What would you do for better retirement benefits?

What would you do for better retirement benefits?

A recent survey finds that more than half of Canadians are worried about retirement.

When asked, 77% of Canadians said they would consider leaving their job, with all else equal, for better retirement benefits.

As an employer, these statistics should be alarming. If you had seven out of ten of your employees wanting to leave your company, it's time to make a change.

Acknowledging the desire Canadians have for an attractive retirement package, employers can take the opportunity to reevaluate their current offerings. By making even the smallest changes to your retirement offerings, it could help to retain current talent and become more attractive to new prospects.

More specifically, mid-sized to smaller companies should take note of what's being done by their larger competitors. A defined pension plan is something often offered by larger companies and is something that mid-sized companies may want to consider to help make their business more appealing to employees.

Ultimately, if reevaluating you retirement benefits is in the cards for your company, it is important to ask for your employees input. You might be surprised what they may want, or what they may forgo, to help provide security in retirement.

IMPORTANT information for anyone who has an IPP (Individual Pension Plan) with B2B Trustco

In a recent decision by B2B Trustco, a division of B2B Bank and a wholly-owned subsidiary of Laurentian Bank of Canada, they are getting out of the IPP business Effective May 1^st.  They are citing reasons of increased complexity and are unable to keep up with regulatory requirements.  This is forcing all IPP clients with B2B Bank/B2B Trustco to find a new home.  IPPs offer business owners an incredible opportunity no other Canadians have available to them, allowing them to save significantly more for their retirement while taking tax advantaged dollars out of the business as an expense.  If you find yourself with a B2B Trustco IPP and need to find a new home we would be happy to help, and can offer you lower IPP administration fees, lower Investment Management Fees (IMFs/MERs) and better investment options with a track record of great returns. 

 

Contact us today as the May 1^st deadline is approaching quickly. Office: (416) 855-9892 or Email us at info@c2inc.com

If you don’t have an IPP, here is a list of some reasons you should consider an Individual Pension Plan:

• Further tax sheltering in excess of RRSP contributions
• Additional tax deductible lump sum contribution at retirement on sale of assets of the company or sale of the company itself
• Full creditor protection
• Pre-planned retirement income
• Succession planning within a family business
• No payroll tax levied on IPP contributions (depends on province)
• All costs associated with the pension plan are tax deductible to the company – including IMFs (Investment Management Fees)
• Prescribed rate of return within the IPP by Pension Legislation, ensuring your retirement portfolio is always growing as it should

Mortgage Insurance

Your insurance should protect you, not your bank.

Mortgage insurance is designed to protect the bank. Protecting your mortgage with life insurance protects you.

Are you aware of the difference?

Let's take a closer look at how personal life insurance compares with the mortgage insurance that's offered by most lending institutions.

Lending Institutions' Mortgage Life Insurance

• Decreases as your mortgage is paid down
• Premiums remain level, even though your mortgage is decreasing
• Terminates when your mortgage is paid off
• Proceeds are paid directly to the bank
• The lending institution owns the policy
• You cannot switch your mortgage insurance to another lender. If you find a better rate, you may have to re-qualify medically for the mortgage insurance protection.
• Premiums are determined by the lending institutions insurance provider and based on the value of the mortgage

Personal Life Insurance

• Coverage remains level for the duration of the mortgage
• Premiums remain level, while your coverage remains level
• Coverage remains in effect after your mortgage is paid off
• Coverage is paid directly to your beneficiary and used according to their needs
• You own the policy
• You are free to switch your mortgage while maintaining your life insurance coverage
• Premiums are determined by the insurer and are based on many factors including insured amount, age, health and time frame. Often personally owned life insurance cost less than mortgage insurance

Contact our office today and let us help you build a life insurance plan that will protect you and your estate.

info@c2inc.com or (905)332-6633

Reviewing your statement

Mutual Fund Investing
Understanding cost and value

 The following breaks down the cost of investing in mutual funds, and what you need to know about MER's (management expense ratio).

