• Are GICs a good investment choice?
• How I help you achieve your DREAMS

Are GIC’s a good investment choice?

What Is A Guaranteed Investment Certificate?
GICs is an investment product (like mutual funds, bonds) that guarantees you to protect your principle (the amount you put in) with a guaranteed income for a particular period of time.

How Do GICs Work?
When you purchase a GIC, you are essentially lending your money to the financial institution. At the end of the term you choose, the financial institution will return your money to you PLUS pre-determined interest.

For example today you can purchase a 2 year term GIC at 1.9%. This means if you invest $100, you will receive $101.90 in 730 days.

Where can I purchase a GIC?
You can purchase a GIC from a bank, a credit union, a financial institution and your Financial Advisor like myself. Be sure your financial advisor shops around for the best rate, if this is the investment you so choose.

Types of GICs:
Before you purchase a GIC, find out what option is available to you:

Cashable or Redeemable GICs – You can cash it in at any time based on the terms provided by the financial institution. If you cash it in before the term is complete, the financial institution will usually calculate the interest accrued to date. This option is available with most Financial Advisors.

Non-Redeemable GICs – You will not be able to redeem it until your term on your GIC is complete. This option is mostly available with banks and credit unions.

Index-Linked GICs – GICs that are linked to stock markets. This may also be known as Market-Linked GICs.

What are the Advantages of GICs?
Principle Protection: Depending on what you buy, money invested in GICs can be safe and secure. At the end of the term, you will get back your capital you original invested. However, if you have security in your mind, it is recommended that you talk to a Financial Advisor.

Safe Parking: If you are not sure where to invest your money for the long term, you can park your money in short-term GICS while you can search for other options.

What are the Disadvantages of GICs?
Liquidity: GICs are typically NOT easy to withdraw when you need your money right away. A high interest savings account offers better liquidity than GICs in most cases. With a GIC, your money is tied up and locked in for a specific period of time, i.e., one to five years.

Interest Income: If held in a non-registered account or a regular savings account, interest earned on a GIC is taxed at a higher rate, for example, taxed at your full marginal tax rate.

Subject to Inflation: Let’s say your GIC is giving you 2% interest. And consider that the annual inflation rate is 3%. If you keep $100 in your GIC for one year, you should have $102 in your hands after one year, right? Well, yes, technically, but that $102 is less than you started with. Due to inflation, you need $103 to buy same goods you would have bought with $100 a year ago. So actually, you lost money-$1, to be exact. Yes, real rates of return GICs can be negative or lower than what you actually see.

My thoughts on GICs:
I am not a fan of GICs. When we look at historic rates of returns on investments, GICs are the poorest performing investments in comparison to low and high risk mutual funds, the TSX, and individual stocks. I believe that you are better off in a conservative investment low risk investment that will allow you access to higher returns. If you need access to your cash in a short period of time under one year, you are better off with a high interest savings account. If you require an investment over a longer period of time of more than one year, you are better off seeking advice from a qualified Financial Advisor to design a custom plan for you.

Most Financial Advisors will not charge for their services to design a savings portfolio and investment plan for you. Your Financial Advisor should ask you the following questions before designing a plan for you:

1. Will you lose sleep if your investment loses money?
2. When will you need this money? In one year, five years, ten years or thirty years?
3. How much risk are you willing to assume in your portfolio?
4. Would you like to see steady continuous slow rising returns on your investment? Or are you ok with riding out the ups and downs of the market?

A qualified Financial Advisor can help you choose the investment that is right for you!

How I Can Help You Achieve Your Dreams

If we were sitting here three years from today, what needs to have happened, personally and professionally, for you to be happy with your progress?

Our firm specializes in making your dreams a reality.

Disability: “If you were too sick or hurt to work, what would your concerns be and how much income would you want your family to have?”

 Retirement: “What are your thoughts on retirement? How do you envision spending your 60s, 70s and 80s?”

Education: “What role do you see yourself playing, financially or otherwise, in the education of your children or grandchildren?”

Asset allocation: “How do you approach asset-allocation decisions in your investments? Has this changed over time, and how do you see it changing in the future?”

Major purchases: “What major purchases or expenses do you see occurring, say over the next three years? How about over the next three to 10? Over the next 10 and beyond?”

Survivor income: “Of all the things you look forward to in your future, how would your family’s objectives change if you didn’t make it home tonight? What would you want me to tell your survivors about your intentions for them?”

Janea Bellay, Your Financial, Insurance & Investment Advisor

Contact our financial planning office in Saskatoon today, I am happy to help you envision your Financial Plan!

 To remove your name from our mailing list, please click here.

Questions or comments? E-mail us at janea@janeabellay.com or call 306-281-3891.

LEGAL DISCLAIMER

Janea Bellay is an independent self-employed insurance and investment representative, licensed to sell insurance and investment products and services through Performance Financial Services Inc. This is an independent MGA brokerage, and part of the United MGA Group of Canada. Mutual funds are offered though Desjardins Financial Security Investments Inc. Commissions, trailing commissions, management fees and expenses may be associated with mutual fund investment. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. The information in this article is not intended nor should it be considered as providing specific legal or tax advice. Individuals should consult with their individual advisors to ensure that any information is applicable and appropriate to their specific situation.

Insurance attached to your home loan can be a poor deal, Ellen Roseman explains

Published On Sun Apr 22 2007
Toronto Star By Ellen Roseman Personal Finance Columnist

You’re buying a house and taking out a big loan to pay for it. Now, the bank is asking whether you want life insurance.

Reluctant to leave an unpaid debt when you die, you say yes. Within minutes, your application is approved and the cost is added to your mortgage payments.

For lenders, life insurance is an easy sell. They suggest it at a time when you’re vulnerable and have yet to do any comparison shopping.

And they make you sign a waiver form if you say no, agreeing not to hold the lender responsible if something bad happens to you.

Most people don’t realize that the life insurance sold by mortgage lenders is different from the policies sold by life insurance agents and brokers.

It sounds like a great deal at the time, but mortgage life insurance can be more expensive than insurance sold separately.

Click here to read more: http://www.thestar.com/Business/article/205853

IN THIS ISSUE:

• Do I pay down my mortgage or invest for retirement?
• Can a House be a Retirement Plan? By Peter Drake

Do I pay down my mortgage or invest for retirement?

I am asked a lot by clients if they should concentrate on paying off their mortgage, or concentrate on their retirement plan. When I explain to client’s that both areas need to be addressed at the same time, we look at interest rates, compound interest over time and their plans for retirement.

• Are you going to live in the same house forever?
• Do you plan on downsizing their home in retirement?
• What age do you foresee in paying off the mortgage and being able to retire?
• Will there be enough in your retirement plan to do both?
• All of these questions are addressed and then we come up with a plan!

This summer focus on getting a plan in place in pay down your debt and start on a retirement plan. Make it a goal for the fall to have your plan in place. Think about your goals for retirement and your future as you sit on your deck or in your backyard enjoying the summer heat and a cool drink!

I have included the following article from Peter Drake, Vice President of Fidelity Investments, an investment firm that has some great mutual funds that I use, on how Peter explains Paying Down Your Mortgage vs Investing for Retirement!

CAN A HOUSE BE A RETIREMENT PLAN?

By Peter Drake – March 12, 2010

http://www.advisor.ca/

The love of houses, whether they be single family dwellings, townhouses, condominium apartments or anything in between, has been pretty strong in recent months. Interest rates are low, house prices have been rising and some people, still turned off by the market volatility of the past couple of years, are viewing a home purchase as an alternative to investing in financial assets such as stocks or bonds.

I am often asked the same question advisors are: Should I invest in my home, pay off my mortgage or should I save and invest for retirement? Let me say right up front that comparing the investment value of a home with the investment value of financial investments is a complicated, tedious and often inconclusive process and I have deliberately left the tax considerations to the tax experts. Regardless, I think it is useful to review some of the key issues.

A house as an investment

Comparing the return on investment from owning a house to various financial investments isn’t easy. At first glance, one could simply compare the return over a period of a set amount of money invested in a house compared with various types of financial investments such as equities, bonds, cash and a combination of the three. The problem with doing that is there is so much more to consider.

