Life insurance is a serious subject. But if you’re thinking about it and aren’t sure what you need to know, answering some key questions can help prepare you to speak with your advisor about planning what’s right for you and your family. This worksheet can help you get organized by focusing on some key questions.
At various times this year, the coronavirus pandemic caused exercise venues to shut down for extended periods – from baseball fields to swimming pools, yoga studios and fitness centres. However, that situation effectively gave new breath to the home workout as a viable alternative. While many would agree it doesn’t offer the same experience, there are advantages to an at-home fitness regime that can deliver the same desirable results. If you’re interested in working out at home, here are some ideas to get and keep you moving.
Give yourself some space
Where possible, designate an area where you can move freely enough to accommodate your workout activity without disrupting other members of your household. That said, consider this an opportunity to get other family members or cohabitants on board. Tell them what you’re aiming to accomplish and invite them to join you. Working out together can be more fun and add some extra inspiration.
Choose your equipment
What kind of exercise do you prefer? The choices are limitless, but any activity will likely require some equipment. Simple stretching, yoga or Pilates doesn’t require much more than a mat, but be prepared to fork over some cash if you want to add a stationary bike, a treadmill or a collection of free weights or other apparatus. Local classified ads are a great place to shop for used equipment if you’re unsure your preference for a particular type of exercise will endure.
Training’s gone high-tech
The routines based on lifting soup cans and running up and down the basement steps have been sidelined in favour of a technology-assisted approach to getting fit. Consider these digital options:
- A wide assortment of virtual reality programs and games are designed with a specific focus on fitness. Try your hand at virtual fencing or boxing or download dance workouts that immerse you in a simulated environment that responds to your physical movements.
- Online and interactive spinning (bike) and treadmill classes and web-based workout videos geared to any fitness level are available any time with a click or two.
- Smartphones and tablets are convenient for finding a variety of workout apps that suit your style and needs. Some can even track each detail of your daily activity and nutritional behaviour and chart your progress over time.
Set your goals
This is the easy part. Envision achieving even the smallest of goals. If you want to lose weight, be more active, strengthen and tone muscle, build stamina, or simply feel healthier, exercise in just about any form will eventually deliver the results you want. But knowing what you’re aiming for is key to success.
Alternate and stay the course
Being satisfied with your fitness effort largely depends on recognizing that it takes time. Every workout is another step towards achieving your goals. To stay motivated, try stepping out of your comfort zone to keep things fresh – you might even discover a passion for something new. Don’t be afraid to alternate between high- and low-intensity workouts to check all the boxes that contribute to good health.
Track your progress
Wearable technology, such as smart watches and fitness trackers, can display your heart rate, count your daily walking strides and even monitor your sleep patterns to help you evaluate how to maximize your rest. Some apps specialize in specific activities, such as tracking running, walking and cycling distances, while others ask you to fill in the details associated with each individual workout. Do some research online and talk to friends or trainers for their suggestions. Give some thought to apps that connect you with other users so you can exchange tips and message one another to stay motivated.
It isn’t always easy to see results, but they’ll be much more noticeable if you take the time to monitor and log your progress.
Mind your mental wellness
Your mind is involved in everything you do, including exercising, eating right and managing stress, so strengthening your mental fitness is just as important as being physically fit. If you’re not happy or motivated about exercising, it will be harder to achieve your goals. Not every workout session has to involve working up a sweat and racing for the finish line. Spending time being creative, gardening, birdwatching, hiking, meditating or listening to music can do a lot to lift your spirits and improve your mood. There’s just as much satisfaction to be gained in attaining a healthy state of mind as there is in being physically content.
A final tip: Finding the will to work out regularly at home can take real determination, but in a way, it’s a lot like striving to achieve your financial goals; after you get started, it gets easier to keep going. Remember to go at your own pace – and don’t forget to celebrate every new level of achievement.
Small businesses have long been the backbone of the Canadian economy. They create jobs, encourage innovation, generate investment and drive economic expansion and growth. They’ve also faced significant challenges throughout the course of the COVID-19 pandemic.
Whether you run a bricks-and-mortar or an internet-based small business, one of the keys to success is the ability to adapt to changing circumstances. Change can be especially tricky for small businesses that have fewer resources or alternative plans in place to respond to new situations, let alone a global crisis. However, sometimes hitting bumps in the road is the most effective way of learning that something needs to change.
When the Canadian economy was sideswiped by the pandemic, it demonstrated how quickly a single event can jeopardize the normal course of business. In the retail sector alone, for example, Statistics Canada reported that retail sales fell 17.9 per cent across the country from February to May 2020, while retail e-commerce sales nearly doubled, increasing 99.3 per cent.
Though much of the online shopping surge was driven by the initial lockdowns in response to the pandemic, the statistics show that significant consumer activity moved online in a short period. This change in behaviour signaled that more people are becoming comfortable with digital processes and may well continue to shop in this way.
Planning for a digital future
Many business owners see that strengthening their digital capabilities could help meet future demand, especially if confronted with unexpected events. If you’re thinking about a move in that direction, these five considerations could help you plan.
