iA Securities & HollisWealth* are now iA Private Wealth

We are excited to introduce our new company name, iA Private Wealth. The new name is designed to better reflect the essence of what our advisors do – provide holistic wealth management solutions tailored to the unique needs and goals of investors across Canada.

Please take a few moments to browse our newly redesigned and updated website to learn about the many benefits of working with an iA Private Wealth Investment Advisor.

*Refers solely to the Investment Industry Regulatory Organization of Canada licensed advisors within HollisWealth.

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CPP & RRIF Income: Thinking Outside the Box

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By Erin Gendron, May 20, 2021

Most new clients coming into our practice hold two very common assumptions about retirement income.

The first is that any time you can defer paying tax, you should, and that means holding off on converting your RRSP into a RRIF until the statutory deadline – the end of the year you turn 71. If this is not possible, you should minimize your RRIF payments to the greatest possible extent by relying on other sources of income.

The second is that as soon as you qualify for Canada Pension Plan (CPP) payments – age 60 – you should start taking them.

While this approach may be suitable for some, for many people – particularly those with significant savings and potential for longer-than-average life expectancy – acting on these assumptions would mean leaving a surprisingly large amount of retirement income on the table.

Bucking conventional wisdom

Instead of taking CPP payments early and RRIF income late, many would benefit from doing the exact opposite: delaying CPP until age 70 – or as close to age 70 as possible – and starting RRIF payments well in advance of the conversion deadline to meet cash flow needs.

When you take CPP before age 65, your benefits get cut by 0.6% a month, or 7.2% per year. This means that if you start taking CPP at age 60, you’ll see a total reduction of 36%. By contrast, if you start taking CPP after age 65, your benefits increase by 0.7% a month, or 8.4% a year, which means that delaying for as long as possible – to age 70 – boosts your CPP payments by a startling 42%.

A recent study put a dollar figure on this difference, explaining that “an average Canadian receiving the median CPP income who chooses to take benefits at age 60 rather than age 70 is forfeiting over $100,000 (in current dollars) worth of secure lifetime income.” Despite this, over the past decade most Canadians began taking CPP at age 60, with fewer than 1% holding off until age 70.

Let’s take a look at a hypothetical, but very typical, example to illustrate how this powerful insight can be integrated into a tailored, holistic retirement income plan.

Case Study: Bob & Judy

Long-time neighbours Bob and Judy both plan to retire at age 60 after decades of hard work and diligent saving. In addition to a $30,000 annual pension, they each have $500,000 in RRSP savings and both are eligible for $1,100 in monthly CPP payments at age 65. A $4,500 net monthly income ($54,000 annually) would allow them to live the retirement lifestyle they each envision for themselves.

Bob and Judy have nearly identical financial circumstances, apart from one very important detail: Judy has an Investment Advisor, while Bob does not.

CPP: Worth the wait

Bob begins taking his CPP benefits as soon as he retires. Like most people, he’s focused on the short term and concludes that since he’s eligible to have that extra money in his pocket, he may as well take it. He receives $704 per month ($8,448 annually), which is well below the $1,100 he would have received had he waited until age 65 and less than half of the $1,562 he would have pocketed had he waited until age 70.

Bob enjoys a very fulfilling retirement and passes away at the end of his eighty-seventh year. Overall, he collected $312,000 in CPP income (pre-tax) over his 27 years of retirement.

Judy takes a very different approach. At the suggestion of her advisor, who always encourages long-term thinking, she delays her CPP payments until age 70. For the income she needs until that time, she makes withdrawals from her retirement savings. Once Judy turns 70, she begins collecting $1,562 in monthly CPP benefits ($18,744 annually), which her advisor points out is 42% higher than what she would have received had she started taking CPP at age 65.

Like Bob, Judy enjoys a fulfilling retirement and passes away at the end of her eighty-seventh year. Over the course of her 27-year retirement, she collects $487,000 in CPP income (gross).

Bob’s lifetime loss for taking CPP early is $175,000 (the difference between Judy’s $487,000 and his $312,000). This loss becomes particularly important when we consider that Bob had a 45% chance of living to age 95, which would have significantly increased his cash-flow needs.