Most home purchasers must borrow – usually a substantial amount – to buy their house. Even in a low-interest-rate environment, there is a cost to do so, which varies both with the interest rate and the amortization period of the mortgage. It is true some investors also borrow in order to invest, but it isn’t a requirement and many investors invest from their employment-related cash flow. So, the cost of borrowing effectively reduces the rate of return on the housing investment.

Similarly, people who don’t own houses still need a place to live. Rental payments should be factored into the equation comparing the return on a housing investment versus financial investments.

Housing markets, like financial markets, fluctuate. The rate of return on the purchaser’s investment will vary depending on the buy and sell dates. The volatility of house prices nationally was less than that of the S&P/TSX Composite Index over the past decade, though home owners in some parts of Western Canada might dispute that assertion. The point is unlike financial markets, where the extent of volatility is often related to specific financial asset classes, volatility in real estate markets is partly a function of geographic location. Another point here is it is possible to structure a financial investment to adjust its potential volatility. It is much less easy to do with an investment in a house.

On this point, diversification is either difficult or impossible for a real estate investment. Impossible if your one real estate investment is your home, merely difficult if you are fortunate to own more than one property in another district, town, province or country.

Most people who make financial investments give some thought to the liquidity of the investment (or at least their advisors do). Simply put, how easy is it to sell an investment and how quickly can you sell it? It is true not all financial investments are perfectly liquid (think about the past couple of years), but most are. A discussion of liquidity around residential real estate investments involves a number of factors. One is that unlike a stock or a bond, most houses have some unique characteristics, and that can affect both their sale price and how quickly they sell. Another is that real estate markets (which are largely regional or urban markets) are smaller than financial markets. A third is while a buyer or seller in a financial market has the option of stating the price at which they are prepared to do the transaction, a seller of residential real estate is required to do so. We have all heard stories of houses that were, in retrospect, priced either too low or too high.

Maintenance fees are also an issue. Nearly every financial investment has some maintenance costs. So do houses. There isn’t an easy way to separate house maintenance costs relating to the value of the investment versus those that make a house more inhabitable. As well, home owners pay property taxes.

We can’t forget transaction costs. For many, transaction costs around buying or selling a home are infrequent. But, they are often significantly larger (relative to the value of the investment) than the transaction costs associated with financial investments. And there are many of them, such as real estate commissions, lawyers’ fees, title insurance, land transfer taxes, and, for the prudent buyer, home inspection costs.

The house as a place to live

This comparison is easy. You can’t live in a mutual fund, a stock or a bond. A house keeps the rain off your head and the cold outside. More significantly, a house provides more than simple shelter. Economists refer to it as “psychic income”: a house becomes a home. Relationships develop and evolve, children are raised, and the local community becomes part of your social fabric and your life. It is true that you don’t need to own a home to obtain these benefits. However, the likelihood of obtaining these benefits as a renter may be somewhat less than as an owner. Factual evidence is hard to pin down on this point, but it may be that renters tend to stay in their rental accommodation for shorter periods of time than owners and it may be that owning simply engenders a different attitude than renting.

That is the good news. But, as the next section discusses, the ‘psychic income’ that we can receive from owning a home also puts some severe limitations on a house as a generator of retirement income, mainly because the attachment that many home owners feel toward their homes and neighbourhoods makes them reluctant to sell.

The house as a generator of retirement income

Houses don’t do terribly well as generators of retirement income. You can sell part of your investment portfolio, but not part of your home. It is true you can rent out some of your house, but that will depend on the type of dwelling and how you feel about being a landlord. You can also borrow against the value of your house, either through a reverse mortgage or a bank line of credit. Doing that does solve the potential problem of a reluctance to leave the family homestead, but it does so at the cost of running up a bill for interest on the loan. It can hardly be otherwise, since the lenders involved in these programs must get paid.

That leaves the choice of selling the house and purchasing a less-expensive residence or investing the proceeds and renting accommodation. Notice that I used the term “less-expensive”. The traditional term was “down-sizing”. The problem is down-sizing the physical size of where you live doesn’t necessarily mean down-sizing the price, although it certainly is possible to do so. And, it may mean moving out of a neighbourhood to which you have become strongly attached.

We have already discussed home maintenance costs. If you have purchased – and paid for – a house and have made the decision to remain there in your retirement, you will most certainly have maintenance costs. In fact these could be larger than when you were working since the house will be that much older by the time you retire.

Finally, an interesting side note to this discussion comes from the people concerned with defining adequate income coverage in retirement. On more than one occasion, I have heard the opinion expressed that if someone is a homeowner, her need to accumulate financial assets can be adjusted down accordingly. In other words, once an individual’s savings are exhausted, she can simply sell her house and fund her retirement with the proceeds. Those who hold this opinion clearly do not give any credence what so ever to the ‘psychic income’ component of home ownership.

The verdict:

By all means own a home, but also save for retirement. This is just about as middle of the road a conclusion as there is. But, often, middle of the road approaches are the ones that prove most effective. Saving for retirement and paying for a home should be viewed as complementary activities – each serving to support the other (Home Buyers’ Plans and a home equity loan for emergencies come to mind). Developing a tailored plan for optimizing both choices should help your clients wind up with the best possible solution.

——————————————————————————–

Peter Drake is vice-president, retirement & economic research, for Fidelity Investments Canada. With over 35 years of experience as an economist, he leads Fidelity’s research efforts in examining retirement in Canada today.

Why Use a Financial Advisor

Investment discipline.  Money is an emotional issue, and perhaps the single greatest benefit to using a financial advisor is my independent, impartial advice.

Experience.  Imagine what it’s like to spend your day working with clients, and talking with them about their financial situations. Over time, I develop a base of experience that enables me to steer you through various life stages and business cycles. Whether it’s saving for retirement or a child’s university years; whether you’re starting a business or dissolving one – I can help.

Balancing risk and reward.  I add value in many ways that do not show up in your portfolio statements. For example, I can prevent you from taking on undue risk or point out your self-destructive investment habits. The flip side of controlling risk is ensuring that you do take some risks so you are positioned to participate in good opportunities, particularly in equities.

The value of time.  I enable busy people like yourself to focus on their careers and families.

Tax efficiency.  I can help you maximize your investment returns by keeping you abreast of tax rules and learning about tax-efficient products offered by fund companies.

Consolidated information.  I consolidate massive amounts of financial information to help investors stick to the basics (such as diversification) and watch the details (such as avoiding overlap in fund holdings).

Referrals.  I can put you in touch with other financial services providers, such as tax and estate specialists.

Financial advisors help investors avoid emotional decisions and mistakes that occur during exuberant or difficult markets. I do this in the following ways:

• Systematic investment: Fixed, monthly investments into a fund (e.g., $500/month) allow investors to buy more units when prices fall and fewer units when prices rise. This can smooth out volatility.
• Plan: When I provide a plan, I often specify an asset allocation that is suitable to the investor’s needs (for example, 40% fixed income, 20% cash, 40% equities). So, if a certain category falls, I meet with you to rebalance to keep categories at their target weights. This provides a discipline that can help investors through difficult markets.
• Sounding board: I provide a “big picture” view of a portfolio. At times, certain elements of the portfolio will perform better than others, but those different performance patterns combine to produce a smoother overall experience. That’s the goal of proper diversification.
• Staying the course: When markets are volatile, many investors panic and head for the exits. Oftentimes, that’s exactly the wrong time to sell. I can talk through what’s happening in the markets and help you stay the course.

Janea Bellay, Your Insurance & Investment Advisor

Contact our financial planning office in Saskatoon today, I am happy to help you envision your Financial Plan!

Janea Bellay

Performance Financial Services Inc

217-3501 8^th Street East

Saskatoon, SK S7H 0W5

Tel: 306-281-3891

janea@performancefinancial.ca

To remove your name from our mailing list, please click here.

Questions or comments? E-mail us at janea@janeabellay.com or call 306-281-3891.

