How do You Financially Plan for Retirement?
Planning adequately for retirement is the best way to avoid financial problems and going broke. Being able to meet financial obligations, health care, housing, and more after retirement depends on the efforts made during the pre-retirement period to safeguard the retirement years. Irrespective of your age, you should start making plans for your retirement now even if you do not have much money.
If you are looking for ways to plan financially for retirement or how you can take advantage of critical illness insurance during your retirement, read the information below to help you prepare adequately.
Start Emergency Savings
The best way to go is to start saving now before you figure out the best retirement plans to join. The fund saved through the emergency saving will help to prepare you for the process. You can run the emergency savings for about three months pending finding the right retirement program to join. Then you can move the fund into the retirement plan. Besides, you can create new savings account for the process to cater to your expenses because there may be delays in the start date of Social Security or pensions. You can rest assured that you would not have any inconveniences meeting your financial needs.
Make a Budget
You need to take time to analyze your likely expenses after retirement and make a corresponding budget to cater to them. It is crucial that you come up with an accurate estimate of your present spending and include the likely changes after retirement. Do not underestimate any expenses to avoid problems after retirement. Make an adequate budget that will capture all your expenses and some unforeseen expenditure that can come up.
Assess Health Insurance
As part of making a financial plan for your retirement, you should determine how your medical expenses and health insurance will be covered. Note that health insurance coverage will be more expensive if you choose to retire early. Remember that Medicare starts at age 65; you should arrange to cover your medical expenses before you begin to benefit from Medicare.
Critical Illness Insurance
You should safeguard your future health by subscribing to critical illness insurance to take care of any severe health issue you may have in the future. Several insurance companies offer critical illness insurance, but you need to read the details and other terms of the policy before you append your signature. After retirement, you may find it hard to afford medical expenses for debilitating illnesses; that is why you should consider signing up for critical illness insurance.
How Can I Save the Most Money?
Looking for the best way to save the most money? Are you searching for the best insurance policy that reduces your expenses and supports you? Critical illness insurance is the perfect policy for you.
As we grow older, the chances are that certain illnesses begin to show up. Without prompt treatment, such critical illnesses will be not only debilitating but also life-threatening. Treatment of such sicknesses is usually expensive for an individual, which is why getting an insurance policy to cater to such expenses is crucial to getting care when the need arises.
Unlike under life insurance where your beneficiaries get paid when you pass on, critical illness insurance caters to your treatment when you are diagnosed with major illnesses indicated in the policy, which saves you a lot of money. While a policy that pays your loved ones (beneficiaries) when you pass on is good, the policy that ensures that you get the best treatment and live well is better.
To benefit from critical illness insurance, you don’t have to die; and you are the sole beneficiary that is why it is referred to as a living benefit. Several critical illness insurance policies are on the market; however, you have to choose one that caters to conditions you are likely to develop later. Some of the conditions usually covered include but not limited to cancer, stroke, heart attack, Alzheimer’s disease, major organ failure, coma, loss of speech, coronary artery bypass surgery, kidney failure, paralysis, loss of limbs, major organ transplant, Parkinson’s disease, and much more.
So, how can you save the most money on a critical illness insurance policy? Read below
Choose a Suitable Policy
Do not choose a policy because your friends choose them. Your choice should be based on your health conditions considering your family health history. If the risk factor in your family is cancer, stroke, or heart failure, choose a critical illness insurance policy that covers this. Remember, the policy gets more expensive relative to the number of conditions covered. As a result, choose a policy that covers the high-risk factor for you to save the most money.
Benefit from Age Rounding
Insurers will round up or down your age based on when you apply for the policy. If your birthday is around November or December, buy critical illness insurance policy between January and June to benefit from age rounding. For instance, if you are 52 years 8 months old, you will be considered to be 53 years old while you will be considered for the same age when you buy a policy when you are 53 years 4 months old. The higher your age, the higher your policy is likely to be.
Ignore Riders and Extra Benefits
Some policies are bundled with additional benefits and riders such as a child illness rider, do not apply for it to save money on your policy.
Pay Annually
Paying an annual lump sum earns you lower premiums, unlike when your payments are processed monthly; it costs more for you and your insurer.
Get Rid of Bad Habits
If you are a smoker, you should consider giving it up because smokers usually pay almost double of what non-smokers are billed. As a result, if you have any habit that can interfere with your health and trigger your risk factor, it is better to quit to save the most money on your critical illness insurance policy.
