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Posts tagged ‘aging parents’

Four Ways to Make Saving for Retirement Easier

4-Saving-For-Retirement

Planning for retirement is never easy. Thankfully, the good people at the Globe And Mail did this handy piece on 4 ways to make retirement easier.

If there’s one thing to know about planning your retirement savings this year it’s this: it’s not getting any easier.

Apparently that’s what a growing majority of Canadians think. New surveys from both the Bank of Nova Scotia and Bank of Montreal show that a dwindling percentage of people plan to put anything at all this year into their Registered Retirement Savings Plans.

With RRSP investment season now under way and the March 3 deadline looming for 2013 tax filing and to get potential refunds, the Scotiabank survey finds that just 31 per cent of Canadians plan to contribute this year, compared with 39 per cent last year. BMO’s survey found that 43 per cent plan to contribute, but this, too, is down from 50 per cent in 2013.

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8 Steps For Managing Parents’ Finances

caring-for-aging-parents

Aging parents with money troubles can be a worry for some. Thankfully, Teri Cettina wrote this very detailed and helpful peice to help you help your parents in their later years. Its long, but well worth the read. Nothing is more important than family.

So, the event you’ve worried about much of your adult life has finally happened: You need to take over Mom’s or Dad’s financial affairs.

In addition to the stress and sadness over what’s happened, you immediately have to deal with practical matters: Will Mom be able to live in her  home again? Can she afford a nursing home? Will insurance cover all of Dad’s  medical bills?

And speaking of bills, you’ve got to start paying them – everything from utilities to credit cards.

Even if you’re not at this point with your parents yet, this  list can help you decide what to do now – before anything happens.

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Highlights From Finance Minister Flaherty’s 2014 Federal Budget

 Hey everyone! Courtesy of the Canadian Press here are some highlights from Canada’s 2014 budget announcement by Jim Flaherty! I bolded some areas of interest at the civilian level!
Not listed: Commitment to 5mbps internet speeds across Canada. Good news for all you members of rural Canada and people with lower end internet packages!

Some highlights from Finance Minister Jim Flaherty’s 2014 federal budget

OTTAWA – Some highlights of the federal budget delivered Tuesday by Finance Minister Jim Flaherty:

— The budget is close to balance, with a $2.9-billion deficit and a $3-billion contingency fund.

— Flaherty forecasts revenues of $276.3 billion and expenditures of $279.2 billion.

— The government makes clear it will balance the budget next year by cutting program spending and reining in public service compensation costs.

— The budget proposes to make retired federal public servants pay half the costs of their health-care plan, up from a quarter now. This would raise annual payments for a retired individual to $550 from $261. (more…)

Should You Skip the RRSP Contribution and Pay Off Your Mortgage First?

There are more than a few ways to get yourself to retirement. RRSP’s are a great investment, but so is clearing your debt before you stop earning a regular income. So what should you focus on? Thankfully The Globe and Mail has a great article to help you decide.

The big push is on to convince Canadians to load their extra cash into registered retirement savings plan (RRSP) investments before the Mar. 3 deadline. But though it may seem as though contributing is the only option when it comes time to decide what to do with the money, it’s not.

Many financial planners, accountants and other experts suggest there’s an even better way to work toward a well-heeled retirement down the road: Pay off the mortgage first. And do it as fast as you comfortably can.

That’s exactly what Rock Lefebvre, vice-president of research and standards for the Certified General Accountants Association of Canada, in Ottawa, did when he was younger. Rather than invest in stocks, bonds or mutual funds, he developed a financial strategy that meant paying off his mortgage early. To this day he still advises that most people eliminate consumer debt and then go on to tackle mortgage debt before investing.

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Caring for Elderly Parents – Money Management

Caroline Tapp-McDougall outlines some key things to consider when managing your aging parent’s money. Original article from Caregiver Solutions Magazine.

Managing Your Parent’s Money

When it comes to finances, a typical caregiver arranges bill paying, bank deposits, insurance and benefit plans, savings and investment decisions, tax preparation, housing and daycare.

We know that caregiving can be physically and emotionally exhausting, so be smart and reduce the financial stress ahead of time.  Consider taking the following steps before an older relative becomes ill or disabled:

  • Assess your loved one’s financial situation by creating a net-worth statement, which is a simple listing of all assets minus all liabilities (or debts.)  Necessary information is often difficult to extract from elders given the sensitive nature of financial matters, so be prepared for surprises (positive or negative.)
  • Ask for personal and financial documents.  Your main issue is to know what documents to look for and where to find them (see know where to find.)  By having this knowledge, you can protect your elder’s assets, including dividends, interest, insurance, pensions, rental income and the contents of any safety deposit boxes.
  • Obtain access to banking and brokerage accounts by becoming a co-signer on joint accounts.  This will enable you to write cheques or withdraw funds to cover the cost of care in case of a short-term emergency or long-term disability.
  • Consider hassle-free automatic payments for recurring bills.  Arranging for water, electric and other utility bills, along with mortgage, TV and telephone expenses, to be paid electronically out of your loved one’s bank account.
  • Arrange direct deposit of pension and benefit cheques.  It is a safer, more convenient alternative, and it means no delays in getting funds deposited, no cheques lost in the mail and nothing misplaced or forgotten at home.
  • Review insurance coverage.  Often, our elders buy too much insurance or the wrong kind.  Make sure that your parents have adequate home and auto insurance as well as health, disability and long-term care plans.
  • Encourage savings and prudent spending.  Recognizing our longer life spans for and the rising cost of living, it’s wise to make a detailed monthly budget and a long-term financial plan.
  • Ask a financial planner or accountant to function in the role of mediator.