RRIFs, death & taxes

Judy had to rely on higher RRIF withdrawals to meet her income needs in her early retirement years, while Bob took more modest withdrawals to meet his after-tax income goal. What impact does this have over the long term?

Assuming equal rates of return, at age 70, Bob’s RRIF is valued at $444,000, while Judy’s is $336,000. Importantly, however, at age 70, Judy’s income needs are met with her increased CPP income, and as a result her RRIF withdrawals can be saved in her TFSA and non-registered account for future use.

Fast-forward to age 87, Bob’s RRIF is now worth $256,000. Approximately $137,000 in taxes will be payable on this amount by his estate, leaving a net estate value of $119,000.

At age 87, Judy’s RRIF is worth $222,000, while her TFSA and non-registered account have grown to $85,000, for a total of $307,000. Estate taxes of $117,000 leave a net estate value of $190,000, which is $71,000 more than what Bob was able to leave to his loved ones.

Final thoughts

As is often the case in life, the most common way of doing things isn’t necessarily the best way. And so it is with retirement income planning.

For many, delaying CPP and relying more on RRIF withdrawals during the early years of retirement can result in more income overall, a lower lifetime tax bill, and a larger bequest to loved ones and charities.

As with all aspects of wealth management, your best course is to speak with a specialist – an Investment Advisor with expertise in holistic financial planning – to learn which approach to retirement income is most appropriate for your personal financial circumstances.

Erin Gendron, CFP® is an Investment Advisor and Financial Planner at CrossPoint Financial, iA Private Wealth in Ottawa, Ontario. She can be reached at (613) 228-7777 or erin@crosspointfinancial.ca

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Understanding Fees

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By iA Private Wealth, May 27, 2021

Many people invest because they believe it’s a good way to achieve their financial goals. They also know that getting professional financial advice can help them invest better.

If you’re working with a financial advisor (or considering it), you should understand how advisors are compensated. The topic of fees can be complicated, but we’ll stick to the basics.

There are three main forms of advisor compensation: a commission-based model, a fee-based model or by salary.

Commission-based. Advisors working in this structure receive compensation when their clients buy or sell an investment (e.g., mutual funds, exchange-traded funds or stocks). The commission they earn may depend on the investment type, the dollar value of a trade or other variables. Advisors may also receive ongoing compensation from fund companies in relation to the funds their clients hold (more on that later).

Fee-based. Advisors working in this structure earn a fee based on the value of assets they manage on a client’s behalf. Even if a client makes many trades and frequently uses certain advisory services, the fee charged remains a prearranged percentage (e.g., 1%) of the value of assets being managed. Sometimes the fee percentage declines as a client’s assets increase.

Salary. An advisor working for a bank or credit union will often earn an annual salary plus a performance-based bonus. Salaried advisors provide value to clients but may not hold the same industry licencing as commission- or fee-based advisors, which may narrow the range of services they can offer.

Some advisors are compensated through a mixed structure. For example, they may charge a flat fee for creating a financial plan and earn commission on trades they execute for your account.

Management expense ratio (MER)

If you invest in mutual funds, segregated funds or ETFs, you’ve likely heard about MERs. They’re calculated as a percentage (e.g., 2%) of fund assets and deducted from the value of your investment. MERs are used to compensate fund managers and dealers, and to pay related taxes.

Fund manager. This is the firm that operates the fund you invest in. They set the fund’s strategy and objectives, and employ portfolio managers who decide what (and when) to buy and sell, in order to help enhance fund returns and manage risk. They also provide administrative duties like recordkeeping, as well as legal, accounting, audit and custodial services. For these important duties, fund managers earn a portion of the MER.

Dealer. This is the firm where your advisor is registered. Dealers maintain account records, produce and deliver account statements, and provide the technology for online account access. Dealers also ensure their investment advisors meet all regulatory requirements. Part of a dealer’s MER allocation (also called a “trailer fee”) typically goes to the advisors responsible for client-oriented tasks like planning, portfolio construction and monitoring, and trade execution.