1. Assess your situation
Take stock of what your business looks like today and where you would like to see it go. Will you have the budget to achieve what you envision? Will your staff, partners, suppliers and customers support your goals? In which areas are you likely to meet the most resistance or have the least experience? Developing a plan with as much detail as possible can help draw the straightest line to achieving your goals. Bolster the plan with a detailed budget and action items that you can tackle within sensible timelines.
2. Determine your digital needs
Enhancing your digital capabilities can boost sales, support closer connections with industry, customers and communities, and lead to new product discoveries and potential opportunities, but this doesn’t mean that you need to have all the digital bells and whistles right away in order to be successful.
Prioritize your immediate and future needs through developing a comprehensive plan that considers a variety of digital tools. Working with an experienced digital services provider can also pinpoint which tools can help you achieve your goals and save you valuable time in the process.
3. Plan on being flexible
Everyone is looking forward to moving past the pandemic and getting life back to normal. But after everything that’s happened, what can we expect the economy and the business world to look like at that point? Will going back to business as usual still be enough to compete? Or, is this a time to transform your business for the future?
Key considerations such as online trends, customer demographics, supply chains, shipping and transportation, and the overall health of the economy are factors in where you see your business fitting in. Being flexible and planning for more than one scenario can help you stay positive during a period of constant change and could unveil some new and interesting opportunities.
4. Measure the risk of digital growth
Online shopping had grown continuously for years before the pandemic kicked it into overdrive, but that doesn’t mean every business needs to become an online entity. Bricks-and-mortar businesses might simply consider a hybrid model that includes the convenience of online service while retaining the benefits of a location-based business. Physical stores are likely to see a resurgence when the public health situation improves and more people venture into businesses to reconnect with in-person service. Again, thinking about long-term scenarios may sway your plans.
5. Transitions can affect workplace culture
Everyone has changed their personal and work-related routines to some degree over the past year. Working from home and communicating online have become standard practice for many – and an eventual return to business locations is likely to come with a refashioned form of workplace culture. As businesses seek to re-establish familiar routines and expectations, employees will need to commit to readjusting their own.
A digital transition can also offer a unique opportunity to reassess and revise company mission statements, values, goals and processes to reflect the changes you plan to make to your business. Finding ways to recognize the value of your employees throughout the transformation could make it more enjoyable and achievable.
You don’t have to do it alone
Living through the pandemic has shown us how critical – and comforting – it is to rely on the expertise of others, in all facets of life. If you’re thinking of changing your business to any degree, be sure to speak to your advisor about your plans. They may be aware of budget, financing and insurance options that you may not have considered. There is value in having a trusted resource at your side, one who could give you some added insight on your future plans and possibly connect you with experts who can walk you through the next steps and focus on the areas that most need your attention.
Digital tools that can boost your business
If the future of your small business will involve a deeper commitment to using online technology, consider this list of digital support tools that could help steer it in a new direction.
- Digital marketing: data-based targeted internet advertising to promote your business online.
- Social Media: participating on influential social platforms to generate interest in your business. Every post should link people back to your website or customer contact interface.
- Search Engine Optimization: to enhance visibility across popular search engines, such as Google.
- Digital payments and e-commerce software to provide customers a safe and secure way to perform business transactions.
- Cybersecurity and the protection of critical business and client information.
- Analytics: access to behavioural user data that relates valuable customer insights.
- Employee communications and the secure, seamless transference of information (from email and messaging) to the ability to work remotely.
- Direct messaging, including automated email distribution and alert functions to connect regularly with customers, suppliers and partners with tailored, timely information.
With grocery bills and house prices continuing their upward trajectory, budgets are tighter than ever. Most Canadian families might welcome any opportunity to keep a bit more of their hard-earned money in their bank accounts. A good place to look for cost savings is on the family tax bill, and one strategy in particular can lead to significant savings: the use of intra-family loans to split income.
The basics on income splitting
Income splitting involves transferring income from a high-income earner to a family member in a lower tax bracket. Because the lower-income individual is taxed at a lower marginal tax rate, the family pays less tax overall. However, the Canada Revenue Agency (CRA) restricts most forms of income splitting through the Income Tax Act’s attribution rules. A person can’t simply give their spouse $100,000 to invest and have the spouse declare the investment income in their tax return at their lower marginal tax rate. In such a situation, the investment income would be attributed back to the original individual and taxed at their higher marginal rate.
There are, however, a few legitimate and effective ways to split taxable income with a spouse or other family members. One of the most effective strategies in a low interest rate environment is through a loan directly to a family member or, where minors are involved, to a family trust. Provided the loan is properly structured, the recipient can invest the proceeds from the loan, with the income taxed at a lower marginal rate. Of course, one of the keys to a successful income-splitting strategy is to make sure that investment returns are higher than the interest rate charged on the loan.