Create a healthy environment for dialogue and ensure that the situation is being looked at objectively.  A trusted outsider will often bluntly explain all of the possible options (with no hidden agendas) and can play an important role in facilitating decision-making.

It is easier to cope with any crisis with proper planning.  Smart caregivers will make sure that financial matters are in order so that energy can be focused on sensitive medical, emotional and caregiving issues.

Know where to find… When caring for your parents, you’ll want the following documents accessible.  Once you collect and organize this information, keep it in a safe place.

  • Banking information (there may be more than one bank account)
  • Loan records (to whom and how much)
  • Copies of leases or rental agreements (car, condo, apartment, appliances, furnace, hot water tank)
  • Provincial health card and other government health records
  • Insurance policies (health, life)
  • Investments (RRSP, stocks, etc.)  Statements and original certificates.
  • Pension (government and private) information
  • Mortgage on home and cottage or investment properties
  • Wills and powers of attorney for property and personal care
  • Commitments for charitable donations
  • Birth certificate
  • Insurance policy numbers
  • Passport
  • Veterans Affairs Information
  • Club memberships of subscriptions
  • Relatives’ addresses and phone numbers

[end of article]

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Tips on Organizing Your Parents’ Finances

Anne Bokma and Bart Mindszenthy write on the important topic of parental financial care. Originally posted on Nov 2011 on canadianliving.com

Money management for your parents

Managing money matters
My parents were the product of another age: They lived after the Great War, through the depression and the Second World War. So when it came to their financial values, fears and safety zones, they were highly conservative and outright secretive.

Retirement
As they moved well into retirement mode and their early 80s, it was clear they were declining in various ways and at different rates, both physically and cognitively. They looked at their financial and legal affairs as personal and private, marginalizing even me, their trusted only child. My father told me I was the executor of their wills, yet the originals and copies were in their safety deposit box, to which I had no access.

Having “the talk”
It took a number of very careful conversations with my father (who was the master of the purse) to edge him toward thinking about letting me have a role in their financial well-being. I wanted him to understand that I needed to know their wishes in order to do the best things for him and my mother.

We talked about how I could help make sure their bills were paid on time, address any other financial concerns and oversee their finances in case one of them felt ill (by having signing authority at the bank and access to the safety deposit box). We also talked about them giving me power of attorney rights.

Once my father got comfortable with the role I was asking to assume and why, and what the benefits and safeguards were for them, he was ready to commit to sharing access to their finances. He and I went to their bank; we signed forms allowing me to cosign for access to all of their accounts and the safety deposit box. He also had power of attorney documents prepared and signed.

Taking responsibility
From then until he was well into his 90s, we made weekly visits to the bank and I helped him with all transactions. When he was no longer well enough to come with me, I was entrusted to do it all for them on my own. Mind you, I was 50 years old by then.

Even though it’s uncomfortable having these difficult conversations with aging parents, I would encourage others to press to have those talks, as well as to forge agreements, and build plans and databases of personal information. This can only help both them and you, and allow everyone to explore and understand any financial fears, needs and wishes.
– Bart Mindszenthy

Canadian Pension Plan (CPP)
CPP Retirement Pension:
This is a monthly benefit payable to eligible contributors aged 60 years and older. The amount received depends on the age at which you apply and how many years contributions were made.

CPP Survivor Benefits:
These payments begin six months after the contributor’s death and are made to the deceased contributor’s estate, spouse or dependent children.

CPP Disability Benefit:
This benefit is available to those who have made enough contributions and whose disability prevents them from working.

Old Age Security (OAS)
OAS Pension:
A monthly benefit for those aged 65 and older who meet the Canadian legal status and residence requirements, an OAS pension is not based on financial or employment status. You must apply to receive benefits.

OAS Widowed Spouse’s Allowance:
Based on previous years’ income, this benefit is designed for low-income spouses of deceased OAS recipients.

Guaranteed Income Supplement (GIS):
A monthly tax-free benefit for Canadians aged 65 and older who receive the OAS pension, a GIS provides an amount based on previous years’ income and marital status.

Spouse’s Allowance Program:
This program offers a monthly tax-free benefit for the spouse of an OAS or GIS recipient between ages 60 and 64. The amount is based on the combined incomes of the OAS recipient and spouse.

Widowed Spouse’s Allowance:
This tax-free benefit is for low-income spouses of deceased OAS recipients.

International Benefits
This program may provide retirement, disability or survivor benefits to eligible individuals who have lived or worked in another country, or to the surviving spouses, common-law partners or children of eligible individuals who have lived or worked in another country.

Veterans Affairs Canada
War Veterans Allowance Program:
Providing financial assistance to low-income war veterans, this program’s benefit is based on previous years’ income. The minimum age for males to apply is 60, for females, 55.

Service Disability Pension:
This provides benefits to any veteran who has become disabled during service.

Keep a paper trail
Knowing where your parents keep their important legal and financial papers could alleviate much stress should they suddenly get sick or pass away, says Frank Raso, a lawyer in Hamilton. Raso suggests keeping those documents together in an unlocked fireproof and waterproof box. Here’s a checklist of what your parents should have.

Legal Papers
• Wills
• Birth certificates
• Insurance policies
• Power of attorney documents (living wills)
• Family trust documents
• Funeral instructions
• Most recent tax returns
• Contact information for lawyer

Financial Information
• Names and locations of bank branches and nature of bank holdings
• A list of all assets, including RRSPs and nonregistered investments
• Income sources, including pensions and rental incomes
• Debt information, including loans and credit cards
• Prepaid funeral contracts
• Contact information for insurance agent
• Contact information for financial planner
– Anne Bokma

[end of article]
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