Taxes. A portion of the MER is used to cover federal and provincial taxes charged on fees and services related to the fund manager and dealer.

Client Relationship Model 2 (CRM2)

Implemented in 2017, an industrywide initiative known as CRM2 obliged dealers to provide clients with a personalized annual report that summarizes charges and compensation related to a client’s account. This report is designed to be transparent and is written in straightforward language. For a better understanding of fees (e.g., what you pay and where the fees go), check your personalized annual report.

To learn more about the costs of investing, speak with an iA Private Wealth Investment Advisor.

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Create a will and protect your beneficiaries

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By iA Private Wealth, May 17, 2021

Although financial advisors, lawyers and estate specialists always stress the importance of having a will, many people don’t bother. Common reasons include not wanting to think about death, not knowing how to create a will, not thinking it’s urgent (“I’m still young!”) and not believing they have enough assets.

However, since the onset of the global pandemic, there has been a notable increase in adults of all ages looking to create a will. People have become more concerned about the uncertainty of life and are comforted by the certainty that a will can offer.

What is a will?

As part of your estate plan, a will (also known as a last will and testament) is a legally recognized document that spells out your wishes regarding how you want your property and assets distributed after you die. You can also appoint the executor of your will, who is responsible for managing your estate affairs and carrying out your final wishes.

When you die intestate (i.e., without a will), the courts will decide how your assets are distributed. This process may be costly, time consuming and emotionally difficult for the beneficiaries – and ultimately may not align with your wishes.

If you’re married or divorced, have children or own a business, property, investments and other valuable assets, you need a will to protect and take care of your beneficiaries. Without the clarity that a will can provide, confusion and discord among family members may result.

Power of attorney

While an executor carries out your wishes after you die, you may also want to consider naming powers of attorney (POAs) to look after your interests when you’re still alive. POAs are legal documents that allow someone you designate (called an “attorney” but not necessarily a lawyer) to make decisions on your behalf should you become incapacitated and unable to act rationally on your own. Examples include decisions related to your finances and your physical or mental well-being. When you die, POAs are no longer valid and your will takes effect.

Beneficiary designations

Through your will, you can make beneficiary designations to keep certain funds from being included as part of your estate. This allows your beneficiaries to receive those funds without going through probate, which is a process where your estate assets are assessed by the court and will be subject to probate tax, leaving a smaller inheritance for your beneficiaries (and making them wait longer to receive it). If you fail to make beneficiary designations, these assets will form part of your estate and will enter the probate process.

You can make beneficiary designations on registered plans such as TFSAs, RRSPs and RRIFs, as well as other plan assets including segregated funds and life insurance policies. If you have a spouse and don’t want your RRIF or TFSA assets transferred as a lump sum to his or her account, you have the option to name your spouse as a successor annuitant (for RRIFs) or successor holder (for TFSAs) and keep your current plans intact. Common-law partners may also qualify for this successor provision.

Having a valid will is a crucial component of estate planning. An iA Private Wealth Investment Advisor can work with your legal counsel to create an estate plan that will ensure your final wishes are respected and executed, while helping your loved ones avoid potential stress and family conflict in the future.

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Preserve Wealth and Reduce Taxes with a Family Trust

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By iA Private Wealth, April 27, 2021

High-net-worth families want to protect their wealth, and one proven way to achieve that goal is through a family trust. And while high-net-worth families may reap the greatest benefits from trusts, other families – especially those who own a business – can make good use of family trusts as well.

A family trust is a legal entity that allows family members to protect assets, control the distribution of assets, transfer wealth among family members and split income in a tax-efficient manner. Before we look at these benefits in more detail, it’s important to understand the three key parties involved in family trusts: settlors, trustees and beneficiaries.

The settlor is typically a family member or close friend who establishes and funds the family trust on behalf of the trustees and beneficiaries. Trustees are the people who manage and administer the trust, and are often parents or a reliable business advisor. Beneficiaries are the people who will receive financial benefit from the trust, and can be children, grandchildren, siblings, nieces, nephews, etc.

Family trusts may set up as either testamentary (e.g., arising after the death of a trustee) or inter vivos (e.g., implemented while the trustee is alive).

