What a Piggy Bank Just Won’t Do

You’ve reached a point in life where your job is going well, and you find yourself not only out of debt, but with some room for savings. You might start wondering, where should I put this money that will not only be safe for the future, but also grow? That’s when you’ll probably start hearing about TFSAs (Tax Free Savings Account) and RRSPs (Registered Retirement Savings Plan).

A Tax-Free Savings Account (TFSA) is an investment account that allows you to make gains free of tax. You can open multiple TFSAs but the amount that can be contributed is limited each year. A TFSA can be used for any savings goal and withdrawals are free of tax.

An RRSP is a retirement savings plan that you establish and register with the Canadian government, to which you or your spouse or common-law partner contribute. Deductible RRSP contributions can be used to reduce your tax. Any income you earn in the RRSP is usually exempt from tax as long as the funds remain in the plan; you generally have to pay tax when you receive payments from the plan.

Now you know what they are, you might be asking, which one is better? It all depends on your situation. The chart below might help answer that question.

Reasons to save in a TFSA:

YOU ARE YOUNG AND YOUR INCOME IS LOW

If you are in a low tax bracket, you get less benefit from the tax-saving aspect of an RRSP contribution. TFSAs are a good place to put money away during your time as a student or early years of working.

YOU‘RE LOOKING FOR AN EASY WAY TO SAVE

You can put money aside in eligible investment vehicles (such as a high-interest savings account or guaranteed investment certificate) and watch those savings grow tax-free throughout your lifetime!

YOU HOPE TO GROW YOUR SAVINGS TAX-FREE

Good news for you…the initial amount deposited in a TFSA, and any interest income generated is not taxable, even when you withdraw from it.

YOU WANT TO BE ABLE TO WITHDRAW YOUR SAVINGS ANYTIME

If you have an emergency come up and need funds right away, you can use these savings without paying taxes. It can also be used for things like buying a car or renovations.

YOU’RE AMBITIOUS AND WANT TO INVEST IN BOTH A TFSA AND A RRSP

The amount you can save in a TFSA during a year, no matter how much it is, has no impact on the amount that you can contribute to an RRSP.

Reasons to save in an RRSP:

YOU WANT A STEADY STREAM OF INCOME FROM YOUR SAVINGS IN RETIREMENT

Think of an RRSP as a self-funded pension plan because that’s basically what it is intended for. It gives you the chance to save more and build a nice nest egg for your future.

YOU WANT TO REDUCE YOUR TAXABLE INCOME

An RRSP contribution give you the potential of pushing you into a lower tax bracket because any contribution to your RRSP comes directly off your taxable income, with the potential to push you into a lower tax bracket.

YOU DON’T TRUST YOURSELF WITH MONEY AND NEED TO PUT YOUR MONEY SOMEWHERE YOU CAN’T GET AT IT EASILY

It’s extremely painful to withdraw money from an RRSP. You can be charged a withholding tax that can reach as high as 30%.

YOU’RE CONSIDERING CONTINUING YOUR EDUCATION

If you or your spouse is considering going back to school, you can take out up to $20,000 to pay education costs under the Lifelong Learning Plan (LLP). You won’t pay taxes on the withdrawals but you have to pay it back within a certain amount of time.

YOU’RE CONSIDERING BUYING A HOME IN THE FUTURE

You can borrow money up to $35,000 from your RRSP to buy your first house under the Home Buyers’ Plan (HBP). The amount is non-taxable, but you have to pay the money back within 15 years or pay tax.

Published by our DLC Marketing Team

How to Talk to Your Parents about Reverse Mortgages

Talking about money is one of the last taboos and can make people feel very uncomfortable – a feeling that’s only amplified when it comes to talking about your parents’ money. However, when a conversation’s difficult, that normally means it’s worthwhile having; and getting transparency on your parents’ financial situation can help you help them make the best financial decisions for their future.

If you think a reverse mortgage would be beneficial to your parents, we’ve put together some top tips to help you broach the topic with them.

