Susan Creasy Financial Inc.

Don’t Be Caught

Unprepared

SUSAN CREASYF I N A N C I A L Inc.

Emotions and Ignorance = Financial Illiteracy

2 out of 3 Canadians will fail to realize one or more of their important life goals because they have no financial plan

Money is still a mystery…a taboo Greed and Fear lead to emotional

financial planning Lack of knowledge leads to fear and

mistakes For seniors it is critical that you have

proper planning so you ensure you do not outlive your money

SUSAN CREASYF I N A N C I A L Inc.

Costly Financial Mistakes

Living on more than you make- Income reductions as senior vs. in your working years

Buying newer, bigger and better than you can afford or need now

Taking money from your RSP’s early if you are not yet retired

No emergency fund No Savings Not having a budget that you stick to!

SUSAN CREASYF I N A N C I A L Inc.

Seniors need help and sound advice

Too many financial products and choices available today

Drowning in financial information from a variety of sources – how can you stay on top of things

Insurance and Investment issues and needs change as we age “problems with Term Life insurance”

How do you determine what to believe and then what to do with that knowledge

SUSAN CREASYF I N A N C I A L Inc.

Where are you getting your advice

Many people are getting bad advice from un-educated and uniformed people who are not keeping their information current- Friends and media

Some advisors tell clients what they want to hear not what is the reality

Not using a well informed educated and designated advisor to assist you in your planning

SUSAN CREASYF I N A N C I A L Inc.

When I was young, I thought I would live forever…

Now I am afraid that I might!

SUSAN CREASYF I N A N C I A L Inc.

Seniors issues

Snowbirds- tax and medical needs Health issues- Sudden and chronic Possible long term care needs Estate planning- trillions of dollars in

intergenerational transfer Outliving my money Emergency needs for cash Who gets the cottage? The business?

SUSAN CREASYF I N A N C I A L Inc.

Loans to Family

A recent study shows 64% of Canadians have loaned or borrowed more than $500.00 from friends or family

Needs to be well documented in writing to avoid estate problems between other heirs.

SUSAN CREASYF I N A N C I A L Inc.

Joint Ownership – Pros and Cons

Pros– No probate fees

will be payable with respect to asset on death

– Ease of transfer their survivor will not experience any delay in receiving the asset on death

– The asset is removed from the scope of will Variation Act in British Columbia

Cons– Loss control over the

asset– Possible triggering of

immediate tax consequences such as a capital gains or property transfer tax

– Possible future tax consequences if for example asset is a principle residence transferred to a child.

– Exposure of asset claims made against joint owner from creditors or even spouses on marriage breakdown

SUSAN CREASYF I N A N C I A L Inc.

Tax-Free Savings Account

Individual > @18 but not a trust Accumulated $5,000/yr contribution room.

– Excess contribution subject to 1% tax/mo.– Non-deductible deposits versus RRSP’s.– Contributions grow tax-free, no tax implications at

withdrawal.– May name a beneficiary if invested with a Life

Insurance Company.– May use various investments i.e.. GIC’s, Stocks,

Bonds and Investment Funds– Opportunity to transfer wealth between generations

SUSAN CREASYF I N A N C I A L Inc.

Tax-Free Savings Account

Individual > @18 but not a trust Accumulated $5,000/yr contribution room.

– Excess contribution subject to 1% tax/mo.– Non-deductible deposits versus RRSP’s.– Contributions grow tax-free, no tax implications at

withdrawal.– May name a beneficiary if invested with a Life

Insurance Company.– May use various investments i.e.. GIC’s, Stocks,

Bonds and Investment Funds– Opportunity to transfer wealth between generations

SUSAN CREASYF I N A N C I A L Inc.

Tax-Free Savings Account

Income, losses, gains, withdrawals not included in:– income tax calculations– determining income-tested benefits or

credits• OAS• GIS (Guaranteed Income Supplement)• Child Tax Credit• GST credit• Employment Insurance Benefits• Age credit

SUSAN CREASYF I N A N C I A L Inc.

Life Insurance – A Planning Tool!

Joint Life, last to die plans are cost effective

Pays income tax at death from disposition of an asset(e.g. family cottage/investments)

To equalize an estate – if one child is left a property, business, farm, the other child can be treated equally with tax free death beneficiary from Life Insurance

To pay income tax at death on a RRSP/RRIF if there is no spouse or minor children

SUSAN CREASYF I N A N C I A L Inc.

Insured Annuity

Provides an attractive alternative to today’s low, fixed income investments and GIC’s

Tax efficient, lifetime income and preserves or increases the original capital for the estate.

Prescribed annuity provides lifetime income A life insurance policy preserves the capital Maintenance free, no ongoing investment

decisions are needed to maintain lifetime income

With named beneficiaries, the capital passes directly to your heirs, without probate, legal fees or delay!

SUSAN CREASYF I N A N C I A L Inc.

Example: Male and Female age 70 Non-Smoker

$200,000 Joint Last Survivor Life Annuity $ 13,340• Taxable portion $ 2,977• Less tax @ 35% $ 1,041• Less premium for Life Insurance $ 3,750

– NET Income for Life $ 8,549

– Net Rate of Return 4.3%– Equivalent Before Tax Rate of Return 5.8% (average 10 GIC rate 2.75%)

– At death $200,000 tax free is returned

to your estate!

SUSAN CREASYF I N A N C I A L Inc.

THANK YOU !

Susan Creasy Financial Inc.