Why create a family trust?

Now that we know who’s involved in a family trust, let’s look at four of the most common reasons for creating one:

  1. Protect assets. A family trust can protect the beneficiaries from claims for payment made by creditors. Assets held in the trust typically cannot be seized in the event of a lawsuit or bankruptcy.
  2. Control the distribution of assets. Trustees decide which beneficiary receives what – and when – based on the factors they have documented. Also, let’s say a child is disabled or not careful with money. The family trust can distribute assets in a way that ensures the child has enough money to help meet their lifetime needs.
  3. Transfer wealth among family members. An estate freeze is a strategy that allows a business owner to lock in the value of their business at its current valuation as part of the family trust. Any future growth of the business is considered a capital gain and the beneficiaries can use their lifetime capital gains exemption to help shelter these gains from income tax. Estate freezes are also used in other tax-mitigation strategies and for certain estate planning and business succession purposes.
  4. Split income in a tax-efficient manner. A family trust allows trustees to distribute earned income to family members who are in a lower income tax bracket, so the income (e.g., capital gains, dividends) is taxed at a lower rate. By sharing income, the overall family tax burden is reduced, leaving more wealth available.

Family trusts offer many benefits, but may also be costly and complicated. We can help you determine if establishing a family trust is suitable for your family’s unique financial situation. Find out more by contacting an iA Private Wealth Investment Advisor.

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Why Everyone Needs an Estate Plan

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By Josh Sheluk, April 19, 2021

Pop legend Prince passed away in 2016 at the young age of 57. Despite fame, fortune, a wardrobe filled with raspberry berets, and a lineup of royalty-generating music, the man made a critical mistake that too many Canadians seem intent on copying – he didn’t have a will.

An Angus Reid Institute poll finds that 51% of Canadians do not have a will, while only 35% have one that is up to date. If you want to mimic Prince’s fabulous personal style, that’s one thing; but following in his footsteps by dying without a will is not something we recommend.

An estate plan isn’t just for the wealthy, and it involves much more than a will. Consider a few real-life scenarios that may hit a bit closer to home than the story of an international pop star.

Scenario 1

A single father has two minor children. He has a well-paying job and has accumulated assets: an RRSP, a TFSA, and the family home. He also has a life insurance policy that would pay out upon his death. He would like to have the assets managed professionally for his children until their 25th birthdays.

The case may be obvious, but our father is in dire need of a proper estate plan. Upon his death, there are tax consequences for the RRSP, a formal trust needs to be set up by a lawyer, a trustee needs to be appointed, and assets need to be liquidated. The only proper way to do any of these things is with the help of a will.

Scenario 2

A married couple has two young children. They have some debt but do not have much in the way of savings. There is a modest life insurance policy through the wife’s employer, but with the absence of personal wealth and with money tight, they are not yet considering creating a will.

Personal wealth does not determine the need for an estate plan. Importantly, a proper estate plan covers the guardianship of minor children. Without explicit directions from the parents, the guardianship could end up in court. With family members who don’t get along, the only ones who win are the lawyers.

Scenario 3

Your friend’s mother passes away. Your friend’s half-sisters would like their mother to be buried next to their father, who passed away 50 years ago. Your friend, of course, would like her mother to be buried next to her father, who was the deceased’s current husband of 45 years.

A proper estate plan involves a final directive, which is direction to those left behind on what should happen with one’s remains. It’s often difficult to foresee what problems or contentions may arise upon your passing, which is why a properly structured and well-thought-out plan is crucial.

So, should you have an estate plan? The answer, in our experience, is almost certainly “Yes”. And that estate plan should almost certainly include a will, appointment of a power of attorney, and final directive. Not only should you have a plan, you should also revisit it regularly, as it’s likely you’ll change your mind as circumstances change over time.

If you’re having difficulty figuring out where to begin, talking to a professional would be worthwhile. A financial advisor or lawyer who focuses on wills and estates would be a good place to start.

Josh Sheluk, CFA, CFP®, CIM®, is a Portfolio Manager at White LeBlanc Wealth Planners, iA Private Wealth, in Burlington, Ontario.