LEGAL DISCLAIMER

Janea Bellay is an independent self-employed insurance and investment representative, licensed to sell insurance and investment products and services through Performance Financial Services Inc. This is an independent MGA brokerage, and part of the United MGA Group of Canada. Mutual funds are offered though Desjardins Financial Security Investments Inc. Commissions, trailing commissions, management fees and expenses may be associated with mutual fund investment. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. The information in this article is not intended nor should it be considered as providing specific legal or tax advice. Individuals should consult with their individual advisors to ensure that any information is applicable and appropriate to their specific situation.

IN THIS ISSUE:

• Take the Financial Investor Literacy Test!
• Answers to the Quiz!
• Why use a Financial Advisor?

Take the Financial Investor Literacy Test!

1.    To the best of your knowledge, if you have invested in a mutual fund containing bonds or mortgages, and interest rates went up, what would happen to the value of your fund? Would the value of your mutual fund likely increase, decrease, or stay the same in value?

1. Increase in value
2. Decrease in value
3. Stay the same
4. Don’t know

2.     Let’s say you had a choice of receiving $1,000 in bank interest, $1,000 in rental income, $1,000 in dividends from a Canadian stock or $1,000 as a bonus from an employer. Which of these should give you the most dollars after deducting the taxes owed?

1. Dividends
2. Net Rental Income
3. Bank Interest
4. Bonus from my Employer
5. Its all the same after taxes
6. Don’t know

3.     To the best of your knowledge, life insurance is used to:

1. Provide a death benefit to my loved ones
2. Fund a Buy/Sell Agreement for Business Owners
3. Provide an employee benefit
4. Pay mortgages and debt
5. Secure a loan
6. Guarantee future insurability
7. All of the above
8. Don’t know

4.     Let’s say you’ve been investing in shares typical of those sold on the Toronto Stock Exchange for the last 20 years. To the best of your knowledge, in how many of those 20 years did the stock market go up?

1. 4 out of 20
2. 7 out of 20
3. 10 out of 20
4. 12 out of 20
5. 15 out of 20

5.     Which of the following investments over the long term that is since 1950, provided Canadians with the BEST returns before any taxes were due?

1. Canadian Savings Bonds
2. US Stocks
3. Long Term Corporate Bonds
4. Canadian Stocks
5. 5 year GICs
6. Don’t know

6.     And which of those same investments over the long term, since 1950, provided Canadians with the WORST returns before any taxes were due?

1. Canadian Savings Bonds
2. US Stocks
3. Long Term Corporate Bonds
4. Canadian Stocks
5. 5 year GICs
6. Don’t know

7.     To the best of your knowledge which of the following best describes a “Capital Gain”? Would it be:

1. The profit you make when you sell stocks or bonds
2. The annual increase in your net worth
3. The interest you received on an investment
4. The increase in value of your RRSP investments
5. Financial gifts from another family member
6. Don’t know

8.     If Ray starts investing at age 25 and invests $50/month, and Donna starts investing at age 40 at $150/month, at age 65 who has more saved in their retirement account? Based on a 7% interest rate?

1. Ray will have more in his account
2. Donna will have more in her account
3. They will have the same amount
4. Don’t know

Answers!

1. To the best of your knowledge, if you have invested in a mutual fund containing bonds or mortgages, and interest rates went up, what would happen to the value of your fund? Would the value of your mutual fund likely increase, decrease, or stay the same in value?
   1. Increase in value
   2. Decrease in value – You should have a good mix of bonds and equities in your portfolio so that when the markets go up you are protected and when the markets decrease you are protected!
   3. Stay the same
   4. Don’t know

2.     Let’s say you had a choice of receiving $1,000 in bank interest, $1,000 in rental income, $1,000 in dividends from a Canadian stock or $1,000 as a bonus from an employer. Which of these should give you the most dollars after deducting the taxes owed?

1. Dividends – Dividends have tax preferential treatment. If you are in a high tax bracket, ensure your advisor has looked at some tax advantageous investments in your portfolio.
2. Net Rental Income
3. Bank Interest
4. Bonus from my Employer
5. Its all the same after taxes
6. Don’t know

3.    To the best of your knowledge, life insurance is used to:

1. Provide a death benefit to my loved ones
2. Fund a Buy/Sell Agreement for Business Owners
3. Provide an employee benefit
4. Pay mortgages and debt
5. Secure a loan
6. Guarantee future insurability
7. All of the above – Most people are surprised by all the things life insurance can do. Talk to your Insurance Advisor and find out IF life insurance is right for you.
8. Don’t know

4.    Let’s say you’ve been investing in shares typical of those sold on the Toronto Stock Exchange for the last 20 years. To the best of your knowledge, in how many of those 20 years did the stock market go up?

1. 4 out of 20
2. 7 out of 20
3. 10 out of 20
4. 12 out of 20
5. 15 out of 20 – Historically the stock market UP years have outweighed the down years!

5.     Which of the following investments over the long term that is since 1950, provided Canadians with the BEST returns before any taxes were due?

1. Canadian Savings Bonds
2. US Stocks – Again, its good to talk to your Investment Advisor about the right strategy for your portfolio.
3. Long Term Corporate Bonds
4. Canadian Stocks
5. 5 year GICs
6. Don’t know

6.     And which of those same investments over the long term, since 1950, provided Canadians with the WORST returns before any taxes were due?

1. Canadian Savings Bonds
2. US Stocks
3. Long Term Corporate Bonds
4. Canadian Stocks
5. 5 year GICs – Over the long term, these do not perform well.
6. Don’t know

7.     To the best of your knowledge which of the following best describes a “Capital Gain”? Would it be:

1. The profit you make when you sell stocks or bonds – Currently 50% of realized capital gains are taxed in Canada at an individual’s tax rate. Some exceptions apply, such as selling one’s primary residence which may be exempt from taxation. Capital gains made by investments in a Tax-Free Savings Account (TFSA), are not taxed. Ask your advisor how this benefits you.
2. The annual increase in your net worth
3. The interest you received on an investment
4. The increase in value of your RRSP investments
5. Financial gifts from another family member
6. Don’t know

8.     If Ray starts investing at age 25 and invests $50/month, and Donna starts investing at age 40 at $150/month, at age 65 who has more saved in their retirement account? Based on a 7% interest rate?

1. Ray will have more in his account – Ray will have invested $24,000 and Donna will have invested $45,000. But because of compound interest, Ray’s investments have stayed invested longer. Therefore at age 65 Ray will end up with about $132,000 and Donna will end up with about $122,000 at 7% interest. The earlier you start investing the better!!
2. Donna will have more in her account
3. They will have the same amount
4. Don’t know

Why Use a Financial Advisor

Investment discipline.  Money is an emotional issue, and perhaps the single greatest benefit to using a financial advisor is my independent, impartial advice.

Experience.  Imagine what it’s like to spend your day working with clients, and talking with them about their financial situations. Over time, I develop a base of experience that enables me to steer you through various life stages and business cycles. Whether it’s saving for retirement or a child’s university years; whether you’re starting a business or dissolving one – I can help.

Balancing risk and reward.  I add value in many ways that do not show up in your portfolio statements. For example, I can prevent you from taking on undue risk or point out your self-destructive investment habits. The flip side of controlling risk is ensuring that you do take some risks so you are positioned to participate in good opportunities, particularly in equities.

The value of time.  I enable busy people like yourself to focus on their careers and families.

Tax efficiency.  I can help you maximize your investment returns by keeping you abreast of tax rules and learning about tax-efficient products offered by fund companies.

Consolidated information.  I consolidate massive amounts of financial information to help investors stick to the basics (such as diversification) and watch the details (such as avoiding overlap in fund holdings).

Referrals.  I can put you in touch with other financial services providers, such as tax and estate specialists.

