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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.”

“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 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.”