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Do You Need a Prenuptial Agreement?

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By iA Private Wealth, April 16, 2021

If you’re getting married, it’s an exciting time. You’ve got many things to do before the big day – is a prenuptial agreement one of them? It’s usually not top of mind for couples entering marriage, but it’s worth considering.

A prenuptial agreement (also called a prenup or marriage agreement) is a written, legally binding document that a couple signs before they marry. In the event of divorce, a prenup determines the rights of entitlement (e.g., how assets are divided).

People often hesitate to sign a prenup. They feel it assumes the relationship is headed for divorce or treats marriage as a business arrangement. That’s not necessarily the case.

Think of it as a form of insurance. When you buy home insurance, you’re not assuming your house will burn down. When you buy disability insurance, you’re not assuming you’ll suffer a major accident. You just want peace of mind knowing that you’re protected if something bad happens.

Benefits of a prenup

A prenup encourages open communication before marriage regarding important life issues. You will disclose financial circumstances (good and bad), major goals, approach to childrearing, etc. You’ll learn what’s important to your partner and what needs and concerns he or she may have.

Here are eight more reasons to sign a marriage agreement:

  1. You want to protect your existing assets (e.g., a home, investments, insurance policies, jewelry or other possessions with monetary/sentimental value) and future inheritances.
  2. There’s a significant imbalance in the value of assets each person brings to the marriage.
  3. You own or have an ownership stake in a business (especially a family business).
  4. One partner (or both) is carrying a large amount of debt into the relationship.
  5. You want to uphold an existing estate plan so your assets are distributed according to your wishes when you die.
  6. One partner (or both) is already divorced and/or has children who may be receiving financial support.
  7. A prenup can make divorce less contentious, facilitate a smoother settlement (which may mean lower legal fees) and ensure a fair distribution of assets.
  8. Divorce is a common cause of financial hardship and bankruptcy, potentially jeopardizing long-term financial health and stability.

In Canada, the laws regarding prenuptial agreements vary by province, so be aware of the parameters and limitations that apply to your province of residence.

Postnuptial (postnup) and cohabitation agreements

Like a prenup, a postnup is legally binding and stipulates how a couple’s assets are distributed in the event of divorce. But as its name suggests, a postnup is signed after getting married. Courts often treat a postnup carefully to ensure validity of the reasons why the couple made this arrangement after they exchanged vows.

Cohabitation agreements differ slightly. Without a prenup, a divorcing couple typically splits their assets equitably. This default action doesn’t apply to common-law couples with no cohabitation agreement. For example, you’re not automatically entitled to 50% of the shared home, even if you’ve been making 50% of the mortgage payments and covering 50% of home maintenance costs.

Keep all receipts and other documentation regarding home-related expenses, and ensure your name appears on the title of the home. Alternatively, a cohabitation agreement can clearly (and legally) spell out how you deal with financial issues when together, and what happens to your assets should the relationship end.

If you’re engaged or thinking about moving in with your partner, an iA Private Wealth Investment Advisor can work with your legal counsel to create a marriage agreement that is fair and protects your assets.

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Maximizing the Benefit of Philanthropic Giving

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By John Tabet, November 10, 2020

This is the second article in a two-part series on charitable giving. Read Part I here.

For high-net-worth and ultra-high-net-worth families, leaving a lasting legacy through philanthropy is very often a central priority that spans multiple generations.

Many of my own clients – and their millennial children – exhibit a very strong desire to use their wealth to support a wide range of worthy causes, from racial justice to anti-poverty to environmental sustainability.

They are often surprised to learn, however, that setting up a foundation and making cash donations is typically not the best approach to supporting their cherished causes. For most wealthy individuals and families, making in-kind donations of shares via a donor-advised fund is the most attractive option for philanthropic giving.

Why not a foundation?

Setting up and maintaining a charitable foundation is, from an administrative perspective, very much like creating and maintaining a business.

The legal and accounting work that goes into establishing a foundation will typically cost in the neighbourhood of $10,000. And while foundations do not pay tax, they are still required to file an annual return. That means yearly accounting expenses, which come on top of the ongoing administrative work of managing assets held within the foundation.