How Can Students Save Money Wisely?
Being a student is really hard, especially if you are in a new country, all by yourself. The most difficult burden is that you have to survive while not getting broke and falling your exams. Balancing work and study is a hassle on its own, so instead of working a part-time job, consider using these tips for saving some cash at the end of this month:
Define a Goal
The key to succeeding at a task, whether it is staying fit or saving up some money, is to define a goal. Ask yourself questions like: Why do I want to save money? How will more money help me in achieving my goal? Besides answering the questions, take a journal and start to write down small goals leading to the main one. For example, I want to save up $300 this month, $400 the next, etc, so I can save up $5000 and buy video making equipment. Goal defining helps you in understanding your values. Is dining at an expensive restaurant more important than your goal? If yes, you might have to change it!
Ask Around
One of the main benefits students have is discounts! Ask around your peers and find out which places (restaurants, museums, movie theaters…) offer certain discounts for students. Some may even have signs in front of the store. Transportation discounts are amazing for students. Usually, the city you are studying in has lower prices for bus and train tickets. If this isn’t the case for yours, consider biking or walking to your destinations, instead of taking public transport or using the car. So keep your eyes and ears open and save up some money this month.
Note: If you have a student loan, consult with financial advisor to find solutions on repaying it more quickly and efficiently.
Share Rent
The biggest money eater students face is rent. As days pass, the prices are getting higher. Today, rent money is ridiculous. If you want to pay a reasonable price, you will have to live in a dump or an apartment filled with cracks and mold. To make it easier for your pockets, decide to share that rent with a friend or colleague. If you are new to the city and don’t know anyone, consult with your university or find a roommate online. Remember to analyze him/her thoroughly since you don’t want to be stuck for months in an enclosed space with someone you don’t get along with.
Compare Prices
Remember to calculate too: If I drink 2 cups of coffee a day and spend $7, this means that monthly I spend $210 on coffee. So what should you do? You can make coffee at home, of course, purchase an espresso machine or you can change the coffee shop. The most important thing about saving money is by comparing prices. You can even make a notebook consisting of prices for each product you buy on a daily basis like bread, noodles, tomato sauce, etc. Check which stores have better offerings for the same product. If you spend a dollar less just on bread, remember, that is $30 a month!
Tips for Choosing Health Insurance
If you practice yoga and drink green tea on a daily basis and plus have no history of severe medical conditions, you might not need critical illness insurance. But also keep in mind Canada’s health system does not cover dental care and with those pollution levels rising and food being sprinkled with health hazardous chemicals, who knows?
Surely at least your teeth will become rotten and in need proper medical treatment. The point being made is: no one knows anything and this is exactly why you should at least consider purchasing a health insurance plan. And If you are already in the process of choosing, here are a couple of useful tips:
1. Take Out The Calculator
Health insurance plans consist of 3 important things: deductible, co-pay and out-of-pocket. This is why you shouldn’t only take in mind the monthly fee, but also all of these factors in an insurance plan. The deductible is the amount you have to pay for medical care before the insurance activates. Co-pay or co-insurance is the percentage which you’ll pay for the necessary medical treatment gotten after the deductible.
Insurance plans don’t cover these two, but they do cover everything else which is extremely more than the deductible and co-pay combined together. These costs covered solely by the insurance plan are called out-of-pocket and cover a minimum of 2 million dollars on an annual basis. So purchasing insurance for a lower monthly price won’t do you any good if the deductible and co-pays are high.
2. Be Realistic About Your Health
The best health plan for you depends on your lifestyle, medical history, family tree and the type of work you do. If you are stuck on the decision for a health insurance plan, simply look at your family tree.
Each insurance plan offers coverage for different health conditions. It’s a difficult subject to talk about, but identifying your unhealthy habits, the threats (physical & mental) which you are faced with at work and the medical conditions in your gene pool or family tree will help you in finding the best health plan. It is better to clear things up now, rather than choosing a health plan that won’t prove to be beneficial for your health in the future.
There are 4 main types of health insurance in Canada: critical illness insurance, health & dental, long term care and disability insurance.