Financial advisors help investors avoid emotional decisions and mistakes that occur during exuberant or difficult markets. I do this in the following ways:

• Systematic investment: Fixed, monthly investments into a fund (e.g., $500/month) allow investors to buy more units when prices fall and fewer units when prices rise. This can smooth out volatility.
• Plan: When I provide a plan, I often specify an asset allocation that is suitable to the investor’s needs (for example, 40% fixed income, 20% cash, 40% equities). So, if a certain category falls, I meet with you to rebalance to keep categories at their target weights. This provides a discipline that can help investors through difficult markets.
• Sounding board: I provide a “big picture” view of a portfolio. At times, certain elements of the portfolio will perform better than others, but those different performance patterns combine to produce a smoother overall experience. That’s the goal of proper diversification.
• Staying the course: When markets are volatile, many investors panic and head for the exits. Oftentimes, that’s exactly the wrong time to sell. I can talk through what’s happening in the markets and help you stay the course.

Janea Bellay, Your Insurance & Investment Advisor

Contact our financial planning office in Saskatoon today, I am happy to help you envision your Financial Plan!

To remove your name from our mailing list, please click here.

Questions or comments? E-mail us at janea@janeabellay.com or call 306-281-3891.

LEGAL DISCLAIMER

Janea Bellay is an independent self-employed insurance and investment representative, licensed to sell insurance and investment products and services through Performance Financial Services Inc. This is an independent MGA brokerage, and part of the United MGA Group of Canada. Mutual funds are offered though Desjardins Financial Security Investments Inc. Commissions, trailing commissions, management fees and expenses may be associated with mutual fund investment. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. The information in this article is not intended nor should it be considered as providing specific legal or tax advice. Individuals should consult with their individual advisors to ensure that any information is applicable and appropriate to their specific situation.

IN THIS ISSUE:

• Develop a Retirement Vision
• What you will get from Janea Bellay as your Financial Advisor

Develop a Retirement Vision

If you don’t know where you are going, you will probably end up somewhere else.

—Lawrence J. Peter

When most people think of retirement, they imagine leaving a job they’re tired of, getting out of the rat race, and leaving the pressures of employment behind. Often retirement is viewed as a reward for time in the workforce and a benefit of successful financial planning.

But retirement is so much more than giving up a job and relaxing. Retirees are entering one of the most exciting and challenging stages of their life. It can be a time to draw on personal and professional experiences to open new doors of opportunity and education. It can be a time to realize their potential and accomplish goals previously delayed by careers and raising a family.

Although the opportunities are endless, a successful retirement doesn’t come without its hurdles. There are many things to consider in order to get it right, such as living on a reduced income, creating a health and wellness strategy, and evaluating relationships. Also important is the allocation of personal time, determining living arrangements, and recognizing the change in social roles. There is also the unfortunate but necessary adjustment to the eventual death of loved ones.

During the first days, weeks, or maybe even months of retirement, people often experience a blissful honeymoon-like feeling. No boss, no job, no worries! Just time to sit around and do whatever crosses your mind. During this period, people generally have little motivation to plan for the future.

But as the honeymoon period winds down, a number of newly minted retirees report a feeling of disenchantment. Retirement no longer feels like an extended holiday. Time begins to weigh heavily on their shoulders. Playing golf five times a week begins to feel like a chore. Projects around the house lose their appeal, and there can be a feeling that causes retirees to ask the question, “Is this all there is?” Frustration and disappointment can mount as some retirees get caught in this vortex and are unable to get out.

The life we lead is a result of the choices we make. That means in pre-retirement and retirement years, it’s important to make the right choices—ones that build a fulfilling and energized retirement. The majority of successful retirees recognize the power of creating a realistic retirement vision and an action plan to achieve it. Armed with this mental model, they are able to make sound choices and progress toward their desired results.

WHERE I COME IN, AS YOUR ADVISOR

As an advisor, I am in a unique position to assist you in formulating a clear and focused retirement vision. And NOT just financially. In a way, I act as a coach and prepare you for the next phase of your life. It is equally important for you to consider how you will spend your time as it is for ME to know how you will spend your money.

I begin by encouraging you to take time to visualize what the word “retirement” means to you. What is it that attracts, scares, or excites you?

You should write out a description of your retirement life. What are you doing? What are you accomplishing? You need to be as descriptive as possible and should consider the following questions:

In retirement:

• What makes me happy?
• How much money do I have?
• What possessions do I own?
• How am I spending my time?
• Who is in my retirement picture?
• How is my health? How do I feel?
• How are my relationships with my spouse or partner, children, other family members, and friends?

You should imagine yourself in your first six months of retirement, then at one and two years out. Visualize yourself at the end of your retirement when you are 90, 95, or 100+. What are you most proud of? What have you done that has brought happiness to yourself and to others? What legacy will you leave behind?

Most of us know some people who have made a successful retirement. What is it about those people that you admire? Is it their family relationships, their energy and enthusiasm, or perhaps their overall sense of well-being?

Think of those challenged by retirement. In your  opinion, what are you doing or not doing that makes them less successful? Is it the exorbitant amount of time they spend watching television, their lack of adventure, or possibly a sense of helplessness toward this ever-changing world?

Once you have recorded a well-thought-out retirement vision, you should share it with a partner or spouse, close friends—and of course with myself, your advisor. This process of sharing will provide different perspectives and help shape the final vision.

Optimism is key throughout the retirement visioning process. You need to focus on the rewards of a balanced retirement, and on the feeling of being complete, enriched, and financially secure. Retirement visions should be reviewed and rewritten as often as necessary, until the vision feels right and is in line with what you want, need and believe.

Each meeting, we should review your retirement vision and review what is working and what is not. I can then identify changes if needed and help you develop ideas and solutions.

FOR EXAMPLE

Frances, a busy 63-year-old supervisor, is employed with a major manufacturing company. Though for years she contributed to her retirement savings program, retirement wasn’t part of her everyday thinking. It was just something that would happen down the road.

Recently as Frances’s financial advisor, I encouraged her to visualize retirement. Together we explored her needs, wants, and beliefs. As a result, Frances began to visualize what she wanted from retirement. She imagined herself getting back into tennis, being fit, and exercising regularly. She visualized herself volunteering and giving back to her community. Frances began taking the first steps to building her retirement future. And with my help, we can make sure she accomplishes all of her goals.

Frances is very satisfied with the understanding and assistance she received from myself, her advisor.

Financial management is a large part of the retirement picture, but it is not everything. Listening to what you want to accomplish and your goals and needs are equally important and need to be taken into consideration.

What you will get from Janea Bellay as your Financial Advisor

Investment discipline.  Money is an emotional issue, and perhaps the single greatest benefit to using a financial advisor is my independent, impartial advice.

Experience.  Imagine what it’s like to spend your day working with clients, and talking with them about their financial situations. Over time, I develop a base of experience that enables me to steer you through various life stages and business cycles. Whether it’s saving for retirement or a child’s university years; whether you’re starting a business or dissolving one – I can help.

Balancing risk and reward.  I add value in many ways that do not show up in your portfolio statements. For example, I can prevent you from taking on undue risk or point out your self-destructive investment habits. The flip side of controlling risk is ensuring that you do take some risks so you are positioned to participate in good opportunities, particularly in equities.

The value of time.  I enable busy people like yourself to focus on their careers and families.

Tax efficiency.  I can help you maximize your investment returns by keeping you abreast of tax rules and learning about tax-efficient products offered by fund companies.

Consolidated information.  I consolidate massive amounts of financial information to help investors stick to the basics (such as diversification) and watch the details (such as avoiding overlap in fund holdings).

Referrals.  I can put you in touch with other financial services providers, such as tax and estate specialists.

Financial advisors help investors avoid emotional decisions and mistakes that occur during exuberant or difficult markets. I do this in the following ways:

• Systematic investment: Fixed, monthly investments into a fund (e.g., $500/month) allow investors to buy more units when prices fall and fewer units when prices rise. This can smooth out volatility.
• Plan: When I provide a plan, I often specify an asset allocation that is suitable to the investor’s needs (for example, 40% fixed income, 20% cash, 40% equities). So, if a certain category falls, I meet with you to rebalance to keep categories at their target weights. This provides a discipline that can help investors through difficult markets.
• Sounding board: I provide a “big picture” view of a portfolio. At times, certain elements of the portfolio will perform better than others, but those different performance patterns combine to produce a smoother overall experience. That’s the goal of proper diversification.
• Staying the course: When markets are volatile, many investors panic and head for the exits. Oftentimes, that’s exactly the wrong time to sell. I can talk through what’s happening in the markets and help you stay the course.