If foundations were the only option for carrying out a philanthropic plan, they would be well worth the effort and expense. But there’s a better way.

Donor-advised funds

A donor-advised fund is a third-party vehicle – offered by most community foundations and some asset management firms – that effectively outsources the functions that would normally be performed by a foundation, while achieving all of the same charitable goals.

Donor-advised funds offer tremendous flexibility and convenience, as they allow you to make a large donation in a given year, claim the donation tax credit for that year, but disburse the funds in later years to a variety of charities. With a donor-advised fund, you simply make the gift and provide instructions on how to disburse it, and the organization that runs the fund takes care of the rest.

The fee associated with this service is generally low – typically 1.0% to 1.5% for a $250,000 donor-advised fund. In some instances, the fee is based on the number of donation grants you request. In both cases, the fee is not tax deductible, but it does not reduce the amount your donation tax credit is based on.

In short, with a donor-advised fund, you’ll save time and money, and you’ll be able to focus your philanthropic efforts on the joy of giving, rather than on administration and accounting.

In-kind stock donations

One of the best ways to maximize the amount you give – and the tax benefit of giving – is to make in-kind donations of stock, rather than cash donations generated from realized gains. To illustrate, let’s look at a hypothetical example.

Geneviève is a 32 year old attorney living in Montreal. Five years ago, she used $500,000 in family funds gifted to her to purchase shares of Facebook.

The shares are now worth $1 million, but Geneviève just received a $5 million bequest on the passing of her grandmother. So she decides to use the full value of her Facebook shares to make a generous donation, via a donor-advised fund, to the children’s ward of her local hospital, and a local organization that supports women victimized by domestic abuse.

Here are her options:

Sell and donate the proceeds

The sale of the shares would generate $1 million in cash, and 50% of the $500,000 capital gain – $250,000 – would be subject to a tax rate equivalent to Geneviève’s highest marginal rate, which is about 50%.

This would result in a tax bill of about $125,000, leaving $875,000 to donate to her charities of choice. Her tax credit would then be calculated based on the donation amount of $875,000.

Donate the shares in-kind

Gifting the shares means Geneviève would not be subject to capital gains tax, as our tax code says that when you donate shares to charity in-kind, you don’t have to claim a capital gain.

This means the charity would receive a donation valued at $1 million rather than $875,000, and Geneviève would get a donation tax credit calculated on $1 million rather than $875,000.

Conclusion

With the right planning, you can maximize the benefit received by your charities of choice, and increase the tax benefits of your generosity. Working closely with an experienced and knowledgeable Investment Advisor ensures that each component of your philanthropic vision is planned and executed as efficiently as possible, aligning all aspects of your intergenerational wealth plan – investment management, philanthropy and estate planning – with the values that define who you are.

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Lower Your Tax Bill Through Charitable Giving

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By John Tabet, November 10, 2020

This is the first article in a two-part series on charitable giving. Read Part II here.

Over the last number of years, my interactions with clients have shown a clear and undeniable trend: today’s investor is moving away from the conventional separation of wealth creation and personal values, and more towards the complete integration of socially conscious priorities into the holistic wealth planning process.

On the investment side, this often takes the form of increased interest in socially responsible investment funds, which in recent years have gone from a market niche to a core offering for virtually all asset management firms.

But the most direct way of expressing a commitment to a cherished cause, apart from the gift of your time, is through monetary donations. In this article series, I’ll provide an overview of how you can incorporate charitable giving into an optimally structured wealth plan, and explain how to maximize the benefit of your monetary gifts – both for your charity of choice and yourself.

Different types of donations

There are three main ways to make monetary donations:

  1. Giving
    Simple, one-off acts of support, such as buying a raffle ticket at a charity golf tournament or supporting a church bake sale.
  2. Being charitable
    Personal engagement with a specific organization that aligns with your values, and making monthly or annual financial gifts to support it.
  3. Philanthropy
    The option of choice for high-net-worth and ultra-high-net-worth individuals and families. Typically, this involves looking out over a longer time horizon and entails a systematic approach to donating very large sums to one or more causes.