SENSITIVITY IS KEY

Your parents may feel uncomfortable talking about their finances with you, especially if they have any worries regarding their situation, so be sure to approach any financial talk with sensitivity. Listen to them, show empathy, give them the space to speak, and show your willingness to help them find the solution that works for them.

You might also want to reassure them that you have no expectations regarding inheritance and that you’d rather they live their retirement the way they’ve always wanted.

CHOOSE THE RIGHT TIME

Conversations around finances mustn’t be rushed so set a date for the conversation when you both have plenty of time. If possible, meet up face to face and give the conversation your full attention – don’t do chores as you talk.

START THE CONVERSATION RIGHT

There are several ways of broaching the topic of reverse mortgages with your parents. If you’re comfortable being direct, you could simply ask: “Mom, are your finances ok?”.

If you’d rather be more subtle, you could start the conversation in a more roundabout way. Perhaps you could ask about the house and whether there’s anything they’d like to update, or maybe you ask about their retirement and whether they’re able to do all the things they’d like to.

These conversations can lead naturally into a discussion about monthly income, assets, and savings and provide an opportunity to explore how the reverse mortgage can help them increase their cash flow and boost their standard of living – all while staying in their own home!

COME PREPARED

While you don’t need to prepare an entire script, it’s a good idea to think about what you’ll say beforehand. Do some research on the CHIP Reverse Mortgage and get a clear idea of how it would benefit your parents. Think about the questions they might have and come up with some answers.

It’s also a good idea to bring resources with you such as a CHIP Reverse Mortgage brochure or our new book Home Run: The Reverse Mortgage Advantage, which takes a deep dive into using reverse mortgages as a strategic retirement tool.

FOLLOW UP THE CONVERSATION

Don’t ask for a reaction or any kind of decision right away. Give your parents time to digest what you’ve spoken about, re-read any information you’ve given them, and think about any questions they have. Don’t expect one chat to accomplish everything, follow up in the next few days with a call.

Talking about finances is difficult at the best of times – even more so when the finances in question are your parents’. But hopefully, with the help of these tips, it’s a conversation you’ll now find easier to have.

If you’d like to find out more about how the CHIP Reverse Mortgage can help your parents live retirement their way, contact a DLC Mortgage Professional today!

Written By: Sue Pimento
Post Sponsored by HomeEquity Bank

Choosing Your Mortgage Broker

There is a little doubt that the biggest purchase of your life will be your home. When embarking on your homeownership journey, having the right support and information will make all the difference. Fortunately, a mortgage broker can help!

With access to more than 230 lending institutions including big banks, credit unions and trust companies, mortgage brokers are experts in mortgages. These connections allow them familiarity with a vast array of available mortgage products, and also ensures that the advice they offer is unbiased. Unlike banks focused on signing you for profit reasons, a mortgage broker is a third-party service who gets paid no matter which bank they sign you with. This means they can provide the best rate AND unbiased advice because they are focused on helping you achieve your dream.

It is estimated there are nearly 20,000 mortgage professionals in Canada. With so many choices, it is important to find a mortgage broker who works best FOR you.

With so much information at your fingertips on any given broker, it is easier to help narrow down the search. Especially with tools like the Dominion Lending Centres exclusive My Mortgage Toolbox app. Available on Google Play and the iStore, My Mortgage Toolbox makes it easy for potential homeowners to find a mortgage broker nearest them!

“The idea behind My Mortgage Toolbox was to make it simple for Canadians to manage the mortgage process by putting all the information they need into the palm of their hand,” noted Gary Mauris, Founder and CEO of Dominion Lending Centres.

Some features available through this application include a variety of calculators to help clients determine:

1. What they can afford
2. The minimum down payment required
3. Closing cost estimates
4. Total monthly ownership costs

Click here to download my app today!

While online tools and apps can give you pretty good insight into a potential broker, there are a few other things you might also want to consider to help make that decision a little easier.

While it is never a bad idea to go with an established professional with an abundance of clients and years of experience, you should also open to considering newer, hungrier brokers who are striving to make their mark in the mortgage space. At a busy firm, it is easy for you to feel like a small fish in a big pond, especially with a smaller portfolio, whereas a smaller brokerage can likely provide you more attention.