3. Ask Millions of Questions
Choosing the right insurance plan is important. If you make the wrong decision, bad health insurance can leave you scammed and without enough money for health coverage. This is why, when choosing a health insurance provider one must dive deep into their offers. When inspecting the insurance plan keep in mind these couple of things:
- Which prescription drugs are covered
- Which medical treatments are covered
- Other benefits such as lab tests, hospitalization, emergency situations, rehabilitation, dental and vision care, maternity and newborn care etc.
- Do you have to stay in the network of medical providers to get your treatments covered?
Contacting the companies through email and phone might not be enough as person-in-person communication always reveals much more about the reality of a company’s professionalism and dedication. When you visit them, ask every important question you can think of. If the company is legit then each of your concerns will be understood by the insurance experts and solved with adequate suggestions and advice.
How to Repay Your Student Loans
According to recent statistics by the Canadian Student Loan Program, the average time of student loan repayment is 10 years. Education is one of the most important part of our lives and getting a student loan is an investment that is beneficial for our future. Sometimes the repayment of our loans can be tough and you require services of a financial advisor to guide you, especially if we are freshly graduated and new to the world of adults and bank accounts.
Here are 3 tips that will help you get through the repayment of your student loans:
1. Consult
You can start paying off the loan after finishing the studies or if you have decided to take a year or semester off studying. Every student loan is different and before you start repaying yours, find out about your situation and the best solutions for it, consult with your loan advisor and ask him about these important details:
How much are the interest rates and the monthly payments? In how many years should my loan be repaid? Can I prolong the repayment? Can I lower my interest rate? How will the money be transferred? Can it be withdrawn from my credit card? Can I make my repayments weekly instead of monthly? How can I lower the amount I have to pay off? What will happen if I’m late with a payment?
Do not be afraid of asking too many questions. It’s a matter of finance and stability. Consult with loan advisors to get the ideal solutions for your repayment problems. Also know that people can get repayment assistance plans in specific situations as getting extremely injured or if working as a nurse, doctor, medical assistant in rural communities.
2. Organize
After you find out your monthly amount, get a notebook and start calculating. Make a list of all possible monthly spending and compare it with all possible sources of income. Get a job that will satisfy your financial needs. Do not settle for less and always keep in mind your true worth. At the beginning it may be difficult to find a job in the field you were expecting or studying; so be prepared to work in other areas until you get on your feet. For some people it is necessary working 2 jobs or night shifts.
Figure out what type of payment is most suitable for your needs. Will your monthly repayments be automatically withdrawn or will you send checks to the bank? Each of us has different schedules and tempos, for instance some people prefer weekly repayments instead of monthly.
A good tip is opening up a separate savings account where you can stash the money planned to be spent on debts, insurance, rent, loans and other obligatory spending. This helps you saving up that money and prevents the wild, spontaneous and reckless spending.
3. Prioritize
Be prepared to give up luxurious ways of life. Do not drink a Large Pumpkin Spiced Latte at the coffee shop and do not live alone. Rent is becoming more expensive and unaffordable, especially for people who’ve just finished university. Finding a roommate is a great and fun way to save money whether your roommate is your coworker, friend, parent or other relative. When picking your roommate, make sure it is a sane and reasonable person. You do not want to ruin your mental health for some extra savings.
It may be tough at first but until you get a steady job, you can also try freelancing which offers flexible working hours and a various market for trading crafts. Also, if you have studied a subject whose basis are taught in high school like biology, math, languages or others then put up some adds on the internet and offer lessons to high school or college students. Besides working, another way to earn money is by selling old items as clothing, books, technology devices or furniture. This will liberate your living space and make room for new beginnings.
Why Do People Buy Critical Illness Insurance?
No one wants to think about having a serious illness or finding their car crashed by a meteor; but the fact is that times are getting tougher. Air pollution is getting worse and medical treatments costs increase each day.
So insuring your home, car, health etc. isn’t such a bad idea; especially if you consider the low monthly payments you make which provide you with large sums of cash in emergency situations.
Here are some of the reasons why people buy critical illness insurance:
What Happens to Their Money
If time passes and God forbid you catch a serious illness then the company will insure you get your money. And you can get the whole amount, no questions asked. You don’t have to do daily reports and calculations. The moment the disease has been diagnosed, you can get your investment’s worth.
On the other hand, if time passes and you do not catch a serious illness then you may have the chance for money return. The conditions are different for each company but generally you can cancel the insurance policy and get a percentage of the amount you invested.
