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
How Do You Leave a Financial Legacy for Your Family?
A legacy often seems to imply something grand, like a charitable foundation or our name on an important public building. But for most of us, our legacy will be small, intimate, and priceless to those we love.
When I think of a legacy, I think of the intangible things that my parents left me. It’s the small, personal things, like how I sound like my mom when I say “hello”; how my brother looks more like my dad with every passing day; and how my sisters have my mom’s calm demeanour.
Life insurance as a legacy: protecting your family in the event of untimely death.
My parents taught me the value of hard work with the way they lived and the decisions they made. They moved to a new country for better opportunities and though they didn’t know about insurance when they first arrived in Canada, they were concerned about their family should something happen to either of them. A financial advisor gave them life insurance options to address that need to provide for my siblings and I in the event of their death.
My parents’ reason for holding a life insurance policy was to help their loved ones and protect us not only from the loss of their income, but the loss of lifestyle and financial security in the event of their untimely passing. This is the primary reason why anyone would hold an insurance policy or other investment with a death benefit: You have the privilege to create a layer of protection for those you love.
Their forethought and future planning made a difference in our lives that carries on to this day. The proceeds of their insurance policy were important to building our futures, and we remember the sacrifices they made to make that possible. That is one part of their legacy to us.
Life insurance options tailored to your needs?
Think of the essential people in your life; the people that you love the most. With Mother’s Day approaching this Sunday, our families and children are forefront in our minds! Protecting them and their future can be as simple as a life insurance policy or as complex as a family trust. There are different options to implement your financial legacy, no matter what your economic means are.
If you live in British Columbia and have a question about this or other financial matters, you can always connect directly with me via email. Otherwise, feel free to leave your investment questions in the comments below!
This content was prepared by Taayla Mark, a Certified Financial Planner 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/2019/05/legacy-thumbnail.jpg527936Taaylahttps://engracefinancial.com/wp-content/uploads/2017/07/main-logo-300x98.pngTaayla2019-05-09 19:46:242019-05-09 19:49:41Leaving Your Legacy
This time, let’s learn about segregated funds, which are like mutual funds except the principal investment is guaranteed. This is a lesser known product to it’s more popular cousin, the mutual fund. In the latest Street Smarts with Taayla video, we talk about segregated funds, their key differences to mutual funds, and why you could choose one type of investment over the other.
An investment with protection
Segregated funds contain many of the same elements of a mutual fund; stocks, bonds, and other financial instruments. They’re held as a single investment fund and managed by a portfolio manager at a professional investment company.
As the holder of a segregated fund contract, you are able to take advantage of a diverse portfolio of investment options that you would be unlikely to get on your own.
Segregated funds are an insurance product
For some segregated funds, a mutual fund is the underlying investment. The use of the fund is given to an insurance company and converted to a “seg fund.” Depending on the contract and the fund, the guaranteed return of principal upon maturity is normally 75% and could go up to 100%.
As an example, if you invested $100,000 into a segregated fund and at the end of the maturity period the market value is $50,000, the guarantee means you can collect $75,000 or $100,000. If the market value is $120,000, you would receive $120,000.
Guaranteed death benefit
This fund also has a death benefit of paying out the principal investment to the designated beneficiary without penalty if the investor dies before the contract lock-in period expires.
If the balance of the account is higher than than principal investment, the beneficiary would receive that amount. Again, the benefit payout depends on the contracted guarantee return; sometimes this is 75% but 100% is most common.
Segregated funds also skip the probate process and won’t incur any fees related to the settling of an estate.
Many funds also allow for a “reset option”. If in time your initial investment has increased, you may have the option to realize those gains by locking the new value as your principal investment. We recommend caution in using this option, as resetting the investment amount may also mean resetting the contract to a new 10 to 15-year term. The contract period is important only if you’re waiting to collect the 75% or 100% guaranteed principal.
Another bonus with segregated funds is creditor protection. Depending on the circumstances of how the contract was purchased, investment in a segregated fund could be excluded from bankruptcy filings. The beneficiary of the fund has to be a spouse or your child to qualify for creditor protection. Also, the Canada Revenue Agency can seek to overturn this protection under limited circumstances.
The primary downside to segregated funds as an investment is the higher management fees because of the guaranteed investment.
Contact me or your registered advisor for a comparison of fees and risk to help you decide if a segregated fund is the best fit for your investment goals. 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 recommendation please consult directly with Taayla Mark.
https://engracefinancial.com/wp-content/uploads/2019/04/taayla-segregated-funds-blog.jpg3951210Taaylahttps://engracefinancial.com/wp-content/uploads/2017/07/main-logo-300x98.pngTaayla2019-04-17 10:59:192019-04-24 10:14:48Segregated funds: Invest money with more safety
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!
https://engracefinancial.com/wp-content/uploads/2019/03/investing-thumbnail-1.jpg527936Taaylahttps://engracefinancial.com/wp-content/uploads/2017/07/main-logo-300x98.pngTaayla2019-03-26 19:42:522019-03-26 19:42:52Getting Started with Investing
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.
https://engracefinancial.com/wp-content/uploads/2019/03/maxresdefault-1.jpg3951273Taaylahttps://engracefinancial.com/wp-content/uploads/2017/07/main-logo-300x98.pngTaayla2019-03-06 11:00:032019-03-06 14:04:06CANADIAN TAX: Basics to Paying Less with Jan Mark, CPA
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.
https://engracefinancial.com/wp-content/uploads/2019/02/RRSP.jpg7201080Taaylahttps://engracefinancial.com/wp-content/uploads/2017/07/main-logo-300x98.pngTaayla2019-02-06 13:57:382019-02-06 17:51:28Is RRSP right for YOU?
