Should parents dip into their savings to help adult kids?

In this video, Lise Andreana and Rob Carrick of The Globe And Mail answer questions about parents using their savings to help their adult children.

Lise explains the financial drawbacks of moms and dads helping their kids with a house down payment, and with basic living costs.

The 'Sandwich Generation' faces a financial squeeze

See video of Lise Andreana speaking with Rob Carrick of The Globe And Mail about the financial squeeze facing the 'sandwich generation.'

As Lise and Rob explain, this is the generation of people who are helping their adult children become financially independent, while also helping their aging parents with their financial needs.

The Cost of Caring for Aging Parents

In this video, Lise Andreana talks to Rob Carrick of The Globe And Mail about the cost of caring for aging parents.

Lise explains that in Canada medical costs are likely not the primary expense. Rather, the focus is on the time and effort parents will need as they age, and the impact this has on their adult children’s earnings.

7 tips to help you maximize your child’s RESP

1.      Start contributions early

• You can open an RESP as soon as your child has a SIN number. This can be applied for just after birth and many of our clients start their child’s plan around 2 months of age. 

2.      Make contributions regularly 

• Prepare for your child’s education by contributing monthly to an RESP. A little goes a long way. Even if you start off small (around $25 a month) it adds up over time.
• Regular contributions help smooth market fluctuations.
• Anyone can contribute to an RESP – a child’s parents, grandparents, aunts and uncles, or close family friends who may be able to contribute if you can’t right now. 

3.      Take advantage of the considerable benefits

• The federal government adds to your contribution up to a maximum of $500 per year, per child.  This is the Canada Education Savings Grant (CESG) and it is payable up to the year your child turns 17. For a full explanation of eligibility requirements, see the Government of Canada's CanLearn website.
• As long as your contributions remain in the plan they continue to gain interest income and are not taxed.
• RESPs are taxed in the hands of the student who uses them, so the tax rate is typically low.
• Flexibility of withdrawals: it’s up to you to decide how much money you withdraw and when. Withdrawals can be used for everything from tuition and books to living expenses.
• Family Plans are a great way to pool education funds for families with more than one child.

 4.      Plan early 

• Your child may be in diapers or just starting school but planning early for their education is the best route.
• We recommend, as a start, to take the monthly $100 Child Care Tax Benefit (for children under the age of 6) from the government, and put it straight into their RESP.  When you do this right away, from birth, you can come close to funding a good portion of your child’s education, completely funded by the government. If you can’t afford to use the entire $100 for an RESP contribution, something is better than nothing. Even $25 a month is a good start.
• If your child is under 17 it’s not too late to open an RESP

 5.      Don’t worry – RESPs cover a widerange of post-secondary options

•  Traditional college or university
• Technical or vocational school
• Typically all you need is proof of enrollment in a qualifying program.

6.      Really don’t worry – there are four options available to you if your child does not pursue post-secondary education 

• Leave the money in the RESP for future use.
• Replace the beneficiary with another child.
• Transfer the money to your RRSP.
• Close the RESP and withdraw the money. Any grants will have to be returned to the government.

7.      Team work – Personal Saving and Government Contributions 

• Don’t leave money on the table. Some people have enough money set aside for their child’s education without having to contribute to an RESP. Make sure to examine all the benefits of an RESP: See tip # 3.

RESPs are highly underused in Canada. Be sure to start early to maximize the benefits of compounding growth, government grants and tax sheltered savings. If you have questions about how an RESP works, or how an RESP fits into your overall financial plan, contact us.

The Benefits of Fee-For-Service

In this video, Peter Andreana explains how the Fee-For-Service approach to wealth management and investing provides many advantages for clients of Continuum II Inc.

Find out the positive impact this approach can have on your bottom line in this short video.

Peter also explains how he outlines the pros and cons of investment decisions to his clients and finds the "happy medium" for their financial plan.

The 70/30 Rule

Contrary to popular belief, financial planning is not just about saving.

Many people think that good financial planning is all about making sacrifices now and saving as much as possible in the present.

Peter explains how you can find a very effective balance between saving for later, and enjoying life now, with his 70/30 rule.

Find out more in this short video below:

Checks and Balances: A few tips to help you get financially focused

Working towards your financial freedom takes planning. It is important to make sure you are covering all your basis and not leaving any step out of the process. Working with a financial planner is important but you must also do your own work to make sure you are heading in the right direction for you life and lifestyle.

Sometimes creating checklists and to do lists that are tied to the seasons or quarterly can help you stay on track and focused on the end goal of financial freedom.

Here are just a few tips to help you achieve your financial goals.

1. Create a financial calendar
If you don't trust yourself to remember to check in on your investments regularly, check credit reports or pay your quarterly taxes then think about setting appointment reminders. There are lots of great online tools to help you with this but even just simply going into your calendar on your smart phone and setting reminders that will go off to prompt you to do a financial check in is enough.

2. Rebalance your portfolio once a year.
It is important to look at your account  every once in awhile to make sure your investment allocations still match your greater investing/financial goals. It is important to schedule meetings with your financial advisor to do the same. You need to be engaged and involved in your financial planning.

3. Verify your account beneficiaries to make sure your instructions are current
When was the last time you looked at who you set as a beneficiary on your insurance policies? Or your banking investments? Take some time to have a look at those things and make changes if necessary.

4. Review your progress on your financial goals to ensure you are on track
You may have made some financial New Year's resolutions when 2014 rolled in, such as increasing your retirement savings. How are you doing with that? Now might be a good time to re-evaluate and make some changes before the end of the year rolls around.

5. Get Organized
Don't leave all your papers, receipts and documents in disarray until the end of the year. Fall is a great time to start getting organized. Organizing your papers and accounts not only leaves you better prepared for tax season in the new year but also lets you know whether you're on track to reach your financial goals.

6. Here is a handy check list from the Government of Canada's Financial Consumer Agency of Canada. Check lists can help you see what you have already done but also helps you see what you still need to get done or at least consider.

RetirementCheckList

There are so many resources available from your financial advisor and on the Internet to help you manage your finances, investments and retirement planning. Checking in on your finances and investments a few times a year at least makes sure things are still on course and if they are not then you have time to correct them and work with your advisor to make sure you are working towards the same goal.