Janea Bellay, Your Insurance & Investment Advisor

Contact my office today, I am happy to help you envision your Financial Plan!

To remove your name from our mailing list, please click here.

Questions or comments? E-mail us at janea@janeabellay.com or call 306-281-3891.

LEGAL DISCLAIMER

Janea Bellay is an independent self-employed insurance and investment representative, licensed to sell insurance and investment products and services through Performance Financial Services Inc. This is an independent MGA brokerage, and part of the United MGA Group of Canada. Mutual funds are offered though Desjardins Financial Security Investments Inc. Commissions, trailing commissions, management fees and expenses may be associated with mutual fund investment. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. The information in this article is not intended nor should it be considered as providing specific legal or tax advice. Individuals should consult with their individual advisors to ensure that any information is applicable and appropriate to their specific situation.

Here’s what you need to be doing now for your retirement.

Sure you love your job, but do you want to be doing it when you’re 90?

You keep hearing it, and it’s true: it’s never too early to start putting money away for your retirement. But how much? Whether you’re years from turning in your employee pass card or already making your retirement travel plans, this guide will help you estimate your retirement income and make a savings plan.

Three steps in retirement strategy

1. Estimate your total retirement income. The first step is to determine how much after-tax income you will get when you retire. Include income from all government programs such as Canada Pension Plan (CPP) and Quebec Pension Plan (QPP), employer-sponsored pension plans, other retirement income programs and other sources such as investment and rental income and part-time employment.

2. Estimate your retirement needs. The second step is to decide how much after-tax income you’ll need. This largely depends on your chosen lifestyle and your age at retirement. If you aren’t sure what your needs will be, it’s best to pick a target based on a percentage of your pre-retirement income. Although most financial planners suggest a target of 70 per cent, it’s probably wise to shoot a bit higher if you can. People are living longer and it’s surprising how fast money can go when you have time to spend it.

Generally retirees find certain expenses are significantly reduced, while others are higher.

Once you’ve had a chance to consider the effect that retirement will have on your living expenses, compare your estimated income and deductions just before retirement with those just after retirement. For example, if your goal is to generate 80 per cent of your pre-retirement net income and your estimates reveal that you’ll need more than that to fund the lifestyle you want, the difference between the two figures will have to come from personal savings.

3. Establish a retirement savings program as soon as possible. The final step is to establish a program to help you reach your savings goal. Most important is to decide what percentage of current income you can set aside to meet your savings objective and how long it will realistically take to achieve it. Next you must decide how your savings will be invested. Finally, retrace these steps every few years to ensure that your retirement plan is still on target.

Analyzing your retirement income needs

Next you need to estimate your own retirement income and expenses as well as any savings that might be required to meet your objectives. While it’s fairly straightforward to pinpoint what your RRSPs, investments and savings are worth today, the calculations to project their value when you do retire – which could be some time down the road – are rather tricky. Similarly, while it shouldn’t be too hard to estimate your retirement expenses in today’s dollars, the math to project those costs in retirement is again rather advanced. We suggest that instead of wading through complex formulas, talk to a Financial Advisor. They will have special calculators or programs that will crunch the numbers for you once you supply the required information. When you have the numbers you need, contact a Financial Advisor. Most of the time they can provide you free advice of what you would need to do to reach your goal.

Meeting the shortfall

If you are like most Canadians, this exercise will probably identify a shortfall of how much you’ll have available to fund your retirement. Remember, too, that this is only a snapshot. The amount of income you can depend on from government sources may be much lower by the time you retire, so it pays to go through this exercise at least every few years.

If you have identified a shortfall and you aren’t planning on winning the lottery, you’ll have to develop one of the following strategies to solve your problem.

1. Make maximum use of your RRSP, pension plan or Tax Free Savings Account. If you aren’t already making the maximum allowable contribution to these accounts, do so. These are the most effective places to direct your savings. But talk to a Financial Advisor first to determine if its advisable to maximize one over the other for your situation.

2. Resolve to start saving more. Increasing the amount of money you save will probably entail a thorough review, and possibly a reduction, of monthly expenditures, but it’s not the end of the world. A more austere budget will force you to choose between nonessential current expenditures and a better standard of living at retirement.

3. Consider increasing your equity exposure. If you have the time to ride out fluctuations in the market, a hard analysis of your current situation might cause you to consider moving more of your investment portfolio into more aggressive assets such as equities. They entail a higher degree of risk than fixed-income and other types of investments, but the rewards, if you have enough time to wait for them, can significantly boost your retirement income.

Janea Bellay, Your Insurance & Investment Advisor

Janea Bellay is an independent insurance and investment advisor, specialized in a unique 360 degree financial planning approach for individuals and families:

   Liquidity accounts – Your spending, savings and retirement accounts

   Family Security – Maintaining life insurance for all life’s unexpected financial needs

   Family Protection – Maintain your current lifestyle even if there are unexpected illnesses such as cancer, heart attack or a stroke

   Retirement Planning – Are you putting enough away and into the right investments to retire successfully?

Contact our office today to have your questions answered!!

To remove your name from our mailing list, please click here.

Questions or comments? E-mail us at janea@janeabellay.com or call 306-281-3891.

LEGAL DISCLAIMER

Janea Bellay is an independent self-employed insurance and investment representative, licensed to sell insurance and investment products and services through Performance Financial Services Inc. This is an independent MGA brokerage, and part of the United MGA Group of Canada. Mutual funds are offered though Desjardins Financial Security Investments Inc. Commissions, trailing commissions, management fees and expenses may be associated with mutual fund investment. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. The information in this article is not intended nor should it be considered as providing specific legal or tax advice. Individuals should consult with their individual advisors to ensure that any information is applicable and appropriate to their specific situation.

IN THIS ISSUE!

March 1, 2010 is the deadline to have a 2009 RRSP contribution on your tax return. This issue will discuss how to get an RRSP, is it right for you, how to boost your RRSP, and other tax credits available to reduce the amount of tax you pay to the government!

• What You Should Know About RRSPs
• Get Your RRSPs Working Harder For You
• Want an extra 35% Tax Credit? – SaskWorks & Golden Opportunities Funds

What You Should Know About RRSPs

Interested in RRSPs but don’t know how to get started? This quick and easy introduction to RRSPs is a great first step.

Do RRSPs have you scratching your head? Don’t worry: You’re not alone. Although 68% of Canadians have a Registered Retirement Saving Plan (RRSP), that leaves nearly one-third of Canadian without. Some non-RRSPers choose to plan for retirement in other ways, primarily through employer-sponsored pensions and others are financially savvy types managing their investments using other vehicles.

But there’s also another group who aren’t buying in because they think they can’t afford it, or they simply have no idea how to get started. If you’re in that group, this article is for you.

Why you need an RRSP

Whether you’re financially savvy or not – but especially if you’re not – RRSPs are a fantastic way to save for retirement. Think of an RRSP account as a lockbox for your savings, only better. Here’s why.

• Contributions are tax deductible, bringing down your gross income for income tax purposes.
• Your RRSP is a tax shelter. You don’t pay tax on your investment income, until it’s withdrawn, meaning the overall value grows much faster.
• You won’t be taxed on your RRSP until you make withdrawals, presumably during retirement. It will be taxed as income – most likely at a lower rate since you’ll be earning less then as compared to now, your peak earning years.

How do I set up an RRSP account?

You can set up your RRSP through a Financial Advisor like myself.

Meet with a Financial Advisor so they can walk you through the process and the different types of RRSPs they offer.

RRSPs are investment portfolios, and returns will vary depending on market conditions. Your RRSP portfolio may contain mutual funds, savings deposits, treasury bills, GICs, equities and/or other options.

Talk with your Financial Advisor to find the mix that works best for you given your tolerance for risk and potential reward, as well as whether an individual or spousal RRSP would be best for you.

