Author Archive for: Advisorsavvy

Economic policy makers determine the interest rate which banks charge each other to lend money. However, not many Canadians are aware of this information and how it trickles down to their finances. Although, the Canadian prime rate has an affect on the interest rate you pay on financial products too. So what is the Canadian prime rate and how does it affect you? Let’s look at a quick example to demonstrate why the Canadian prime rate is important. Say you took out a 5-year loan of $100,000 at a variable interest rate of 3.45% (2.45% prime rate + 1%). Your monthly payment would be $1,772.53. A few months later, the prime rate increases to 6.7%, so your new interest rate is 7.7%. Your monthly payment would increase to $2,013.31 — about a $250 increase which is substantial! You won’t know all this information if you are unaware of the current rates and how changes can impact your finances. Sound knowledge

As we look ahead to a new year, many Canadians anticipate the upcoming Climate Action Incentive Payment dates for 2024. The Climate Action Incentive Payments (CAIP) are no doubt a timely initiative. This benefit manifests in its crucial position in reducing the effects of climate change. At the same time, the program has contributed significantly to economic growth. But as you await the 2024 payment dates, it’s important to understand that not all Canadian residents are eligible for the CAIP. Learn more about the Climate Action Incentive Payment in this article. Of course, we’ve included the Climate Action Incentive Payment dates for 2024 to satisfy your curiosity, as well as some other helpful details. What Is Climate Action Incentive Payment (CAIP)? The Climate Action Incentive Payment (CAIP) is a tax-free benefit to help offset the cost of federal pollution pricing. It includes a 10% supplement for residents of small and rural communities. Currently, the CAIP is available to residents of

Over 80% of non-retired Canadians don’t have a retirement plan — don’t be a part of this statistic! For some, the challenge is determining how much is needed for their golden years. For others, the problem is creating and sticking to a realistic savings plan. Thankfully, retirement planning software in Canada is available for this purpose. But how do they work? These software applications collect your information and give you various saving options. By doing so, these applications make planning for your retirement easy. If you’ve been wishing for a good life in your old age, it’s time to go beyond mere wishes. We’ve highlighted different retirement planning software in Canada and their features below. This will help you get on track for a comfortable retirement. How Do I Plan For Retirement In Canada? For some, the thought of retirement can be quite stressful. However, the sooner you start addressing the problem, the closer you’ll get to your goals! If

If you’ve ever gone through the process of completing a big ticket purchase, you might have utilized a bank draft from your financial institution. And if you haven’t gone through this process before? Don’t worry – we’ll cover everything you need to know in this article from what is a bank draft in Canada to how much it costs to use the service. To get started, a bank draft is a specialized type of payment. In many ways, a bank draft is sort of a special cheque. The bank provides an additional layer of assurance to the recipient of the funds by placing the money in a separate account until the bank draft is cashed. Ready to learn more? Continue reading to understand the ins and outs of bank drafts in Canada. What is a bank draft and how does it work? In technical terms, a bank draft is a form of payment where funding is guaranteed by the issuing

The idea of a billionaire can be difficult to fathom – there’s just too many zeros to count! However, they do walk among us in Canada. In fact, they probably founded business ideas that you use and benefit from on a daily basis. But let’s get down to brass tacks, how many billionaires are there in Canada? As of 2022, there were 65, but continue reading to find out the details, such as the wealthiest woman and the youngest billionaire in Canada. What is a billionaire? A billionaire is someone who has a net worth of $1,000,000,000 or more. Yes, that’s a lot of zeros! Net worth is defined as someone’s total assets minus all their liabilities, debts and obligations. There are only a handful of billionaires relative to the total world’s population. In addition, a billionaire’s wealth can fluctuate greatly from year to year, or even day to day. Often, the notion of what goes up must come down

Nothing in life is certain. This is why estate planning and preparing for the worst is a necessary exercise to protect your wealth. During the process, you might come across the terms executor of will vs power of attorney. You might be wondering, who executes your will once you pass? And what happens if you become incapacitated before death and can’t act in your best interest?We know; it’s a gloomy, uncomfortable subject. But still, making advanced arrangements for handling your personal and financial affairs is paramount. Enter the executor of the will and power of attorney (POA) — two legal entities that bring peace of mind. While they have varying duties and come into play at different times, they both make decisions on our behalf when we are otherwise unable to. Are you assisting a family member in getting their affairs in order? Or maybe you want to proactively protect your future. Let’s go over the differences between the executor

Tax season is officially upon us! Every Canadian is in the process of gathering their documents and trying to navigate tax brackets, rates, deductions and credits. But what if you earned money from a side hustle? Do you have to report it on your tax return? The answer is yes, side hustle taxes in Canada apply on income earned outside of your day job. If you’re not sure how to report this income and pay tax on it, continue reading to understand all the ins and outs. What is a side hustle? A side hustle is a job, hobby or way of earning income outside of your day job, which for most is a 9 to 5. Due to economic constraints, many Canadians have a side hustle to save more, pay their bills, or eliminate debt. In some circumstances, people might engage in the gig economy because they’re struggling to find full time work. Although, others may partake in a

If you’re in the process of writing a will or planning your estate, you might have come across the term probate. But what is it and how much is probate tax in Canada? Considering probate fees is definitely a part of estate planning, so you’ve come to the right place! In this guide, we’ll explore all the details of probate, how the process works and how much you can expect to pay.In addition, we’ll cover how to reduce and avoid probate. What is the Probate Tax in Canada? First, let’s discuss what probate is. In Canada, probate is the administration process of verifying someone’s will or final wishes upon their death. More specifically, probate is a legal approval process which validates a will and confirms an executor’s appointment. This includes reviewing the will for authenticity and legitimacy before distributing the assets accordingly. These activities are usually carried out by an executor. Often, the executor is named in the will. Probate

