What if life insurance could inspire you to live your best life? We often think of making healthy choices as something that only benefits us in mind and body, but that can even translate into financial benefits these days. Consider this: choosing to be active and making healthy food choices can help you lower your “vitality age.” Not only will you feel better — and younger! — but this also puts you in an entirely new bracket when it comes to insurance policies.
I offer Manulife Vitality as a life insurance policy option for its overall wellness benefits. The personalized program is designed to help you make the most of your life — while you’re still living it. It quantifies your “vitality age” through a few simple questions that address your overall health, and then gives you an action plan on how to improve it. This includes daily tips and suggestions, as well as a free wearable activity tracking device and mobile app so you know how you’re building healthy habits. That’s encouragement and support that’s easy and fun to use, right in your pocket.
The Manulife Vitality program works with you to increase your “vitality status” which translates into discounts on next year’s premiums, among other benefits. Manulife Vitality helps you Live Healthy, Earn Rewards, and Save Money. For the first time, your life insurance could reward you for living well!
That’s something we can all appreciate in the modern age of too much screen time, crazed schedules, and other pressures. Health matters, and needs to be a focus instead of a byproduct of lifestyle. If the Manulife Vitality program sounds like it could be the incentive you need to live healthier — sometimes, we all work better with a goal tracker! — then please contact me or your financial advisor to discuss your life insurance options and if this product is appropriate to help you with your lifestyle and financial planning goals.
Please don’t hesitate to leave a comment below and tell me about your financial or investment questions! If you live in British Columbia, and have a question about this topic or on other financial matters, you can connect directly with me via email.
***This content was prepared by Taayla Mark, a Financial Advisor with Engrace Financial Solutions Inc. This information has been obtained from sources we believe are reliable but is not guaranteed and may be incomplete. Please note the information contained herein is not tailored to any one individual and is general in nature. For specific recommendations, please consult directly with Taayla Mark.***
https://engracefinancial.com/wp-content/uploads/2019/06/manulife-vitality-life-insurance-engrace-financial.jpg7201280Taaylahttps://engracefinancial.com/wp-content/uploads/2017/07/main-logo-300x98.pngTaayla2019-06-05 13:55:322019-06-05 14:02:07How Life Insurance Can Take Your Wellness to a Healthier Level
If you’re new to investing, then you’re in the right place.
Let’s learn about financial matters that relate to our day-to-day lives, and prepare for the bright future ahead. In the latest Street Smarts with Taayla video, we’ll get you started with a few investment basics.
Conservative and risky investments
When you are looking for investments to grow your money, there are many options to consider. On one hand, you could choose a safe, conservative investment approach with GICs, Guaranteed Interest Certificates. Or, you could choose a strategy that’s more risky, with potential for a bigger payoff: investing in securities, or the buying and selling of individual stocks.
While GICs are guaranteed to protect your investment, the payoff is usually limited. Plus, if your savings aren’t keeping up with inflation, you’re actually losing money because you’re losing that spending power!
However, individual stocks represent company ownership, and the whims of that stock can dramatically jump or fall in value within a short period. You’re at the mercy of a volatile market, and chances are, by the time you hear news about your investment, it will be too late to act effectively.
Not sure which to choose? Maybe you’re like Goldilocks, and the best fit for you is somewhere in between these two options: mutual funds.
Mutual fund investments
In terms of risk, a mutual fund is a middle ground between investments in GICs and investments in stocks. They’re an assembly of stocks, bonds, and other instruments gathered under one umbrella to be managed by a portfolio manager within a professional investment company.
You, as the unit holder, share the buying power of the fund, while also receiving diversification in ways that you would normally be unable to get alone.
Mutual funds are a great option for those who want to adjust the risk, and payoff, of their investment as they go. Since there are no protections like with GICs, you can still lose money, but the risk is mitigated through the fund’s diversity.
With this investment, you rely on the experience and insight of the portfolio manager to buy and sell within the fund. Ideally, you should know who this person is, and understand their background, style, and history in the industry. While it’s your responsibility to research the mutual funds, it can be intimidating to analyze the 20,000-plus different funds available in Canada.
Where to go for help with your investments
You might receive advice from your neighbour or uncle, or overhear your coworker bragging about his successful investments, but it’s wise to find someone who will look out for you with their knowledge and expertise: a financial advisor.
To find a financial advisor, you can start with your bank. While financial advisors are easily accessible, those inside a bank are usually limited in the funds they can offer. But if you plan to invest more than $250,000, you may get access to the upper echelon of bank advisors who can provide better service with more options.