How much do I have to contribute?

You can find your individual allowable contribution (i.e., your maximum contribution for the tax year) on the Notice of Assessment you received from Canada Revenue Agency on your previous year’s tax return.

In recent years, according to an RBC-commissioned poll, the average annual Canadian contribution was just under $6,000.

$6,000! How do I find that kind of money?

The easiest ways to maximize your contribution is to:

• Take out a low-interest RRSP loan from the same financial institution where you open your RRSP account;
• Sign up for biweekly or monthly contributions withdrawn directly from your bank account; or
• Both of the above.

Who doesn’t need an RRSP?

If you’re in the lower income brackets under $30,000, and without prospects for retirement savings over $100,000, it may not be worthwhile to scrounge for money to pay into an RRSP. If you contribute while in a low income tax bracket, then withdraw your funds while also in a low income tax bracket, you won’t see any tax savings. Unlike a high or middle earner who gets tax breaks by reducing her taxable income while paying in during her peak earning years, and more tax breaks when withdrawing when retired and in a lower income bracket.

After your RRSP matures and is rolled into a Registered Retirement Income Fund, withdrawals will be fully taxable. And if you qualify for the government’s Guaranteed Income Supplement for low-income seniors, it may be subject to claw-backs. You may see similar claw backs to social housing, transportation and prescription drug benefits. Chances are the income brought in by the RRSP withdrawals may not make up for the benefits lost. In your case, socking savings away in a bank account is a safer bet.

Bottom line

For everyone else, RRSPs remain a smart idea.

If you’re one of the 60% of Canadian workers (and self-employed folks) who don’t have a company-sponsored pension plan, RRSPs are an excellent safety net and the most reliable way to ensure you can live comfortably in your golden years.

Get Your RRSPs Working Harder For You

Borrowing to make an RRSP contribution can be beneficial. The real cost of the loan is offset by your income tax savings and the subsequent investment income accumulates tax free.

Although there’s lots of discussion about the best way to save for retirement, one thing is clear: If you’re going to use an RRSP, making the maximum contribution as early as you can is almost always the way to go. Not that most people do. Instead, they scurry to the bank during the last few days of February.

Unfortunately, when you invest this way, you’re always playing catch up, effectively remaining one year behind in receiving those tax refunds, and subsequently getting a lower overall return on a lower RRSP balance.

That’s why contributing to your RRSP year round makes so much sense. For starters, you aren’t faced with the problem of coming up with a large lump sum right before the deadline. More importantly, regular contributions force you to save, to “pay yourself first” — something that most of us have a hard time doing.

What do you do when the deadline for contributing is near and you just don’t have the money? Well, you can pass and make a bigger contribution next year, of course. Or, you can go into debt — which, while perhaps a bit counterintuitive, often makes financial sense.

As a rule, if you can repay your RRSP loan within one year, borrowing makes even more sense. Your cost will be the interest you paid for one year. Your gain will be one year of tax-deferred growth, which should far outweigh the debt cost over the long haul.

And, if you know you’re getting a tax refund, you can reduce the cost of borrowing still by applying your tax refund directly to your outstanding loan principal. With many mutual fund companies, payments are typically deferred for a couple of months anyway — although interest will still accrue — thereby giving you enough time to get your refund before you have to start paying back any money.

Want an extra 35% Tax Credit?
Think SaskWorks or Golden Opportunities Fund!

Why Should You Invest in a Saskatchewan Labour Sponsored Investment Fund?  

1. Substantial Tax Savings – These funds are RRSP eligible and therefore qualifies for a tax deduction. In addition you will receive a 15% Federal tax credit to a maximum investment of $5,000 as well as a 20% Provincial tax credit to a maximum contribution of $5,000 annually. The 35% in tax credits combined with the RRSP tax deduction provides for substantial tax savings for investors, reducing their net cash outlay and risk in an investment in this fund. 
2. Keeping Your Funds at Work in Saskatchewan – An investment in these funds ensures that your hard earned money is reinvested in Saskatchewan, thereby staying at work for you, your family and friends, and creating growth for Saskatchewan companies and new job opportunities.
3. Diversified Portfolio – Each of the funds investment philosophy is to invest in high growth sectors within a diversified portfolio across numerous industry sectors. A review of the portfolio of companies will show a wide range of investments, from agriculture, oil and gas, biotechnology, renewable energy, value added processing and technology.  
4. Saskatchewan Jobs – Your money is working right here in Saskatchewan by providing capital for companies to implement their business plans. This investment activity is creating quality jobs and providing young people with opportunity, optimism and a bright future. Your investment is making Saskatchewan a great place to live and work.  
5. Saskatchewan’s Best Companies – When you invest you’re actually investing in each of the local companies in the Fund`s portfolio. It gives investors like you an opportunity to invest in private, local companies. Chances are, you or someone you know works for one of these companies to support their family. When these companies prosper, so do you, and so does Saskatchewan. It’s a winning formula!

For more information on investing in SaskWorks or Golden Opportunities Funds, click here.

Janea Bellay, Your Insurance & Investment Advisor

Janea Bellay is an independent insurance and investment advisor, specialized in a unique 360 degree financial planning approach for individuals and families:

   Liquidity accounts – Your spending, savings and retirement accounts

   Family Security – Maintaining life insurance for all life’s unexpected financial needs

   Family Protection – Maintain your current lifestyle even if there are unexpected illnesses such as cancer, heart attack or a stroke

   Retirement Planning – Are you putting enough away and into the right investments to retire successfully?

Contact our office today to have your questions answered!!

Janea Bellay

Performance Financial Services Inc

217-3501 8^th Street East

Saskatoon, SK S7H 0W5

Tel: 306-281-3891

janea@performancefinancial.ca

To remove your name from our mailing list, please click here.

Questions or comments? E-mail us at janea@janeabellay.com or call 306-281-3891.

LEGAL DISCLAIMER

Janea Bellay is an independent self-employed insurance and investment representative, licensed to sell insurance and investment products and services through Performance Financial Services Inc. This is an independent MGA brokerage, and part of the United MGA Group of Canada. Mutual funds are offered though Desjardins Financial Security Investments Inc. Commissions, trailing commissions, management fees and expenses may be associated with mutual fund investment. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. The information in this article is not intended nor should it be considered as providing specific legal or tax advice. Individuals should consult with their individual advisors to ensure that any information is applicable and appropriate to their specific situation.

Volume II, Issue ix, January 2010

As you experience life’s inevitable transitions, your need for financial advice will change. These articles contain valuable information and insights on a variety of issues you may need to consider during this time in your life. I would be pleased to meet with you to answer any questions and to review your evolving financial needs.

Protecting Your Family With Proper Planning

The birth of your baby is the ideal time to review your insurance policies, your will, and power of attorney, and how your tax situation will change.

It is now even more important to ensure your loved ones are well looked after if anything should happen to you.

Here are a few topics to consider helping you prepare for some of the unexpected events that can happen in life.

Life Insurance

If something happened to you tomorrow, how much financial assistance would your family need to manage everyday living expenses – and for how long? Let’s discuss how much coverage you need and what type of coverage is best, as well as ways to save on your insurance costs. For example, if you and your spouse purchase policies together you can save significantly, and some plans will discount your costs by up to 15% if you pay annually instead of monthly. Remember that your premiums are lower when you’re younger, as statistically you’re generally healthier and will likely live a long time. If you are a non-smoker, you can also ask for ‘preferred’ rates, which may also reduce your premiums.

Disability Insurance

An employer often offers about two-thirds of your pre-tax employment income as part of a basic disability insurance package. In fact, according to Today’s Parent magazine, a 35-year-old woman is seven times more likely to suffer long-term disability than die before she turns 65. Th e last thing you want to worry about if you are sick is your finances. If you do not have disability insurance through your employer, ask me for a recommendation.

Critical Illness Insurance

This is a type of insurance protection that pays you a lump sum if you are diagnosed with a serious disease like cancer, or have a stroke or heart attack. This lump sum can help cover costs of treatment or child care or household costs as you look after your health.

