Life changes... and so should your
financial plan
Whether you’re saving up for a new home,
putting your kids through university or investing for your
retirement, your financial plan is the road map to achieving your
goals. But according to Patricia Lovett-Reid, Senior Vice
President, TD Waterhouse, your financial plan needs to evolve as
you go through major life changes.
Lovett-Reid outlines some typical events that
should trigger a meeting with a professional to revisit your
financial plan.
Change in marital status
“A change in marital status almost always means a change
in your financial situation and objectives,” says
Lovett-Reid. “You’ll want to review how your
new status will affect taxation. Consider opportunities for income
splitting and update the beneficiary designation in your RSP or RIF
to take advantage of the tax-free rollover that’s
available to a surviving spouse or a common-law
partner.”
A new dependant
“Having a baby or adopting a child brings responsibility
along with joy,” says Lovett-Reid. “A child
means additional expenses and planning for the future. An extended
parental leave, for example, may mean a lower household income.
You’ll also want to consider life and disability
insurance and update your wills to name a guardian who will raise
your children should unforeseen circumstances arise.”
Purchase of a home
“Your home is likely the biggest purchase
you’ll ever make, and a mortgage the largest financial
commitment you’ll ever have. To protect your family and
your investment in your home, you will want sufficient life and
disability insurance to cover the amount of your mortgage if
something were to happen to you or your partner.”
Job change
“Whether you accept a promotion or decide to pursue an
independent career path, your decision has far-reaching
implications for your finances. If you receive a sizeable increase
in salary, for instance, you’ll also have a higher income
tax bill, and you’ll want to contribute the maximum to
your RSP to reduce the tax owed.”
Inheritance
“Inheriting money might seem like a boon, but it also
means more decision-making,” says Lovett-Reid.
“If the inheritance is substantial, you’ll want
to schedule a complete financial review so that you can deal with
the impact on your tax situation and estate planning
needs.” Websites such as www.tdretirement.com can be a valuable resource for
more information on financial planning throughout life’s
big events. “Whenever you experience a major change in
your situation, financial advice can help you see your options more
clearly,” concludes Lovett-Reid. “Expert
guidance can establish which steps may be necessary to keep your
family secure and to keep your financial plan on
track.”
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