An alternative solution would be to find a financial advisor who is also a broker. These advisors are independent, and have access to the majority of mutual funds on the market. They tend to focus on fund companies they work with or are most knowledgeable of. Due to their wealth of knowledge, these brokers will be able to explain in depth the credentials of the mutual funds they are recommending and why they are the best fit for you.
Finding the right support takes time and patience. It’s OK to meet with multiple professionals; in fact, it’s encouraged! You should weigh your options and see which styles and personalities of the advisor best fit your needs. Prepare a list of questions to ask each of them, and compare their answers. Make sure they clearly explain how their fees are set up and how their practice is structured.
Look for someone that listens to you, respects your wishes, and explains things in a way that makes sense for you. Clear communication is essential to your success.
With proper guidance and clear communication, getting started in your investment journey is much easier than you might believe.
Thank you for following along as we break down the steps for getting started with investing. Get in touch with me in the comments section or directly through email. I would love to be a resource for you and be a part of your financial advising team.
Please make sure to like and share my video, and subscribe to my channel if you have yet to do so. That way, I can get new exciting topics to you each month!
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Benjamin Franklin once said, “In this world, nothing is for certain except for death and taxes.”
In a previous video, we talked about being financially prepared in the event of a death, but in my latest Street Smarts with Taayla episode, we’ll talk some Canadian tax basics.
Taxes are a subject that none of us want to talk about, but with these tips, we can get through it together.
How does Canada’s graduated income tax system work?
In Canada, we have a graduated income tax system, which means that the more money you earn, the more taxes you pay.
Income taxes consist of two parts: the federal tax, which is the same for everyone, and the provincial tax, which depends on where you live.
To determine the taxes you would be paying on your income at different levels and brackets, you can use the marginal tax rate.
At the lowest income level or bracket, you pay $0 in taxes because your income is below what’s called the “personal amount.”
Think of a high school student working a part-time job and making less than $11,000 per year.
For 2018, in British Columbia, a combined marginal tax rate for federal and provincial taxes is just above 20 percent. That means, for every dollar this high school student earns above the personal amount, they have to pay 20 cents to the Canada Revenue Agency in tax. That tax rate is applied until their income climbs up to the next income bracket, where a new tax rate for their new bracket is then applied.
The highest combined federal and provincial tax rate in British Columbia is currently 49.8 percent for those in an income bracket of over $200,000 per year.
However, there are a few different methods we can use to offset the taxes we pay as our income grows.
What are some common tax preparation mistakes that you see?
One of the most common mistakes is in regards to foreign asset reporting. Most people are just confused about what that means, and when to report it. Basically, if your foreign asset is costing you more than $100,000, you will have to report it. Foreign assets that you own outside of Canada, such as a bank account or vacation property, will have to be reported.
What is the difference between a tax deduction and a tax credit?
A tax deduction is a reduction against taxable income. The amount of savings that you receive will depend on your personal marginal tax rate. For example, a $1,000 deduction with a 30 percent margin, will give you $300 in tax savings.
A tax credit, on the other hand, is a dollar-for-dollar reduction against the tax liability you owe. For example, if you receive a $1,000 tax credit, you will get the $1,000 directly against the tax that you owe.
Is there a “superhero” tax credit?
Yes! Charitable donations in Canada give you a pretty good tax credit. For any donations you make to charitable organizations, for the first $200, the credit you get will be for the lowest marginal rate. Anything after that will be for the highest marginal rate; for 2018, that’s close to 50 percent. For example, if you make $1,000 in donations, the amount you will receive in tax credits will be around $400.
What is the typical tax deduction available for employees?
For employees, the tax deduction is quite limited. The most typical deduction is for an RRSP or the Registered Retirement Savings Program.
Due to the restrictions in having an RRSP, what would be an optimal income level for one to start at?
It depends on the individual’s tax situation and on the retirement tax rate at the retirement age. It also depends on the individual’s discipline to save or not. RRSP is a program put in place by the government to defer your current income and pay tax into the future. In my opinion, any time you have the opportunity to defer tax, you should.
The tax deduction for employees is limited. But if you’re self-employed, a lot more deductions are available to offset against the business income. For example, any rent or upgrades to your business space or home office, wages paid to your employees, office supplies, transportation costs, or even meal you took your clients to, are all deductible against your business income.
Please like and share my videos, it lets me know when I’m doing things right! If you have not subscribed to my channel, please do so now and I will bring more segments and topics to you each month.
