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"Protect your wealth"


New Partnership with Canada's largest insurer!

I am pleased to announce that I have recently partnered with Manulife.  This new partnership allows me access to more products that can be helpful to your financial futures.  These products include Health & Dental plans, Travel Insurance, and a comprehensive RESP product.

Do I need term insurance or permanent insurance?  

Here is a quick guideline to show if your needs would be best suited towards a permanent insurance solution, or a term insurance policy.  This is to be used as a guideline only, and you should talk with your advisor before making a final decision.

How much will you get from Canada Pension Plan in Retirement?

Canada Pension Plan (CPP) is one of the cornerstones of retirement income planning. Here are the maximum benefits at age 65:

  • 2014 – $1038.33 per month
  • 2013 – $1012.50 per month
  • 2012 – $986.67 per month
  • 2011 – $960.00 per month
  • 2010 – $934.17 per month
  • 2009 – $908.75 per month
  • 2008 – $884.50 per month
  • 2007 – $863.75 per month
  • 2000 – $762.92 per month
Don’t count on the maximum

When planning for retirement, the first piece of advice I give is not to plan on getting the maximum. When you look at the average payout of CPP, it’s just a little over $550 per month, which is a long way from the maximum. In other words, not everyone gets the maximum. At the most basic level, the amount you get from CPP depends on how much you put into CPP.

The best way to figure out how much CPP you qualify for is to get your CPP statement of contributions. Call Service Canada 1-800-277-9914 and ask for a CPP Statement of Contributions. They will provide you with access to your online statement.

How to get the maximum?

Why is it that so many people do not qualify for the maximum amount of CPP? The best way to answer that is to look at how you get the maximum retirement benefit. Eligibility to receive the maximum CPP benefit is based on meeting 2 criteria:

  1. Contributions – The first criteria is you must contribute into CPP for at least 85% of the time that you are eligible to contribute. Essentially, you are eligible to contribute to CPP from the age of 18 to 65, which is 47 years. 85% of 47 years is 40 years. Thus, the way I like to look at CPP is on a 40-point system. If you did not contribute into CPP for at least 39 years between the ages of 18 to 65, then you won’t get the maximum. If so, then you might get the maximum but there is another consideration.
  2. Amount of contributions – Every year you work and contribute to CPP between the age of 18 and 65, you add to your benefit. To qualify for the maximum, you must not only contribute to CPP for 40 years but you must also contribute ‘enough’ in each of those years. CPP uses something called the Yearly Maximum Pensionable Earnings (YMPE) to determine whether you contributed enough. Here’s the YMPE figures for the current and past years:

    • 2014 – $52,500
    • 2013 – $51,100
    • 2012 – $50,100
    • 2011 – $48,300
    • 2010 – $47,200
    • 2009 – $46,300.
Basically if you make less than $52,500 of income in 2014, you will not contribute enough to CPP to qualify for a point on the 39-point system. For those of you that make more than $52,500, you will probably notice that part way through the year, your paycheques will go up a little. This happens because you have paid the maximum amount of CPP for the year and no longer have a CPP deduction.
As you can see, it’s not easy to qualify for full CPP especially with the trend of people entering into the workplace later because of education and people retiring earlier.

The easiest way to figure out your CPP eligibility is simply get your CPP statement of contributions. Once you have that document, it will list all the years you are eligible to contribute from age 18 to 65. It will show you how much you contributed in each of those years. If you contributed the maximum, it will have the letter ‘M” assigned for that year. All you have to do is add up all the M’s to see if you are eligible for the maximum. If you have 39 M’s you’ll get the maximum. If you have 20 M’s you will get approximately half the maximum (you might get some partial credits for part years).

Planning your retirement needs and income requires some understanding of how much you will get from CPP. Many people either assume they will get the maximum or assume they will get nothing at all because they fear the benefit may not be there in the future. Both these assumptions have significant flaws. Take the time to personalize the planning by understanding how the CPP benefit is calculated and how much you will receive.

July 25th, 2013

Why you should own your Mortgage Insurance instead of your bank.

There are several reasons you should own your own Mortgage Insurance policy rather than buying what the bank offers you.  

Mortage insurance through a bank decreases in value as you pay down your mortgage...but the price stays the same!  If something were to happen 3 months before your last mortgage payment...the pay out will be next to nothing.  A personally owned policy does not decrease in value over time, so any extra proceeds can be used at your beneficiary's discretion.   You may also elect to change your coverage to reduce your payment every 10 years so you are only paying for the coverage you require.

While the above may be enough reason already to consider a personally owned product, this is the most important difference between a bank's policy and a personally owned policy.  Underwriting.  A bank's approval system for the mortgage insurance is actually only approval to start paying the premiums for the coverage.  It is not until there is a claim (upon passing) that the banks will go and investigate every possible angle to try not to pay!  Some examples of the lengths some institutions go through not to pay are extremes...but they do illustrate the problem accurately.  One of the questions that was likely asked during your approval was something like 'have you had any analaysis, test, or investigation into your blood pressure, circulatory system etc.?'.  In order to be accepted, and to the best of your knowledge, you probably selected 'No'.  Do you donate blood?  If you have had all of the above tested and investigated...and that can void your policy.  You will have all the premiums you paid returned to your estate, but the mortgage will still be owed.

All the products I work with do their underwriting before the policy is even approved.  This means you will have already disclosed all of the information the insurer needs to decide if you are eligible for the coverage.  Once you are approved, you are guaranteed to be insured for as long as you continue to pay your premiums.  This often comes at a better price for healthy adults as well, as the company has made the calculations necessary to give you the best deal possible.