To take advantage of the lowest tax rate, certain processes allow you to split your income with family members.
This measure will be of particular interest to you if your income is significantly higher than that of your spouse (married or common-law).
Splitting can take place during your active life or at retirement. There are several income splitting processes:
- Contributing to your spouse’s RRSP
- Granting your spouse a prescribed rate loan they can then invest in the investment product of their choice
- Making a gift to your adult child
Decide what you’ll do:
- do volunteer or community work
- take classes
- do sports or leisure activities
- move (e.g., to a condo, senior’s home, cottage)
- start a second career, become a consultant or work part-time
Don’t underestimate some things:
- Retirement span: this could be 15, 20 or 30 years, depending on your health and family history.
- Health: Protect your ability to do the things you want to so by guarding against unforeseen events (e.g., critical illness, long-term care facility, home care, private clinics).
- Return on your investments: protect your assets from inflation and market fluctuations.
- Your spouse: How your spouse’s lifestyle and uncertainty will influence your planning.
Your hard work and good planning have made it possible to live the life you always dreamed: surrounded by loved ones, enjoying the freedom to choose your lifestyle – which is a freedom you hope to give them too.
To increase the value of your inheritance
You’ve planned out an effective investment strategy to leave your loved ones an inheritance, but did you know that by including insurance in your strategy you could leave them even more?
With the Lasting Legacy Integrated Solution, you can protect your assets and, when you pass on, leave an even bigger tax-free inheritance to your loved ones.
This strategy gives you the combined benefit of a Wealth Management advisor working side-by-side with a Desjardins Insurance financial security advisor. * Together, they’ll find the integrated solution that works best for you so you can achieve your financial goals.
* Employee of Desjardins Financial Security, Financial Services Firm. Desjardins Insurance refers to Desjardins Financial Security Life Assurance Company, a provider of life and health insurance and retirement savings products.
Estimate the potential cost of your children’s post-secondary education by considering:
- their program of study (technical or university)
- whether they will attend a public or private CEGEP
- their place of study (Quebec, another Canadian province or abroad)
- where they will live during their studies (e.g., university dorm or apartment)
- the profession they might select
- any income from a part-time job
Use the Desjardins Registered Education Savings Plan simulator to determine the amount you’ll need to put aside.
Review your retirement plan annually to reflect any life changes:
- Personal factors
- Different lifestyle from the one planned
- Separation or divorce
- Premature death of spouse
- Critical illness
- Loss of independence
- Increased health and prescription drug costs
- Assisted living or nursing home costs
- Financial factors
- Low rate of return of guaranteed investments, stocks and bonds
- High market volatility
- Erosion of purchasing power due to inflation
Adjust your retirement budget annually to reflect:
- Variations in your sources of income
- Former employer pension plans
- Government pension plans
- Personal assets (RRSPs, RRIFs, LIFs, TFSAs, non-registered investments)
- Rental property income
- Compensation (part-time work, consulting or other)
- Unexpected expenses
- Complementary health care (e.g., orthotics, therapy, etc.)
- Specialized housing costs
- Increased health care costs (e.g., medication)
- If you have a spouse, make sure your budget takes this into account.
It may take several years from the time you decided to transfer your business to the time it actually happens. This complex process requires vision regarding your goals, family needs and business growth.
What’s your motivation:
- Reducing stress
- Freeing up capital or retirement income
- Letting your kids take over
Gauge the interest for taking over the business of the people around you (children, employees, associates or even competitors).
Choose your future:
- Full retirement
- Remaining active in the business as a consultant, coach or advisor
Analyze your concerns:
- Getting a fair price
- Minimizing the fiscal impact of the sale or of your premature death
- Contributing to the well-being of your employees
- Focusing on the longevity of the business
- Keeping the business in the family
- Preserving family harmony