Tuesday 3 May 2016

Gardens and Investments: What Springs to Mind? - What's On Your Mind - May 2016

Every spring it is the same thing, we start working on our plan for a great and appealing yard.  If we own a home, the job begins with cleaning up our yards after a long winter’s sleep.  We may start trimming back some hedges, preparing flower beds and spreading grass seed to thicken up our lawns.  We will weed and feed and hope that our grass is better than last year. We know that adding the proper fertilizer will make a big difference in how our grass looks.

Near the end of May we start planting our flowers and hope for a pretty yard when we are in full bloom assuming the weather is good to us. 

Over the summer we keep busy with ongoing yard maintenance; such as weeding, cutting the grass and constant watering of our flowers and grass.  Ongoing maintenance is the key to our garden’s success.

Our plan for the yard is still dependent on what nature does but for the most part we do the best we can to make sure we are successful.

Wow.  Have you ever thought about how similar having a nice yard is compared to what we need to do to be successful with our investments? Both require a lot of work. You need to review your plan annually to see if any changes have to be made.  Sometimes you have to weed out the bad stuff and continue to properly invest (fertilize) so that every year your investments are more likely to be headed in the right direction to fulfill your financial goals.  You need to continue ongoing maintenance but also, sometimes the markets (weather) will do what it does and we have to make the changes where necessary to accommodate this. 

Some things are in our control and some things are not.  What is in our control is the time, thought and action for trying our best to be successful.  Yards or our financial goals; both take a lot of work.  When you fertilize your grass, or invest in your future, the effort you put in today will give you the good foundation you need for tomorrow.  Happy growing.

Recent Budget; Gifts from the government or more penalties? - What’s On Your Mind? April 2016

It is that time of the year again when the government determines our future.  Will we be able to retire on target or do we have to push back the date again?  I am highlighting the affects the new budget will have on your lifestyle as I interpret it.

Pension splitting for seniors has been left alone so I consider this as the first gift the government is giving.  Guaranteed Income Supplement (GIS) may also be going up for some seniors to an increased maximum amount of $947 per year.

UCCB (Universal Child Care Benefit) will be replaced by new monthly tax-free payments under the Canada Child Benefit (CCB) commencing July 1st, 2016.  Annual benefits for children under 6 will increase to $6,400 and $5,400 for children 6 to 18.  The amounts start to get clawed back with a household income over $30,000 and is eliminated entirely for incomes over $190,000.  Another gift.
Tax credits for children’s arts and fitness will be phased out the end of 2017.  I consider this a penalty.

Budget 2016 has also eliminated the education and textbook tax credits effective January 1st, 2017. 
OAS and GIS benefits will revert back to seniors at age 65.

For investors that have taken advantage of the corporate class mutual funds you will no longer have the benefit of delaying the deemed disposition.  This means if you are moving from one fund to another fund that is not just a fee or expense change, you will trigger a capital gain or loss.  This will take place effective October 1st.

October 1st, 2016 is also the date for Principal Protected Notes and how they will be taxed. 
There are also changes coming for private corporations that will close some loopholes regarding the use of life insurance policies to distribute amounts tax-free that would otherwise be taxable.


You can decide if this budget is giving you some gifts while others will feel the penalties.  Remember though, it is what it is so you must plan around the new rules.  Please feel free to call me or your accountant should you wish to discuss further the impact on you personally.