Management Expense Ratio (MER)

• You don't pay it directly
• It's the built-in cost of owning a mutual fund
• It's taken out of the fund before the performance is calculated

Example

Portfolio value: $100,000

Approximate value to invest in first year: $2,200 (2.2% MER)  

Breakdown the ongoing cost to invest

Mutual Fund Company

Investment management expertise

• Fund research
• Analysis
• Insight

Mutual Fund Dealer

• Processes investments
• Partners with investment representatives to keep your best interests top of mind
• Pays a portion of the trailing commission to your investment representative

Investment Representative

• Provides financial advice, service and a plan to help you stay on track
• Adjusts your plan for different stages of your life
• Helps you create savings habits that can pay off in the long run
• Offers access to a strong and stable company built on a foundation you can trust

Why it's worth partnering with an advisor
Partnering with a financial security advisor to create a sound financial security plan can help you deal with the inevitable bumps in life. On average...

• 60% of advised households feel they can deal with unexpected financial emergencies
• 65% of advised households believe they can deal with tough economic times
• 73% of advised households feel confident that their loved ones will be looked after financially if something should happen to them 

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Working with family- buisness and their advisors

When working with clients that are business owners my first instinct is to strive towards aligning the many advisors who may be around the table. 

The role taken by Continuum II Inc. is often as quarterback. We are the advisors responsible for keeping the eye on client goals and we do this with our Keys to Success™ document. We are also the ones, and often the only ones, who will have meetings with a focus on the softer and more emotional issues that may be at play.

When working with a number of advisors it is easy to end up with conflicting advice for clients, which can be confusing and frustrating for the business owner. This conflicting advice can sometimes come from the advisor’s, but it can also originate with the business owner themselves. (I call it the broken telephone – when someone tries to interpret what one advisor is saying and then tries to relay it to another advisor at a later date)

It may also stem from lack of awareness of the work that other advisors are doing. Things can get worse if advisors start angling for better positioning with the client and may criticize or minimize the work of others. (This is very difficult because how do you know if the criticism is warranted or not? There could be instances when one advisor is truly giving bad advice.) 

 Advisors must leave their ego and self-interest at the door to ensure everyone is truly working in the client’s best interest, but this is often easier said than done. Here are a few points which can help;

1. Clearly define roles and responsibilities of all advisors.

More than one advisor may focus on the same problem, with each being responsible for a different task. i.e. legal, accounting, insurance, investments. Each advisor should have a clear understanding of who is doing what, and be sure that no advisor gets left out of the picture. (this means you must know all the advisors and their roles and responsibilities)

2. Joint meetings with a well-defined agenda, clear objectives and expectations is KEY.
Clearly defining the goals and seeking input from each advisor all together pays huge dividends. This gives the opportunity for each advisor to hear what the others are planning. More importantly it gives the opportunity to give feedback on how what one advisor is doing and how it may be affecting the work of others (an example of this would be a lawyer suggesting a shareholders agreement shot gun clause which can clearly have accounting implications. OR an accountant suggesting the use of the capital dividend account for an insurance policy which the insurance advisor will need to set up with the correct ownership structure to have it work as the accountant intends). Sharing information contributes to successful teamwork and it is important for the advisors to agree on who will do what during the multi-party meeting.

3. Advisors should be able to give and receive constructive feedback.
This ensures that any hurt feelings are cleared and that disagreements can be put to rest to avoid negatively influencing future work together. There are likely going to be times when the advisors are not going to agree or may see alternative ways of solving a problem, this is normal and actually a healthy step towards ensuring the best outcome for the client. If there are never any tough questions and everyone is nodding their heads agreeing all the time, I would be concerned. In a fair and constructive way the advisors should be asking challenging questions of each other to ensure there isn’t a better way to achieve the clients’ goals.

4. Family meetings.
Once the advisors have found alignment, it's a good time to bring the family into the fold when it comes to a family run business. The family members, especially those not working in the business, don’t need all of the details but a big picture summary can often help set the stage for healthy relationships in the future. Conflicts between parents and children or siblings or spouses often arise when there is a lack of communication. (i.e. Dad didn’t want that, he wanted this!) All “dad” had to do was actually tell the adult children what he wanted and that future fight can be avoided. These meetings are often most effective when there is a third party moderator.

Overall, there is a lot that goes into building and running a successful family business, but one thing I know for sure is that it is worth spending the time to get it right! (and that may not be the first time).