Interest rates and deadlines
Intra-family investment loans most commonly involve a loan between spouses, either married or common-law. But this strategy can also be effective for funding the expenses of minor children, such as private school or extracurricular activities, through a prescribed-rate loan to a family trust with the minor children as beneficiaries. It’s a good idea to have a formal written loan agreement in place. For this strategy to work, the following criteria must be met:
- Interest must be paid on the loan at a rate that’s at least equal to the CRA’s prescribed rate (updated quarterly). If the commercial loan rate is lower than the prescribed rate at the time the loan is made, this lower commercial rate can be used. You can find the CRA’s current prescribed rates here.
- In order to be compliant with the CRA’s attribution rules, annual interest payments must be made to the lender no later than January 30 of the following year. Failure to do so may result in the income earned on the borrowed funds being attributed back to the high-income earner. And as a result, the income splitting strategy will no longer work.
Already have a prescribed-rate loan?
Locking in current low interest rates may seem very attractive. But what if you and your spouse already implemented this strategy in the past when the prescribed rate was higher? You can still take advantage of the current lower rate to increase your tax savings opportunities. First, your spouse will need to repay the existing loan – it’s not enough to just re-sign the loan agreement. To repay the existing loan, investments may have to be sold, which may result in capital gains. However, any gains would be taxed to your spouse and, therefore, the tax would be less than if you held the investment yourself. You can then arrange a new loan at the current lower rate and new investments can be purchased.
Making it work – an example
Spouses John and Jill are in different tax brackets – John at 48 per cent and Jill at 20 per cent. John loans Jill $200,000 at a prescribed rate of one per cent. Jill invests the money and earns four per cent, or $8,000. She then pays John the $2,000 loan interest and deducts the same amount as loan interest expense. Jill pays $1,200 in tax on the remaining $6,000, and John pays $960 on his interest income.
Here’s how it stacks up:
- John would have had to pay $3,840 in taxes had he invested the $200,000 himself.
- By loaning the money to Jill for the purpose of income splitting, the family tax bill is reduced by approximately 44 per cent to $2,160, representing savings of $1,680.
Income splitting can be a great tax-saving strategy for families that have a pool of non-registered capital that they’re willing to invest, and where a spouse or other family member is in a lower marginal tax bracket. To take advantage of income splitting, speak with your advisor, who can walk you through the necessary steps.
Guaranteed interest accounts provide interest income, insurance benefits and flexibility.
There is almost always a place for secure, guaranteed investments in an investor’s portfolio. They can help reduce the volatility of a balanced mix of stocks and bonds, and they can deliver a steady stream of interest income to help support lifestyle goals.
A guaranteed interest account (GIA) offered by an insurance company has some interesting additional benefits that can help investors achieve other objectives.
What is a GIA?
A GIA is an insurance contract that pays interest at a guaranteed rate, like a bank-issued guaranteed investment certificate (GIC). A variety of terms are available ranging from short-term to long-term. Either way, at maturity, investors can choose to reinvest their original investment plus the interest they have earned.
Importantly, once purchased, the interest rate does not fluctuate with the markets. On top of that, a GIA offered by an insurance company offers extras like tax and estate planning benefits, as well as potential creditor protection.
Tax planning benefits
Every dollar saved in tax is an extra dollar available to save or invest – and a GIA can provide tax savings in two ways for non-registered accounts. First, investors can defer taxes on GIA interest for up to one year. Second, when investors are age 65 or older, GIA interest income may qualify for the pension income tax credit and for pension income splitting with a spouse or common-law partner.
Estate planning benefits
Most people want their assets to transfer quickly, cost-effectively and privately to their beneficiaries. Because a GIA is an insurance contract, it allows for the naming of a beneficiary. This means the proceeds can be paid directly to the beneficiary and avoid the estate, and therefore probate where applicable, and potential delays and associated costs, as well as public scrutiny in a probate court.
Potential creditor protection
Professionals and small business owners often worry about protecting their personal assets from creditors. If they’re sued or the business runs into financial difficulties, creditors may have the right to seize what they own personally.
GIAs have the potential to help with creditor protection during the investor’s lifetime, as well as after death when the death benefit passes directly to a named beneficiary outside the estate. It is very important to consult with a legal advisor to discuss the rules surrounding eligibility for creditor protection.
Why choose a GIA?
Many investors choose GIAs primarily to help protect part of their portfolio from market exposure and to guarantee a predictable return. Tax and estate planning benefits and potential creditor protection can be attractive extra features.
Depending on the structure of the GIA, investors may also benefit from flexibility to move in and out of the markets in response to volatility or changing financial needs. That’s because some GIAs are offered in contracts that also offer segregated funds. This means that it may be possible to transfer between the GIA and a segregated fund that provides access to market growth. This transfer would be subject to fees.
For investors looking for security and stability in an unpredictable world, GIAs can help safeguard capital and deliver guaranteed rates. Unlike some market-dependent investments, GIAs also qualify for deposit protection from Assuris on investments up to $100,000. Speak with your advisor about whether a GIA may be appropriate for your needs and goals.