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    Financial Planning Checklist – 2016

    The new year is a time when many people take a fresh approach to organizing their personal finances. It may be that you want to change some of the ways you’ve been doing things, or simply make sure you stay current with the practices you already have in place. To help you plan for 2016, we offer this month-by-month guide to organizing and optimizing your financial affairs.

    January

    • Reflect back on 2015:
      • Review prior year’s investment portfolio and discuss with your advisor your strategy for the upcoming year.
      • If any significant changes or life events occurred; births or deaths, buying or selling of material assets, make sure to revise your Will and Power of Attorney(s) to reflect current wishes.
    • Review balance sheet for all family entities (i.e. trusts, corporations, family members).
      • Effectively redeploy cash balances to reduce debt or to obtain higher returns.
      • Minimize non tax-deductible debt and consolidate where appropriate.
      • Assess short-term liquidity needs; set aside emergency funds covering a minimum of 3 months of living expenses.
      • Pay interest on prescribed rate loan by January 30th. If you don’t have a prescribed rate loan, consider it; as rates are at their lowest levels (1% from January 1st – March 31st).
      • Revise pre-authorized corporate tax remittance.
      • Establish priorities for charitable giving. Revise pre-authorization of payments for changes in giving.

    February

    • Take advantage of tax sheltered compound growth.
      • RRSP contribution deadline for 2015 is February 29th 2016; maximum contribution limit for 2015 is $24,930.
      • TFSA contribution room is $5,500 for 2016. Top up unused contribution room accumulated since 2009 and re-contribute any withdrawals from previous years.
      • Consider spousal RRSP or RRSPs/TFSAs for kids over the age of 18.
      • Review past unused contribution room in RESPs and take action. Only one year’s contribution can be carried forward in a given year to receive government grants.
    • Collect receipts and other information for tax filings due in March (trusts) and April (personal).
    • Consider paying out a taxable/capital dividend to preserve your operating company’s qualifying small business corporation status.

    March

    • First installment due on March 15th for taxpayers remitting quarterly.
    • File trust tax and information returns by March 30th.

    April

    • File personal tax returns for all family members by April 30th.
    • Pay any outstanding tax liabilities by April 30th (April 15th for U.S. filings).
    • Revise personal tax installments for the balance of the year.
    • Review Q1 investment portfolio results.

    May

    • Review life and disability insurance needs and coverage.
    • Discuss income/family expectations for university/college children returning home to set expectations for the summer and September enrollment.
    • Review your notice of assessment and take appropriate action.

    June

    • Second quarter installment due on June 15th for taxpayers remitting quarterly.
    • File personal tax return by June 15th if self-employed.
    • Pay out any prior year accrued bonus by June 30th for companies with a calendar year end.
    • Consider sprinkling the capital gains exemption on shares in your business to other family members.

    July/August

    • Review Q2 investment portfolio results.
    • Consider mid-year reflection on personal, business, family and financial goals, philanthropic/stewardship objectives, etc. and develop action plan for implementation in Q3 and Q4.
    • Determine most effective tuition funding strategy for upcoming school year. Also, review student living accommodation and opportunities to buy vs. rent.
    • Encourage and support your children in establishing their own savings and investment plans.

    September

    • Third quarter installment due on September 15th for taxpayers remitting quarterly.
    • Review shareholder’s agreement.
    • Consider the merits of incorporating and/or an estate freeze.
    • Consider transferring property to other family members to minimize current and future tax liability. If you have a child turning 18, there are additional opportunities.

    October

    • Review Q3 investment portfolio results.
    • Review medical expenses for the past 12 months (including those of dependent parents) to determine if there are tax deduction benefits.

    November

    • Begin year-end tax planning:
      • Review status of unrealized capital gains and losses on investment portfolio and take appropriate action to minimize taxes for the current and prior years.
      • Consider a private or community foundation to shelter large capital gains.
      • Consider flow-through shares or other tax sheltering opportunities.
    • Ensure at least minimum RRIF and IPP withdrawals are made prior to year end.

    December

    • Last installment due on December 15th for taxpayers remitting quarterly.
    • Make all charitable donations, TFSA and RESP contributions by December 31st.
    • Ensure IPP contributions are made by December 31st or fiscal year end.
    • Determine bonus/dividend policy for your company.
    • Ensure amounts paid or payable from trusts to beneficiaries are properly documented.
    • Income splitting: ensure family members are paid for work done during year.
    • Any loans from the company to shareholders should be eliminated prior to year-end; otherwise shareholders will be deemed to receive a benefit equal to the value of the loan.
    • Final review of tax loss selling opportunities. Remember carryback of losses to shelter gains from prior years.

