Canadians don’t understand CPP, OAS

Posted by Ravi Gulati | Posted in Financial Planning | Posted on 02-03-2014

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More than two-thirds 69% of people near retirement are unaware of what the maximum monthly payout is for CPP, Quebec Pension Plan and Old Age Security, yet more than 80% of them say they plan to use these programs as a source of retirement income, and more than 33% anticipate this will be their primary source

In addition, 66% of Canadians are less confident in governments’ ability to continue to provide an acceptable level of pension and retirement benefits.

vCanadians don’t understand CPP, OAS | Advisor.ca.

Warren Buffett’s lessons from long ago real estate investments

Posted by Ravi Gulati | Posted in Financial Planning | Posted on 02-03-2014

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The billionaire uses two personal real estate investments to demonstrate some of his key principles: focus on what an investment will produce, not its price; stick to what you know; and don’t try to predict what the economy or stock market will do.

“You don’t need to be an expert in order to achieve satisfactory investment returns. But if you aren’t, you must recognize your limitations and follow a course certain to work reasonably well,” Buffett wrote. “Keep things simple and don’t swing for the fences. When promised quick profits, respond with a quick ‘no.’”

via Warren Buffett’s lessons from long ago real estate investments | Toronto Star.

RRSP not needed for these newcomers

Posted by Ravi Gulati | Posted in Financial Planning | Posted on 25-02-2014

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Don and Fiona moved to Canada from Ireland 10 years ago. Don was able to land a high-paying position as a business consultant earning $170,000 a year. Fiona earns $17,000 working part-time.

Even so, at ages 48 and 51, they are coming to retirement savings at a late date. Don will receive a $200,000 lump sum Irish pension at age 65, or a $140,000 survivor benefit for Fiona if he dies before then. He is currently paying into a non-indexed pension plan at his company and has $17,000 in a Tax Free Savings Account…………….

Don and Fiona have a mortgage of $283,000 on a Toronto home valued at $550,000. They expect to have it paid off in 10 years.

First up is maximizing Don’s TFSA so that $458 a month goes into it. This will ensure he hits the $5,500 a year allowed under the federal plan.

Another $300 a month should go into a non-registered investment account. Finally, they should contribute $416 a month to a Registered Education Savings Plan (RESP) for Kate. The remaining $201 can be used to top up some life insurance coverage for Don.

As for their daughter’s education, the advisors recommend that Don and Fiona immediately open up an RESP. Since Kate is 13, they only have four years to build up the plan and receive Canada Education Savings Grants to the tune of 20 per cent. If the couple contributes $5,000 each year, that would allow them to get the maximum $1,000 grant.

RRSP not needed for these newcomers | Toronto Star.

More Canadians expect to work full-time in retirement

Posted by Ravi Gulati | Posted in Financial Planning | Posted on 19-02-2014

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More Canadians expect to be working in their mid-60s because they will need the money, according to an annual survey commissioned by Sun Life Financial.

Nearly three in 10 Canadians, 27 per cent, said they expect to be working full-time at age 66, shortly after the traditional retirement age. That’s up from 26 per cent last year and a sharp increase from 16 per cent in 2009.

More Canadians expect to work full-time in retirement | Toronto Star.