Update Your Wills and Powers of Attorney

It is always important to keep your Will and Power of Attorney up-to-date with changes in your life – especially the birth of a new baby. When you have a legal Will, you control who receives your assets and money. Without a Will, the government decides who gets what. It’s also important to name a guardian for your child in your Will.

When choosing a guardian consider these issues:

• Will they be comfortable with the emotional and financial responsibilities of raising your children?
• What are their attitudes on how to bring up children – and are they very different from yours?
• If you are thinking of a married couple, how old are they? If something happens to them, who will be the backup guardians for your children? What will happen if they divorce? It may be better to appoint one as the primary guardian.

• How do they get along with the rest of your family, who will likely want to remain involved with your children and continue spending time with them?

Use this personal record keeper to gather important information that you can share with your loved ones including your executor or executrix.

Filing Your Tax Return

According to a recent study, having kids in Canada doesn’t save you much money in taxes. In 2004, couples with family incomes of $40,000 and two kids saved 9% in taxes because of tax implications of supporting children. However, if your income was over $80,000, the difference was only 1% and if your family income was over $120,000, there is no tax break for having a child.

However, there are some ways that your tax returns will change. Let’s discuss which tax breaks you can benefit from.

Child Care Expenses

If both partners work outside the home, the lower-income spouse can deduct a certain amount of child care expenses. For every child who is under the age of seven at the end of the year, you can claim up to $7,000 for daycare expenses. For every child over seven but under 17, you can claim up to $4,000 for daycare expenses. I can provide you with the rules and how this deduction can benefit your family.

Universal Child Care Benefit (UCCB)

This provides a $100 benefit per month per child under six years old. The money is taxed in the hands of the lower-income spouse. You will have to apply for this benefit.

Child Fitness Credit

You probably won’t claim this for an infant but as your child ages, you can claim a credit of up to $500 a year for eligible programs that enhance the child’s fitness.

I will be pleased to provide you with additional information on the various tax and insurance issues.

Individual Health & Dental Benefits

Your family is greatest asset. Health related expenses that are not covered by your provincial health plan can result in substantial costs. Now you can take advantage of a range of benefits and services for you and your family.

There is a plan to suit everyone’s health and budget. Dental services, prescription drugs, vision care and registered specialists are a few of the health expenses each of us faces without coverage.

By selecting a health plan and any combination of additional coverage options that bests fits your life, you can provide cost effective benefits for your family. You can also add new coverage options each year you renew your plan.

Individual coverage can be affordable and there is a plan to suit everyone. To obtain a quote or application form, call Janea Bellay at Performance Financial Services Inc. (306)281-3891 in Saskatoon or email janea@performancefinancial.ca.

Your family is important to you. Find out how you can get additional benefits!

Performance Financial Services Inc. 217—3501 8th Street East Saskatoon, SK S7H 0W5 Tel: (306) 281-3891 Fax: (306) 956-3141 janea@performancefinancial.ca www.janeabellay.com

Janea Bellay, Insurance & Investment Advisor

Janea Bellay is an independent insurance and investment advisor, specialized in a unique 360 degree financial planning approach for individuals and families:

   Liquidity accounts – Your spending, savings and retirement accounts

   Family Security - Maintaining life insurance for all life’s unexpected financial needs

   Family Protection - Maintain your current lifestyle even if there are unexpected illnesses such as cancer, heart attack or a stroke

   Retirement Planning – Are you putting enough away and into the right investments to retire successfully?

To remove your name from our mailing list, please click here.
Questions or comments? E-mail us at janea@janeabellay.com or call 306-281-3891.

LEGAL DISCLAIMER

Janea Bellay is an independent self-employed insurance and investment representative, licensed to sell insurance and investment products and services through Performance Financial Services Inc. This is an independent MGA brokerage, and part of the United MGA Group of Canada. Mutual funds are offered though Desjardins Financial Security Investments Inc. Commissions, trailing commissions, management fees and expenses may be associated with mutual fund investment. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. The information in this article is not intended nor should it be considered as providing specific legal or tax advice. Individuals should consult with their individual advisors to ensure that any information is applicable and appropriate to their specific situation.

Volume II, Issue viii, November 2009

IN THIS ISSUE:

• It’s Never Too Late
• Financial Planning for Women Only – PINK
• Individual Health Benefits now offered

It’s Never Too Late

If you are 40 or 50 years old and, until now, your efforts were focused on financing your children’s education and paying off the mortgage, you need a wake up call! Nothing has been done to prepare for your retirement. Is it too late?

 You may have discovered that government benefits such as Canada Pension Plan and Old Age Security will not provide adequately for your retirement. Don’t worry, you are not alone: a large number of people are approaching retirement without an established retirement financial plan.

 A recent study by Desjardins Financial Security shows that one half of Canadians who were hoping to retire by age 58 now believe that they will have to work longer. Other similar studies also reveal that many Canadians defer their retirement and seek part-time work to cover their shortfall.

 The key is to get going NOW

In case of a late start, it’s important to stop and assess the current situation. A comprehensive and integrated financial plan prepared by a consultant is the best way to get started and clarify things. The plan will consider your current lifestyle, your financial resources and the means of protecting your assets. Such an analysis will generate an action plan, which will focus on how to achieve your retirement objectives.

 Three options for retirement

One obvious solution to improve your retirement planning is to start immediately to save more. But be careful with volatility: a shorter investment outlook means that risk management becomes a key factor. You could be tempted to try and make up for lost time with inappropriate, high-risk investment vehicles. Not a good idea – get rich quick schemes rarely work out.

If you are in a position to invest larger amounts, you need high quality information. Do not hesitate to consult an investment professional.

 Living with less: compromising

The second option for late starters is to reduce their current standard of living in order to generate additional savings for retirement. In fact, several recent studies suggest that many Canadians are prepared to do exactly that. Upon retirement, it will be easier to bridge the gap between disposable income and standard of living. In addition to increasing the funds that you will have upon retirement, it is also important to pay off your mortgage and any other debt. The combination of increased funds at retirement combined with little or no debt can be a winning strategy.

 In addition, the value of your home can become a powerful financial resource. Imagine that your $400,000 house is entirely paid at retirement and your children have left the nest. Assuming that you could find an alternate home for $275,000, this would leave you with a tidy tax-free profit of $125,000 to generate supplemental income.

 Deferring retirement

The last option is probably the most prevalent. You can simply take up part-time work during the early years of their retirement in order to achieve your retirement objectives. This means continuing your professional activities and, in effect, choosing a progressive transition towards retirement.

 It is never too late to initiate retirement planning. The key is to start as soon as possible.

Upcoming Events

Join me this fall for this exclusive women’s only financial planning series.

P.I.N.K. embraces all the key elements of a financial plan

• Protection –  preserve your capital and protect your family from the risks
• Investment – learn how to grow your money and manage your wealth for the long term
• Need –  gain a better understanding of the unique financial challenges facing women
• Knowledge – access to insightful financial insurance and a network of expertise

Did You Know?

1. Less than 50% of all Canadian women own life insurance
2. 1 in 3 women are predicted to develop heart disease in their lifetime
3. 250,000 women were diagnosed with Cancer in 2002 (70% survived)
4. Women live 5-10 years longer, retire earlier, yet contribute 30% less to their RRSPs
5. 48% of women polled did not have a plan or regular meeting with an advisor

Seminar Dates:

• Life and Estate Planning – Tuesday, September 29, 2009, 6:30PM at Willows
• Protecting Family Assets – Tuesday, October 20, 2009, 6:30PM at Willows
• Introduction to Investing – Tuesday, November 3, 2009, 6:30PM at Willows
• Retirement Planning 101 – Tuesday, November 24, 2009, 6:30PM at Willows

RSVP: janea@performancefinancial.ca

Individual Health & Dental Benefits

Your family is greatest asset. Health related expenses that are not covered by your provincial health plan can result in substantial costs. Now you can take advantage of a range of benefits and services for you and your family.

There is a plan to suit everyone’s health and budget. Dental services, prescription drugs, vision care and registered specialists are a few of the health expenses each of us faces without coverage.