Many Canadians have worked for years and years to enjoy a relaxing retirement. Unfortunately, you might be able to cease employment in retirement, but you can’t avoid taxes! Reducing and optimizing taxes in retirement looks different than when you were working. So how exactly do retirees maintain tax efficiency in their golden years? In this article, we’ll explore tax efficient retirement withdrawal strategies in Canada and how you can incorporate them into your personal finances. Continue reading to learn more. Why does tax efficiency matter in retirement? In Canada, we are fortunate to have access to an array of public services. However, this comes at a cost – high taxes. Tax efficiency matters at all stages of life, but especially in retirement. In other earlier stages, if you aren’t tax efficient, chances are the burden isn’t as great because you’re working and have steady income. But in retirement, more tax means less retirement savings. It’s important to preserve what you

It’s no secret Canada’s housing market is a little crazy… okay, it’s completely out of control! If a home purchase feels out of your reach, you’re not alone. This is why the Canadian government is planning to introduce the Tax Free First Home Savings Account, or FHSA for short. Currently, the average annual income in Canada is roughly $75,500. The average Canadian home price in 2022 was $704,000. If the standard down payment is 20% of the home price, that means Canadians need to save $140,800 before even considering a home purchase. With the current average income, it would take Canadians about 10 years to save for a home purchase if they set aside 20% of their income each year. These figures assume there’s no unexpected financial burdens and you don’t have the misfortune of facing a layoff (and in 2023, you might not be so lucky). It also assumes you aren’t saving for other things, like retirement, vacations, education

A dental filling in Canada costs nearly $300 a pop — and you can bet your kid will get at least one cavity throughout their childhood. Indeed, Canadians have lamented the country’s lack of Canada dental benefits for a while. Luckily, two-thirds of Canadians have dental insurance that at least partially covers their dental expenses. Still, those stats were from 2019 before the pandemic. Today, people may no longer have an employer provided insurance plan to help with dental costs due to layoffs or lack of work. Plus, the fact remains that at least one-third of Canadians, aka 38 million people, don’t have insurance. Pair that with rising living costs and groceries, inflation, and expensive childcare? Dental care is last on the priority list, yet it’s important for your children’s health.You only get one set of teeth in your life, it’s important to take care of them! That’s why the federal government introduced the Canada Dental Benefit to offer relief

Are you in the market for estate planning services? If you’re not yet, you should consider it! According to a recent survey, almost half of Canadians have a will, but only 30% have an estate plan. Creating wealth in your lifetime is one thing, but building generational wealth is another thing which requires a holistic, well thought out estate plan. One estate planning service that’s trusted in the Canadian market is Willful.co. To learn more, continue reading for the complete Willful.co review. What is Willful.co? Wills are kind of like taxes — it’s tempting to put them off. Why? Because people don’t like uncomfortable processes and confusing financial records or paperwork. Then there’s the cost and consideration of hiring someone to help you. Still, the consequences of dying without a will could be catastrophic for taxes, inheritances, and your family’s relationships. Fortunately, the percentage of Canadians with up-to-date wills increased from 26.2% in 2016 to 32.58% in 2021; a solid

As pet owners know, furry companions are not free, and sometimes can be very expensive. This is particularly true when you run into an unexpected vet bill, such as emergency surgery or an unplanned vet visit. But what do you do when you can’t cover the cost incurred by your pet? Fortunately, you can always turn to pet financing in Canada. Learn about what pet financing is, the different types available and what happens if you struggle to pay in this article. Continue reading to ensure your pet gets the care they need! What is Pet Financing? In Canada, having a pet means additional costs. Things like food, kitty litter, toys, annual vet check-ups, shots and other day to day expenses for your furry friend usually don’t break the bank. But emergency surgery or an unexpected visit to the vet can cut deep into your pockets. These expenditures are the responsibility of the owner and can only be subsidized by

Wondering what happens when you hit 65? Hopefully, you’ll have enough saved up to retire and enjoy your last few decades in peace. You might stop working and rely on savings from an employment pension plan, reverse mortgage, or investments you’ve accumulated over the years. Canadians over 65 are often eligible for Old Age Security (OAS) payments. Fortunately for eligible seniors, there will be an old age security increase in 2023. This monthly payment is meant to offset the costs of living once retired, though it can’t cover everything completely. A financial advisor consults people on various financial topics, including retirement. They’re happy to help you figure out a budgeting plan with OAS and other retirement income supplements, if you don’t have one already. So, does Old Age Security rise in value with inflation? How much money can you get in Old Age Security? We’ll give you the lowdown on OAS, eligibility, maximum amounts, and the Old Age Security increase

If you have gone through the process of debt relief, you likely have heard the term Licensed Insolvency Trustee (LIT). If you haven’t needed the services of one before, you may or may not understand what that means, and how they can help you. An LIT is afederally regulated professional who provides advice and services to individuals and businesses with debt problems. Continue reading to learn more! This article was written in collaboration with Bromwich + Smith, a dedicated team of Licensed Insolvency Trustees and Debt Relief Specialists. What is a Licensed Insolvency Trustee? Licensed Insolvency Trustees are regulated by the Office of the Superintendent of Bankruptcy Canada, a branch of the federal government. They are professionals who have trained to oversee the filing of consumer proposals andbankruptcies in Canada. Both a consumer proposal and bankruptcy are legal contracts which must be filed by a Licensed Insolvency Trustee. They must adhere to the laws and regulations in the Bankruptcy and