result in exotic trips and prizes for the advisor or conversely, immediate dismissal if targets are not reached. As well, an independent financial advisor must have access to a very broad shelf of products and services so that they can easily “shop the market” for the best possible option for their clients.
Some financial service organizations aggressively recruit their own sales force of advisors to promote only the organization’s limited product shelf. Having access to 3rd party products and services is not allowed and discouraged. These organizations typically encourage their sales force to promote the company’s most profitable products and tie incentives to reaching specific targets. It is comparable to walking into a Loblaws Superstore to see that thousands of 3rd party products have been removed from their shelves and only No Name products are offered. While No Name may offer good value, they may not always be the best choice!
Do Professional Designations Matter?
Yes, professional designations such as the Certified Financial Planner (CFP) do matter and demonstrates that the advisor has the knowledge to create and monitor a financial plan. However, the fewer product and service options that a CFP has means that their client may not receive the best features and pricing to the solutions recommended.
The Perfect Independent Financial Advisor
In my opinion, the perfect independent financial advisor would be an advisor that holds a professional designation such as CFP and demands that all new clients receive a written financial plan. The perfect advisor would hold more than one industry license such as a life insurance license, mutual fund license or securities license. Multiple licenses would allow them to shop the investment and insurance market for the best possible options to meet the client’s needs.
As an example, if a written financial plan presents a need for the client to obtain life insurance, disability insurance and set-up a monthly investment plan to save for retirement or a rainy day, then these products must be “shopped around” by the advisor to ensure that the most comprehensive and cost effective insurance is purchased and the best money managers are selected based on risk tolerance and other objectives. Rarely would any one company have the best solution available for each distinct product offering.
The perfect independent financial advisor would have access to a large variety of money managers, insurance companies, banks and other financial institutions such as investment counselors. Depending on the size of an investment plan, my perfect independent financial advisor would work with other 3rd parties as my “quarter-back” to find alternatives for my specific needs.
The perfect independent financial advisor would be associated with suppliers, investment dealers and brokers that would respect their independence and allow the independent financial advisor to own their book. Many organizations do not permit an advisor to own their client base and must leave their clients behind if they leave the organization. These individuals are purely “renting” client relationships rather than having a long term ownership stake in the well being of their clients. I think you would agree that an owner takes a greater pride in their work than a renter would.
Lastly, my perfect independent financial advisor would provide me with an engagement letter or document to help me understand any fees, commissions or charges that I would be faced with. With transparency in any relationship comes trust and I would rather work with my advisor knowing that all avenues and options have been explored rather than question their integrity and have doubts that my financial future is not properly safeguarded.
In my past 20 plus years as the president of Independent Planning Group Inc., we have developed an environment where financial advisors can be truly independent and offer unbiased advice. We have promoted the benefits of comprehensive financial planning to all of our independent associates and encourage them to offer this important service to their clients.
The Canadian financial services industry has many types of individuals that call themselves financial advisors but depending on the services they offer and the organizations they represent, many cannot call themselves truly independent.
A truly independent financial advisor is an individual that is not bound or motivated by quotas, minimum desk production and other production targets that may result in exotic trips and prizes for the advisor or conversely, immediate dismissal if targets are not reached. As well, an independent financial advisor must have access to a very broad shelf of products and services so that they can easily “shop the market” for the best possible option for their clients.
Some financial service organizations aggressively recruit their own sales force of advisors to promote only the organization’s limited product shelf. Having access to 3rd party products and services is not allowed and discouraged. These organizations typically encourage their sales force to promote the company’s most profitable products and tie incentives to reaching specific targets. It is comparable to walking into a Loblaws Superstore to see that thousands of 3rd party products have been removed from their shelves and only No Name products are offered. While No Name may offer good value, they may not always be the best choice!
Do Professional Designations Matter?
Yes, professional designations such as the Certified Financial Planner (CFP) do matter and demonstrates that the advisor has the knowledge to create and monitor a financial plan. However, the fewer product and service options that a CFP has means that their client may not receive the best features and pricing to the solutions recommended.
The Perfect Independent Financial Advisor
In my opinion, the perfect independent financial advisor would be an advisor that holds a professional designation such as CFP and demands that all new clients receive a written financial plan. The perfect advisor would hold more than one industry license such as a life insurance license, mutual fund license or securities license. Multiple licenses would allow them to shop the investment and insurance market for the best possible options to meet the client’s needs.
As an example, if a written financial plan presents a need for the client to obtain life insurance, disability insurance and set-up a monthly investment plan to save for retirement or a rainy day, then these products must be “shopped around” by the advisor to ensure that the most comprehensive and cost effective insurance is purchased and the best money managers are selected based on risk tolerance and other objectives. Rarely would any one company have the best solution available for each distinct product offering.
The perfect independent financial advisor would have access to a large variety of money managers, insurance companies, banks and other financial institutions such as investment counselors. Depending on the size of an investment plan, my perfect independent financial advisor would work with other 3rd parties as my “quarter-back” to find alternatives for my specific needs.
The perfect independent financial advisor would be associated with suppliers, investment dealers and brokers that would respect their independence and allow the independent financial advisor to own their book. Many organizations do not permit an advisor to own their client base and must leave their clients behind if they leave the organization. These individuals are purely “renting” client relationships rather than having a long term ownership stake in the well being of their clients. I think you would agree that an owner takes a greater pride in their work than a renter would.
Lastly, my perfect independent financial advisor would provide me with an engagement letter or document to help me understand any fees, commissions or charges that I would be faced with. With transparency in any relationship comes trust and I would rather work with my advisor knowing that all avenues and options have been explored rather than question their integrity and have doubts that my financial future is not properly safeguarded.
In my past 20 plus years as the president of Independent Planning Group Inc., we have developed an environment where financial advisors can be truly independent and offer unbiased advice. We have promoted the benefits of comprehensive financial planning to all of our independent associates and encourage them to offer this important service to their clients.
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