When it comes to insurance options, you don’t need to feel limited. Term Life Insurance is an alternative solution that enables individual to acquire insurance coverage for a specific need and time period, at a more affordable rate.
Why is Term Life Insurance a Good Option?
Term Life Insurance is an insurance plan that focuses on the specific need of individuals. For instance, if someone is seeking insurance coverage over a fixed time period, they don’t need to be purchasing a plan with a higher cost, as this is unnecessary. Rather, individuals could acquire a Term Life Insurance plan, enabling them to accumulate savings on a cheaper plan.
Benefits Associated with Term Life Insurance?
Since Term Life Insurance is an affordable solution, individuals that choose this option are able to save money from this plan. This money could be invested into other means such as a business, a home, or even an emergency fund while your children are young.
Term Life Insurance is Comparable to Renting a Home
Term Life Insurance is like a rental, which is a cheaper, simpler expense. It can be used to cover your mortgage liability, or as an income replacement while your children are still young. However, just like renting a home, the cost of insurance also continues to increase over time.
What to Consider When Deciding on the Different Types of Insurance Plans:
Do you have a temporary need or a lifetime need?
Are you looking for a more affordable option today with more costly options in the future?
Are you looking to make an investment in a more expensive option today with much cheaper options future?
Would you rather just spend it and forget it?
Or are you seeking to create future assets?
Ready to Find the Best Option For You?
Get in touch with us! Contact Taayla today to learn how to choose the best insurance option for you.
https://engracefinancial.com/wp-content/uploads/2018/06/Screen-Shot-2018-06-06-at-11.14.41-AM-e1528746424624.png5021113Taaylahttps://engracefinancial.com/wp-content/uploads/2017/07/main-logo-300x98.pngTaayla2018-06-11 15:40:572018-06-11 15:47:28Learn All About Term Life Insurance
Did you know that there is such a thing as “good” debt along with “bad” debt?
Today, we’re going to talk all about debt. It’s a big issue in our society, but we’re going to bring you a solution and unravel this problem.
What is “Good” Debt?
Good debt is when you borrow to buy an asset that is appreciating, like a home. It’s an investment that grows in value or can generate long-term income. Another example is taking out student loans to pay for post secondary education. Student loans and mortgages usually have a lower interest rate compared to other loans. With student loans, your education increases your value as an employee and potentially raises your future income.
What is a “Bad” Debt?
A bad debt is consumer debt like your credit card, the most common debt amongst people. Bad debt is incurred when you purchase things that don’t give you increasing or long-term value or income, carries a high interest rate, and you’re unable to pay it off right away. For example, you purchase a high-end purse on your credit card, thinking you will just pay it off “later”, but when your statement comes in you realize you can’t pay off the balance so you leave it or a portion of the amount. Eventually that purse will cost you more than the price you paid, calculating the interest you incur, and then it’ll be out of style so it’s not at all any long term investment.
What Can You Do: The Snowball Method
What we will show you in this video is a way to pay off your consumer debts. It’s called a Snowball Method. Essentially it’s a debt reduction strategy where you pay off your debt according to smallest to largest amounts. Overtime, momentum is gained as each debt paid off. Once you pay off one debt, the budget you had allotted for it gets rolled into your next debt, hence the name “Snowball Method”.
In this video, these are the steps we use:
List your different amounts of consumer debt, from smallest to largest, with a total of the sum. It can be a department credit card, bank credit card, and lines of credit.
List your different interest rates involved and the minimum that you have to pay for each debt with the total amount so you can see the overall budget.
You will want to focus on one debt at a time so that means for the first period you budget so that you can pay as much as possible on your smallest debt, and just pay the minimum for the other debts so those don’t fall behind.
Once the first debt is paid off, you take the budget you had for that and roll it over to the next smallest debt, and continue to pay the minimum for the other debts.
Repeat each step until each debt is paid in full.
Alternatively, people will split their budget into the x amount of debts they have so that they pay a little more than the minimum for each. However, in the long-term they will find that it takes them longer to pay off their debt, and what’s even more demoralizing is that it can take an average of 3.5 years to pay off a credit card.
You can try the Snowball Method or any other methods out there, but the point is to figure out a plan to pay off your debts because you simply don’t want that in your life.
Why Does the Snowball Method Work?
It’s actually more about behaviour modification than it has to do with math. If you start with the largest debt, it will follow you for a while. You may see the numbers going down, but eventually you may hit an obstacle that will prevent you from paying extra, and your other debts will still exist.
With the Snowball Method, once the smallest debt is paid off, it’s gone forever! You will see the momentum this method gives you and your other debts will eventually fall off as well. Stay committed to the plan, and you can succeed in becoming debt-free!
Ready to Conquer Debt?
Get in touch with us! Contact Taayla today to learn how to apply this method to YOUR debt and help you plan!
Subscribe to our YouTube channel! We will be posting new video content once a month, so don’t miss an episode and get my financial tips and tricks sent straight to your inbox.
https://engracefinancial.com/wp-content/uploads/2018/05/How-to-Pay-Off-Your-Credit-Card-Debt-Faster-l-Snowball-Debt.png6261118Taaylahttps://engracefinancial.com/wp-content/uploads/2017/07/main-logo-300x98.pngTaayla2018-05-23 12:40:282019-01-09 14:12:04How to Pay Off Your Credit Card Debt Faster: Snowball Debt