Planning for the Family
An important part of planning for your financial future is protecting it. All families should have plans in place for:
Emergency funding: for a single income family...enough to cover 6 months of expenses and for the dual income family enough to cover 3 months of expenses should be put away. A Tax Free Savings Account is your best investment vehicle for this part of your plan.
First Steps to Estate Planning: wills and living wills, powers of attorney, and health directives are crucial for you and your family as it is growing. These legal documents protect you and your family by making the hard decisions in advance. Now is also the time to protect your family financially ...... with various types of life and critical illness insurance available at low prices while you are young, you can protect your family if an unimaginable premature death occurs.
Insurance comes in many forms: Universal Life, Whole Life and Term (or temporary) Insurance, Mortgage Insurance to cover your mortgage, or Critical Illness Insurance that covers you in case of a Critical Illness occurring.
Do it early: Permanent insurance (Universal Life & Whole Life) is always more expensive than term insurance. Buy at least some permanent insurance while you are young, even if it's only $100,000 in coverage. Life insurance gets more expensive as you age and by the time you reach 85 no type of life insurance is available to purchase .... if it was, you couldn't afford it.
Let's look at an example: A 20 year old female non-smoker $100,000 level coverage is $43.10 per month. Age 25 = $48.46 , Age 30 = $56.40, Age 35 = $66.59, Age 40 = $77.13, Age 45 = $96.48, Age 50 = $117.12, Age 55 = $145.28, Age 60 = $192.79, Age 65 = $256.45, Age 70 = $347.14, 75 = $485.60, 80 = $701.88.
Disability Insurance: No-one person plans on becoming disabled, but unfortunately it does happen to many Canadians every day. Whether due to a car accident, a work incident, stroke or heart attack it can happen at any age, any time. Your greatest asset is your long term earning power and if that stops it can devastate your family's finances. Are you covered by your employer for disability and if so, is it enough? What is your coverage's limitations? What happens if you leave that employer and your new employer does not offer group benefits?
Education Savings/Registered Education Savings Plans: Education costs are skyrocketing, and most who go onto post-secondary education carry student loans for the first decade of their working lives. The government of Canada and our provincial governments offer saving incentives for families. Start early, even if it is only a small amount each month. With your contributions and the government incentives, you can help your children reduce this future debt load. And if your kids don't go on to post-secondary education? You can transfer your contributions over to your own retirement savings plan.
Retirement Savings: Like the Education Savings Plan, you need to start contributing early, even a small amount each month. Compounding growth of your savings will help build that nest egg you will need in your retirement.
Here's a thought!!
You have worked hard for 40 years and even though your earnings have increased over those years, there was "no" money left at the end of the month for savings. Now you are 65 and in great health. It occurs to you that you could possibly live another 20-30 years with an income that is 25% of what you used to make. Is that how you want your retirement to play out?
When you plan & make decisions early,
you create many more opportunities for yourself in the future.
Protection Today While Planning for Tomorrow!