Both of the situations have a common advantage. You do not get taxed. To achieve this you must not have a group plan with your employer. Then you might get taxed because the premium payments were made before the pre-tax deduction from your paycheck.
The Extra Benefits
With buying critical illness insurance you are letting go of some portion of the fear on this subject. You know that you have an additional cover up and plan for those kinds of unwanted situations. With other words you paid someone to watch your back.
Critical illness insurance isn’t something that can be approved for anyone. You have to be healthy at the time you buy it and have a pretty healthy family history. There are many types of policies you can buy, each covering different things including a number of the 22 common health conditions. You get to choose which diseases you want covered and how much money are you planning to invest each month. This will determine the amount of money that will be provided to you in a case of emergency.
TFSA Limit for 2019 Rises to $6,000
Just as expected, the TFSA contribution limit for 2019 is $6,000, up from $5,5000 in 2018. In addition to the TFSA contribution limit rising to $6,0000 for 2019, the cumulative TFSA contribution limit will be $63,500 for Canadians who has never contributed to a TFSA and who was 18 years old or order in 2009.
Under changes announced by the Canadian government in a Department of Finance news release on December 7, 2015, 2016, and each subsequent year, the annual TFSA limit is fixed at 5,000, indexed to inflation for each year after 2009, and rounded to the nearest $500, using the consumer price index provided by Statistics Canada.The TFSA contribution limit for 2013, 2014, 2016, 2017, 2018 was $5,500. The limit for 2015 was $10,000 and the limit for 2009, 2010, 2011, 2012 was $5,000.
If you have withdraw from TFSAs, your crystalized gains and losses from withdrawals are factored in to your TFSA room. Here’s the formula:
Unused TFSA contribution room to date + Total withdrawal made in this year + next year’s TFSA dollar limit = TFSA contribution room at the beginning of next year.
Sources
https://www.canada.ca/en/revenue-agency/services/tax/individuals/frequently-asked-questions-individuals/adjustment-personal-income-tax-benefit-amounts.html
https://www.advisor.ca/tax/tax-news/tfsa-limit-for-2019-released/
https://www.investmentexecutive.com/news/industry-news/tfsa-annual-contribution-limit-rises-to-6000/
Basic Insurance Policies Everyone Should Have
There are various options when it comes to buying insurance. You can find an insurance policy to cover almost anything imaginable.
How do you know which insurance policy is necessary for you? You work hard to build wealth in order to live a comfortable life, so you’d want to protect your most important assets. You also don’t want to pay too much money for insurance because it’ll take money away from your emergency fund or retirement savings.
Here are the 5 basic insurance policies everyone should have:
1. Health Insurance
One of the most important types of insurance to have is health insurance. Health insurance is a type of insurance coverage that pays for medical and surgical expenses. This means that you’ll be taken care of incase of an unexpected injury, illness, or even disability. Having health insurance will replace lost income and provide guaranteed coverage for hospital expenses during this time.
There are 2 different types of health insurance: critical illness insurance and disability insurance. Critical illness insurance will provide you with a tax-free lump sum payment when you become seriously ill. Disability insurance will help you to replace a portion of your income if you become disabled and have no way of earning an income due to a disability.
2. Car Insurance
Car insurance is mandatory in Canada. If you’re caught driving without car insurance, you’ll face heavy fines, your license will be suspended, and your vehicle will be impounded.
There are 3 different types of auto insurance coverage in Canada: collision insurance, liability coverage, and comprehensive coverage. Collision insurance pays for the vehicle repairs and medical costs whether you’re at fault or not. Liability coverage covers any damages to property or another person due to an automobile accident. Comprehensive coverage provides you coverage for events that are out of your control such as falling objects, natural disasters, and theft and vandalism.
3. Homeowner’s Insurance
Your home is your largest financial investment, therefore it’s important to protect your home against risks. Homeowner’s insurance protects: your home, your belongings, living expenses, and liability claims. Homeowner’s insurance will help to protect your home against risks like fire, theft, and more. Homeowner’s insurance will protect your belongings against insured loss or damage to clothing, furniture, and other personal property. Homeowner’s insurance will protect your living expenses like a hotel room and storage costs if you’re not able to live in your home while repairs are made after an insured loss or damage. Homeowner’s insurance protect your liability claims if you accidentally cause property damage or bodily injury to others.