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Are you thinking about your retirement and wondering if an RRSP is right for you? In the latest Street Smarts with Taayla video, we’ll dig deeper into this question and find a solution that works for you.
What is an RRSP?
If you’re unfamiliar with or new to RRSPs, you’re not alone! An RRSP, or Registered Retirement Savings Plan, is one of the most commonly misunderstood types of investment accounts.
My clients will ask me if an RRSP is right for them, and as much as I’d like to give a simple “yes” or “no,” I usually tell them it depends — because it does!
How to know if an RRSP is right for you
Before I can know if an RRSP is the right choice for you, I need to know five key things about you: your age, income, first home, education, and emergency funds.
When to take advantage of RRSP savings
An RRSP can be an excellent tax savings and a great way to save for retirement. However, if you’re under the age of 30, chances are you’re not at an income state where you can best take advantage of the RRSP savings.
Because when you make less money, you’re also paying little to no income taxes. If you wait until your earning increases before you contribute to your RRSP, then the potential to save on your taxes could be higher than they are now.
While I don’t usually recommended having an RRSP for incomes under $50,000, if you do decide to contribute to one, you don’t have to claim the plan on your taxes for the current year — you can carry it forward indefinitely.
For example, if your income is $20,000 today, and you believe your income will continue to increase over time, then start saving in your RRSP today. Just make sure to wait until you are at a higher marginal tax rate before you apply your RRSP against your income, whether that’s next year or somewhere down the road.
How to use an RRSP to reach your goals
In my previous video on RRSPs, I talk about how you could use your RRSP toward the down-payment of your first home, or toward the cost of a full-time education. While RRSPs are an investment account for your retirement, there are many benefits to utilizing your RRSP sooner rather than later.
The last thing to consider when deciding if an RRSP is right for you, is the status of your emergency fund. If you have little to no emergency fund, then establishing a solid fund should be your first priority!
Fill your emergency fund before your RRSP, because an RRSP cannot protect you quite like an emergency fund can. While you can withdraw money from your RRSP, there are tax consequences for doing so.
I recommend to my clients to keep an emergency fund worth at least three months of their salary — ideally six months.
Let’s think about this scenario: you have accumulated $30,000 in your RRSP and now you have an emergency where you need cash quickly. You decide to take out the $30,000, but what you don’t realize is that when you do that, 30 percent is being withheld. Now you only have $21,000 you can use!
You would then have to include the $30,000 withdrawal from your RRSP in your income taxes for the year. So if your standard income for the year was, say, $50,000, and you added the $30,000 to that, your income tax return would then be based off $80,000 — a much higher marginal tax rate.
RRSPs are meant to be withdrawn from strategically, and in emergency, you don’t have time to plan for that.
Thank you for reading along in my latest post. I hope this dive into RRSPs has been helpful in allowing you to decide whether or not an RRSP is right for you.
Ask me questions in the comments section below, and let me know what other savings vehicle you are using for your retirement. I’d love to learn more!
Please like and share my videos, it let’s me know when I’m doing things right! If you have not subscribed to my channel, please do so now so I can get more segments and topics to you each month.
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Our finances can define who we are, but in the latest two-part Street Smarts with Taayla video, we’ll show you how you can use a personal mission statement to determine for yourself who you want to be.
Right now, you’re at the beginning of a journey, a journey to who you want to become.
If your future self is the destination, think of a mission statement as the map to guide you there. A mission statement, much like a roadmap, helps you, and others, determine how you will achieve your goals and make it to where you want to go.
You’ve no doubt seen businesses and organizations use statements of purpose to communicate what it is that they do, and you’ve probably felt moved by some, and turned off by others. However, a well-written mission is more than just the clever marketing of a successful business, it’s the key to individual success as well.
Only you can define who you are, and by taking the time to carefully do so, you’ll come out ahead feeling ready to grow and succeed.
A personal mission statement is a critical step in achieving future success.
Mission statements help you understand who you are, where you’re going and why you’re going there. By imagining your path to personal growth before you begin your journey, you can create a plan that is clear and effective. This visualization will help you make critical assessments of where you are now and where you want to be, and ideally, provide the roadmap to do so.
Pick up a pen and ask yourself: What’s my story? Who am I as a child, parent, or friend? How do I want to be remembered? What will be my legacy?
While these questions for self-reflection may seem big or vague, oftentimes, we already know their answers. Write them down without doubt and judgment, however they flow through your mind. The things we like to do, the people we like to spend time with — thoughts like these guide the mission statement-writing process.