By selecting a health plan and any combination of additional coverage options that bests fits your life, you can provide cost effective benefits for your family. You can also add new coverage options each year you renew your plan.

Individual coverage can be affordable and there is a plan to suit everyone. To obtain a quote or application form, call Janea Bellay at Performance Financial Services Inc. (306)281-3891 in Saskatoon or email janea@performancefinancial.ca.

Your family is important to you. Find out how you can get additional benefits!

Performance Financial Services Inc. 217—3501 8th Street East Saskatoon, SK S7H 0W5 Tel: (306) 281-3891 Fax: (306) 956-3141 janea@performancefinancial.ca www.janeabellay.com

Janea Bellay, Insurance & Investment Advisor

Janea Bellay is an independent insurance and investment advisor, specialized in a unique 360 degree financial planning approach for individuals and families:

   Liquidity accounts – Your spending, savings and retirement accounts

   Family Security - Maintaining life insurance for all life’s unexpected financial needs

   Family Protection - Maintain your current lifestyle even if there are unexpected illnesses such as cancer, heart attack or a stroke

   Retirement Planning – Are you putting enough away and into the right investments to retire successfully?

To remove your name from our mailing list, please click here.
Questions or comments? E-mail us at janea@janeabellay.com or call 306-281-3891.

LEGAL DISCLAIMER

Janea Bellay is an independent self-employed insurance and investment representative, licensed to sell insurance and investment products and services through Performance Financial Services Inc. This is an independent MGA brokerage, and part of the United MGA Group of Canada. Mutual funds are offered though Desjardins Financial Security Investments Inc. Commissions, trailing commissions, management fees and expenses may be associated with mutual fund investment. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. The information in this article is not intended nor should it be considered as providing specific legal or tax advice. Individuals should consult with their individual advisors to ensure that any information is applicable and appropriate to their specific situation.

Volume II, Issue vii, October 2009

IN THIS ISSUE:

•   Invest In Your Life – October is Breast Cancer Awareness Month
•   Financial Planning for Women Only – PINK
•   Individual Health Benefits now offered

Invest in Your Life

October is Breast Cancer Awareness Month.  I thought I would dedicate this newsletter to informing you of the options available to you to protect your retirement income, to protect your income now and protect your family against a financial hardship, should it occur.

 There’s never a good time to get a critical illness. But there is a bad time. Just ask one of the almost 14,000 Canadians diagnosed with cancer last month. With all the turbulence in the markets, you may be wondering about your financial plans.

 However those diagnosed with cancer, instead of worrying about their retirement, they’re wondering how they’re going to pay the costs of getting better. With their savings cut in half, will they only be able to get 50% better? Of course the answer’s no. But getting better does cost money. There’s the mortgage to pay, lost income, time off work, spouse’s time off work, and medical expenses only partially covered by provincial health plans. Things that can set them back thousands of dollars.

 And if they thought using some of their RRSPs would be the answer, well now what? Not only do they have a lot less money than a few months ago, cashing some of their RRSPs in will make it even more difficult getting their retirement back on track financially.

 The solution is Critical Illness Insurance.

 FOR EXAMPLE: Nancy just turned 45 years old and works full-time. Her husband Michael also works full-time and they have two school-aged children. In the June 2008, between the two of them, they had $250,000 in their RRSPs and were well on track to the retirement they wanted. They always felt that if either of them got sick and needed money, they would simply tap into their RRSPs. By the end of November, the value of their RRSPs had decreased by more than $100,000 due to the hits the market took in 2008.

 Nancy had always been healthy, so when she was diagnosed with breast cancer, it was a surprise to everyone. The doctor recommended a program of radiation and chemotherapy.

 The good news – The doctor believes they caught it in time and Nancy will recover.

The bad news – Nancy will be out of work for six months and is faced with lost income and thousands of dollars of additional medical expenses not covered by her provincial or work health care plan. Michael will also take time off work to be with Nancy and care for the children.

 Michael and Nancy’s only option is to take $50,000 from Nancy’s RRSP, which they know will be taxable (they figure they will need about $42,000 after tax).

 The recent market downturn has reduced their projected RRSP value (based on $10,000 annual contributions and a 5% annual rate of return) when Nancy is 65 by almost 25%, but having to withdraw $50,000 has reduced it almost 15% further.

 But, luckily, that’s not Michael’s and Nancy’s only option. They listened to their Licensed Life & Health Insurance Advisor on the importance of critical illness insurance and recommended they buy a $50,000 critical illness insurance. For about the cost of a cup of coffee a day,

Michael and Nancy could have had 15% more in their RRSPs at retirement and they’d have a better chance of enjoying the retirement they had planned.

 There’s never a good time to get a critical illness. But as Michael and Nancy learned, there is a bad time. When you’re planning for your future, plan for the unexpected. Consider a critical illness insurance plan as part of your financial plan. It can provide you with the peace of mind you need to focus on what really matters … getting better. Talk to your financial advisor to incorporate it into your financial plan.

Upcoming Events

Join me this fall for this exclusive women’s only financial planning series.

P.I.N.K. embraces all the key elements of a financial plan

• Protection –  preserve your capital and protect your family from the risks
• Investment – learn how to grow your money and manage your wealth for the long term
• Need –  gain a better understanding of the unique financial challenges facing women
• Knowledge – access to insightful financial insurance and a network of expertise

Did You Know?

1. Less than 50% of all Canadian women own life insurance
2. 1 in 3 women are predicted to develop heart disease in their lifetime
3. 250,000 women were diagnosed with Cancer in 2002 (70% survived)
4. Women live 5-10 years longer, retire earlier, yet contribute 30% less to their RRSPs
5. 48% of women polled did not have a plan or regular meeting with an advisor

Seminar Dates:

• Life and Estate Planning – Tuesday, September 29, 2009, 6:30PM at Willows
• Protecting Family Assets – Tuesday, October 20, 2009, 6:30PM at Willows
• Introduction to Investing – Tuesday, November 3, 2009, 6:30PM at Willows
• Retirement Planning 101 – Tuesday, November 24, 2009, 6:30PM at Willows

RSVP: janea@performancefinancial.ca

Individual Health & Dental Benefits

Your family is greatest asset. Health related expenses that are not covered by your provincial health plan can result in substantial costs. Now you can take advantage of a range of benefits and services for you and your family.

 There is a plan to suit everyone’s health and budget. Dental services, prescription drugs, vision care and registered specialists are a few of the health expenses each of us faces without coverage.

 By selecting a health plan and any combination of additional coverage options that bests fits your life, you can provide cost effective benefits for your family. You can also add new coverage options each year you renew your plan.

 Individual coverage can be affordable and there is a plan to suit everyone. To obtain a quote or application form, call Janea Bellay at Performance Financial Services Inc. (306)281-3891 in Saskatoon or email janea@performancefinancial.ca.

 Your family is important to you. Find out how you can get additional benefits!

Janea Bellay, Insurance & Investment Advisor

Janea Bellay is an independent insurance and investment advisor, specialized in a unique 360 degree financial planning approach for individuals and families:

•     Liquidity accounts – Your spending, savings and retirement accounts
•    Family Security - Maintaining life insurance for all life’s unexpected financial needs
•    Family Protection - Maintain your current lifestyle even if there are unexpected illnesses such as cancer, heart attack or a stroke
•    Retirement Planning – Are you putting enough away and into the right investments to retire successfully?

Janea Bellay

To remove your name from our mailing list, please click here.
Questions or comments? E-mail us at janea@janeabellay.com or call 306-281-3891.

LEGAL DISCLAIMER

Janea Bellay is an independent self-employed insurance and investment representative, licensed to sell insurance and investment products and services through Performance Financial Services Inc. This is an independent MGA brokerage, and part of the United MGA Group of Canada. Mutual funds are offered though Desjardins Financial Security Investments Inc. Commissions, trailing commissions, management fees and expenses may be associated with mutual fund investment. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. The information in this article is not intended nor should it be considered as providing specific legal or tax advice. Individuals should consult with their individual advisors to ensure that any information is applicable and appropriate to their specific situation.