4. Life Insurance
Life insurance protects the financial security of the people you live by giving them a tax-free payment upon your death. The cost of life insurance will depend on your age, gender, health, lifestyle, and medical history.
There are 2 different types of life insurance: term life insurance and whole life insurance. Term life insurance is flexible, inexpensive, and allows for temporary coverage. You’ll be insured for a certain amount of time which is going to be fully guaranteed during the entire term. Whole life insurance is a permanent type of life insurance. Your coverage is in place for life and as long as your premiums are paid, your beneficiary will receive the benefit amount upon your death.
5. Disability Insurance
Disabilities can be short term or long term which include major illness, personal injury, and mental health problem. Disability insurance protects you and your family from an unexpected illness or accident that leaves you unable to work and earn an income.
What is Critical Illness Insurance?
What is critical illness insurance? Critical illness insurance is a form of health insurance that provides you with a tax-free lump sum payment to use however you need should you become seriously ill.
This type of health insurance is suitable for anyone seeking financial protection to help cover the costs associated with recovering from a life altering illness or for those looking to protect loved once in the event they experience a life altering illness.
The cost of this insurance varies depending on your age, so the younger and healthier you are, the lower the premium is going to be. However, there are also several other factors such as medical condition, the insurance company, the amount of coverage, and the number of illnesses covered by the policy.
What are the types of illnesses covered by Critical Illness Insurance?
The types of illnesses covered by critical illness insurance differ from company to company. However, typical illnesses covered by critical illness insurance may include:
- Cancer
- Stroke
- Heart attack
- Multiple sclerosis
- Blindness
- Alzheimer’s
- Paralysis
- Kidney failure
You’ll be able to make a critical illness insurance claim if a physician, licensed to practice medicine in Canada and specializing in your particular illness, has diagnosed you with a critical illness covered by your insurance policy.
If the claim is approved, a lump sump benefit payment will be made to you after 30 days. If you don’t make a claim, for example if you die for a reason that isn’t covered by your insurance policy, the premiums you paid may be refunded to your beneficiary.
How does Critical Illness Insurance benefit you and your family?
The physical and emotional strain of a critical illness, as well as the financial impact can be devastating. You may face additional costs in the event you experience a life altering illness such as childcare, medication, home modifications, or treatments out of pocket.
Critical illness insurance can help offset some of the costs that isn’t covered by the Ontario Health Insurance Plan (OHIP). Critical illness insurance can also offer financial relief that can help you keep your retirement plans on track, so you don’t have to worry about the additional costs eating into your retirement savings. You can use the tax-free lump sum payment however you need such as supplementing lost income and covering private nursing costs.
5 Ways to Know You Found the Perfect Home
There is no other decision in life that is more nerve-racking than choosing which house to buy. For many homeowners, buying a home or getting a mortgage is as major financial decision. We fear about making the wrong decision when looking at homes to buy. This is because many of us wants to ensure we’re making the right choice before jumping in. So how can you tell if you’ve found the perfect home?
Here are the 5 ways to know you found the perfect home:
1. You want to go inside the house
You know you found the perfect home if you want to go inside the house. One of the exciting things about looking at home is not knowing which could be your new home. Maybe it’s the one of the right or maybe it’s the one of the left. If you like the house on the right, more than the house of the left, it could be a sign. This sign could mean there’s something about the house that appeals to you.
2. You are possessive about the house
You know you found the perfect home when you are possessive about the house. For example, your real estate agent points out a flaw about the house. Do you feel defensive about your real estate agent saying something so mean about the house? Maybe you see the flaws, but right now it doesn’t matter. If you think you found the perfect home, you’ll want to defend every flaw you see.
3. The house fits your basic needs
You know you found the perfect home if the house fits your basic needs. Maybe the house doesn’t give you everything you’re looking for. However, the house fits your basic needs since it has the number of rooms and space you’re looking for.
4. You want to stop looking at other homes
You know you found the perfect home if you want to stop looking at other homes. This means every house you’ve been to doesn’t appeal to you anymore. Maybe you had a home previously rated at #5, but now you’ve had a change of heart and has a #1 rating in your eyes.
5. Every thought in your mind tells you to buy that house
You know you found the perfect home when every thought in your mind tells you to buy that house. You’re so in love with this house, you can’t stop thinking about it. Your mind is so consumed that every other thought in your heads saying that this is the perfect house for you and your family.