As you continue planning the map of your vision, choose a couple trustworthy people in your life and ask them for an opportunity to provide you with honest feedback about yourself, your values, and your ambitions.
Find the recurring themes between their insights and yours, and use this to create a rough draft of your mission statement. Try to be concise in the message you want to convey, and write this future self in the present tense. It doesn’t have to be in a certain format for now; the focus of this exercise is to learn more about yourself so you can create the foundation for defining you.
Enjoy getting to know yourself, and celebrate your unique path.
I would love to learn more about you, so please feel free to use the comment section below to share with us your mission statement-writing experiences.
If you’re not physically present to protect your business, who is? In the latest Street Smarts with Taayla video, I explain your options that allow you to protect your business by using life insurance.
Financial planners are always considering the possible risks to your business, and assessing how to best manage those risks with insurance. Here’s how life insurance can serve as a solution, in four ways.
“Key Man” Insurance
This is important in the case that your key person is not able to be there for your business, and their absence affects productivity and profit margins. This insurance covers the key man whether it’s you, the business owner, or your valuable employee or employees? Life insurance on this crucial person or persons will help cover the loss of revenue as well as the cost to re-train a replacement worker.
Securing Bank Credit
In many cases, banks require the principal of the company to be covered with life insurance to secure a loan. This is like key man insurance –but from the bank’s perspective.
Funding for A Buy-Sell Agreement
A buy-sell agreement, otherwise known as a buyout agreement, is a legal written document stating how its stakeholders are to conclude business in the event of death or a leave of absence. When death occurs to one of the partners or shareholders there is usually a typical need for immediate cash to fulfill the terms of the buy-sell agreement. This is when a life insurance policy comes into play.
Funding for Tax Liability
Death and taxes are unavoidable and usually go hand-in hand. In business, there are many ways that taxes can take a toll on more than you can imagine. It is recommended that you consult with a tax accountant to work out the numbers, and then place life insurance on the members of the business with their expected tax obligations. In setting up this contract, it is common to use the company as the owner and beneficiary of the policy, however it is not necessary.
There is so much more to learn and consider in the organization and protection of your establishment, and in this video we’ve only uncovered the tip of the iceberg. Keep an eye out for more videos to come! One of the best things about using life insurance to protect your business is that life insurance policies are usually paid out within two weeks after the claims requirements are met. That will also alleviate the need to liquidate assets in an already stressful situation.
I’d love to hear your feedback, or if you have a similar story, please share with us in the comments below! I will do my best to help support you through it. Please like and share this video, and subscribe to our channel: Engrace Financial Solutions, financial success made simple.
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Always protect your most valuable assets. These include our homes, our cars, and most importantly our Human Life Value – the ability to earn an income. A Long Term Disability plan establishes financial security and protects against losses in the instance of an injury or illness, that prohibit an individual from working.
Our most valuable asset: financial security
Picture this. You are currently 40 years old and are earning $100,000 annually. If we calculate your gross earnings for the next 15 years, the total sum would equate to $2.5 million. At the age of 65, your assets will have grown substantially. The are huge risks associated with this $2.5 million asset. What can you do to protect this?
Long Term Disability: is right for you?
Let’s use two different scenarios to explain the benefits of a Long Term Disability plan. Let’s say Job A and Job B are both the same, each earning $100,000 per year. However, Job A does not have a Long Term Disability plan. Let’s say this person got injured severely and are now unable to work. Since they did not have a Long Term Disability plan, their source of income would be reduced to nothing, while they were away from work.
Let’s say Person B is on a Long Term Disability plan. Since they’re on the plan, their annual earnings would be reduced to $97,000. However, if this person were to be injured or succumbed to any illnesses, they would be protected by their plan. As a result, they would continue to receive a monthly income, around $5,000. Once that individual returned to work, they would receive 50% of the income that was set aside while they were gone.
While most people may choose a Long Term Disability plan, others might fancy the option of being self-insured.
A Long Term Disability insures your most valuable asset and is a smart and safe way to create financial security. Would you buy a house without home insurance? Or drive a car without auto insurance? Probably not! So why wouldn’t you do the same for your most important asset?
Need help making the right decision? Let us help!
Make smart decisions today! Talk to your Financial Advisor to discuss whether or not Long Term Disability is a probable choice for you. If you have any questions, get in touch with us!Contact Taayla today to learn about a Long Term Disability plan. Subscribe to our YouTube channel! We post new video content once a month, so don’t miss an episode and get my financial tips and tricks sent straight to your inbox.
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