    Milestone Birthdays

    • OAS and CPP benefits typically begin at age 65. At age 60, consider receiving CPP benefits early or alternatively, delay OAS and CPP in exchange for the higher monthly amounts.
      • Benefits do not begin automatically; you must apply to receive benefits.
    • December 31st of the year you turn 71 is the last day you can contribute to your own RRSP. Prior to year end contact your plan administrator to transition your RRSP to a RRIF account.
    • If over 40, consider setting up an Individual Pension Plan (IPP) or Retirement Compensation Arrangement (RCA).

    Find your PDF copy here.

    Retirement Planning for the High-Net-Worth Investor

    Retirement White PaperIf there is one question that is common to almost all Newport Private Wealth clients it is this: “How much money do I need to retire without any worries I’ll outlive my capital?”

    Because so much of the work we do is in helping people answer that question and design a retirement lifestyle that aligns with their vision and their means, we decided to tackle the issue in this newly-released whitepaper, Retirement: How much money do you really need?

    We have drawn on the perspectives of our wealth management professionals who have been providing retirement planning advice to clients for decades and the input of affluent retirees who offered their views on what makes for a happy, secure retirement.

    If you are a high-net-worth individual near or in retirement and would like to know more, feel free to get in touch or sign up for our Retirement Crash Test.

    Manage RRIF rules carefully – or you could run out of money

    Planning for retirement can be challenging. Attempting to balance your need for current income against the risk of outliving your savings is hard enough and, as it turns out, the federal government is not making things any easier.

    Back in 1992, the federal government was running a significant deficit and needed cash. To help rectify this problem, the Income Tax Act mandated that at age 71, Canadians must convert their registered retirement savings accounts into Registered Retirement Income Funds (RRIFs). Seniors had to begin drawing a minimum amount out of their RRIF every year, which was taxed upon receipt. This measure was implemented to help the federal government manage their cash levels and remove the deficit.
    [read more >>]

    How to talk to aging parents about their financial affairs

    There comes a point when adult children should be asking certain questions of their parents to ensure that their financial affairs are in order. As parents age, achieving financial independence for retirement is a primary objective and effective planning should start well ahead of time. Similarly, planning for the smooth succession of assets on death is critical to maintaining family harmony through a difficult time. Here is a list of questions adult children should be asking their parents, now, to better plan for retirement and beyond.
    [read more >>]

    The dog days of August … A time to reassess success

    The summer is a great time to take a break from many of the day-to-day activities that take up most of our time and thoughts. It’s time to enjoy the outdoors and share it with family and friends. It’s also an opportunity for reflection when we perhaps better see the forest from the trees.

    As wealth managers at Newport Private Wealth we encourage our clients to reflect on personal, family and business goals. Some questions to ask are: Where do you see yourself in five years? What obstacles or challenges do you need to overcome to get there? What is the greatest risk to your financial prosperity?

    If retirement is part of the plan, are you on track? Is your personal balance sheet up to date? Have you recently done financial projections to test your plan (see summertime offer to crash test your retirement plan)?

    If you are a business owner, how current is your business plan? Should you re-examine your growth strategy, target an acquisition or plan for succession? Do you even know what your business is worth should a suitor come knocking?

    For me, summer is the best time of year to share quality family time. It’s a great opportunity to reinforce family values, strengthen ties and build on shared experiences that are, frankly, priceless.

    For most of the year we get caught up in the details of managing our lives. At Newport Private Wealth, we structure and manage investment portfolios, plan to minimize taxes, prepare effective estate plans and generally help our clients manage their financial affairs. Our job is to plan and implement strategies to help our clients achieve their objectives. Defining those objectives is critical to the success of any plan and should be considered thoughtfully at a time when the mind is less cluttered.

    During these dog days of August, take some time to consider some of the more important questions towards achieving success in your personal, family and business life.

    Special summertime offer

    This summer we’re extending a special offer to high net worth individuals who want to get greater clarity on their retirement plans.  We call it our Retirement Crash Test.

    We do a lot of retirement planning for clients in our wealth management practice and we know it’s something people worry about. And many aren’t prepared for:  According to a research report released this past April by McKinsey & Co., 41% of high income Canadians between 55 – 64 years of age will be challenged to maintain their income during retirement.  Either because they haven’t saved enough or investment returns have been sub-par on the savings they have accumulated.

    We’ve developed proprietary financial modeling that will simulate your retirement under a variety of scenarios using inputs you provide. Our clients have found it gives them tremendous peace of mind.  We thought to extend the offer to other high net worth individuals who are at the same life stage i.e. less than a decade from retirement.  It’s a great opportunity to take charge of your financial future and ‘kick the tires’ on our capabilities at the same time.

    Visit Retirement Crash Test to get started.

    Increased wealth after age 70? Don’t bet on it.

    A recent article in the Financial Post concludes that spending by those who are retired declines with age and correspondingly wealth increases for those over 70 years of age. Our experience is quite the opposite among the higher net worth clients we have helped through retirement. In fact, I continually caution my clients to count on higher expenses in the future for the following reasons: [read more >>]