In this article we’ll focus on being charitable; in the next installment of the series we’ll take a closer look at philanthropy.

Being charitable

For most people in the wealth accumulation stage of their financial journey, charitable giving will involve annual donation amounts ranging from hundreds to thousands of dollars, spread out over multiple charities or focused on a single cause.

When you donate to a registered charity you become eligible for tax credits, making charitable giving a win-win for both you and your charity of choice. Let’s look at an example:


  • Andrea makes $100,000 a year as an app developer in Toronto.
  • She donates $1,000 in 2019 to a registered charity focused on environmental sustainability.
  • Current tax rules allow for a federal credit amounting to 15% on the first $200 of the donation and 29% on the remaining $800, for a total of $262.
  • On the provincial level, Andrea can claim 5.05% on the first $200 and 11.16% on the remaining $800, for a total of $99.38.
  • The combined federal and provincial tax credit on her $1,000 donation reduces her income tax bill by $361.38.

This example represents a fairly straightforward case, but our tax rules include a number of other provisions that can enhance your credit amount and add significant flexibility to how you claim your credits. These include:

  • An enhanced credit rate of 33% on eligible amounts over $200 for taxpayers who earn more than $200,000 annually.
  • The ability to carry forward donation credits to any of the five years subsequent to the year the donation was made.
  • The ability to transfer donation credits to your spouse or common-law partner and combine them on a single tax return.

Conclusion

Charitable giving is one of the best ways to meaningfully support causes that engage and inspire our natural impulse to help those less fortunate than we are and join with those dedicated to making our world a better place. Working with your Investment Advisor and accountant can make this immensely satisfying activity financially beneficial for you as well.

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Financial Literacy Month is Every Month

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By iA Private Wealth, November 9, 2020

November is Financial Literacy Month. You may hear about events and program launches designed to increase the financial capabilities of Canadians. But really, why focus just one month on enhancing financial literacy? Being able to manage your money is a skill everyone needs every day – whether you are young, old or in between.

Typically, people learn the most about money when a big life change happens. It’s usually those big events that turn into teachable moments as people are forced by the situation to learn about their options, choices and decisions to be made.

For those of us with young adult children – university students or those just starting out in their careers – the pandemic has been an incredible teachable moment when it comes to finances, with unexpected impacts to both sides of the balance sheet. Money in and money out. For example, students have had to move to online learning, which in most cases has resulted in modest savings. On the other hand, many have unexpectedly lost their jobs or had their income reduced. Others have moved home – or stayed home instead of going off to university or college. And, of course, many adults with young children have assumed the role of caretaker while working from home versus depending on daycare.

We believe financial literacy month should be every month, but why not take the opportunity this official “Financial Literacy Month” to discuss with your adult children some key financial lessons learned through this pandemic. There are surely many takeaways that will help them better prepare for future disruptions to their financial lives and potentially reduce financial anxiety going forward.

Here are three questions to discuss:

  1. Do you have a budget? Those that do have a budget have likely seen lots of changes. Income may have decreased. Or, working from home may have actually saved them money in a number of ways: daycare costs, transportation, eating out, clothing. Living through this experience of spending less should be a lesson to all Canadians about needs as opposed to wants and how to better control spending.
  2. Do you have an emergency fund or emergency savings? This pandemic has certainly hit home how important it is to have some money put away for a rainy day. Any savings your children have should be channeled into an emergency fund if they haven’t got one.
  3. Do you have the appropriate investments to help you meet your goals? Many people second guessed their risk tolerance levels when the markets crashed in March. Young people who are just starting to experience investing may shy away from the markets due to the volatility. But, as what typically happens in market crashes, there was a rebound. Young investors are in a great position now to take advantage of market growth over the long term.

Bottom line, now is a great time to talk to your children about money. Introduce them to your investment advisor who can walk them through the ins and outs of money management and investing. While money can’t buy happiness, being in control of your finances can certainly lead to less stress and less anxiety about money.

Learn more about how you and your family can get the most out of Financial Literacy Month by contacting one of our Investment Advisors today.