While brokers spend a lot of their time neck-deep in mortgages and tend to use industry jargon, a professional broker will understand if you are a first time homebuyer and will do their best to explain the terms and the process to you. Understanding is vital in your homeownership journey  so make sure to seek out a broker who is going to keep it simple for you and be honest, allowing you to understand exactly what you’re getting in your mortgage.

Ultimately, it comes down to the mortgage product but don’t be blinded by interest rates. It is important that your broker explains everything to you from term conditions to penalties, as well as why you qualified for the rate you need. It is also important to use caution if a broker is selling you on a rate and making promises to pay for fee; this is a red flag. If they say they’re going to pay for everything, they’re desperate for anything.

Of course, the rate matters, but the characteristics of your mortgage matter more and could end up costing you in the long run. You want a broker who’s going to listen to you and ask you about your needs and future goals. What are your plans five or ten years from now? Why are they so important to you as an individual? When looking at any mortgage product, consider that nearly 70 percent of mortgages are broken within three years. Even if you’re sure of today, life happens and tomorrow could be different. Therefore, you must consider the penalties for ducking out of your mortgage earlier and you should know if it is portable.

The best mortgage brokers in the business will make sure all of your bases are covered, and you’re fully aware of what you’re signing onto. The right broker will make the process easier for you, whether it’s buying your first home, shopping for a better rate, or even jumping into investment properties. No matter what stage of life you are in, we’ve got a mortgage product – and a broker – for that!

I am always happy to answer any questions you may have, discuss rates with you, and dive into helping you purchase your dream home.
Don’t hesitate to send me an email gillians@shaw.ca or call my office @ 250-716-1930!

I look forward to chatting with you!

Published by DLC Marketing Team

Roll With It.

Fitness trainer Mandy Gill makes the case for Summer Salad Rolls!

Call them spring rolls, summer rolls, salad rolls, fresh rolls—the common denominator is that we’re certain these are the only kind of rolls you’ll want this summer.

This easy-to-make recipe, bursting with flavour, can be served as a side dish at a sunny barbecue or enjoyed as a full meal on its own. The cost to make rolls at home is a fraction of what you’d pay in a restaurant or grocery store—plus you can add in whatever ingredients you’d like.

I choose to order nearly all the items below directly to my doorstep from Vitasave.ca, which has options for free shipping across Canada and a commitment to make healthy living easy and affordable for everyone. It’s also vegan, gluten-free and dairy-free.

Summer Salad Rolls

Serving: 8-10 rolls

Total Time: 30 min

• 1 package spring roll rice paper wrappers (found in the Asian section of your local grocery store; go for the option with little to no added sodium)
• 1 head romaine lettuce (finely chopped)
• 4-5 large rainbow carrots (peeled into thin ribbons)
• ¼ cup chia seeds
• ¼ cup hemp seeds
• ½ cup fresh mint (this completes the flavour)
• » ½ cup Thai basil (sub cilantro if needed)

Instructions:

1. Take a rice paper and dip it into warm water. Immediately pull it out of the water, letting it drip off for a second before placing it onto a clean surface with a bit of grip (a cutting board works well).
2. Lay carrots side by side in the center of the rice paper. This is where the colour will come from.
3. Layer lettuce, mint, Thai basil, hemp and chia seeds on top.
4. Pull up the bottom of the rice paper wrapper like you would to wrap a burrito, tucking the sides, and meeting at the top edge.
   1. *Tip: use the first roll as an experiment (and the one you eat), seeing as it likely won’t be your prettiest!
5. Cut in half with a sharp knife and serve with the Lemon Garlic Tahini sauce.

Lemon Garlic Tahini

Serving: 2/3 cup

• ½ cup tahini (from raw or roasted sesame seeds)
• ¼ cup warm water, plus more as needed
• 1 tbsp avocado oil
• 1 tbsp Flavorgod, lemon & garlic
• Squeeze of lemon, salt & pepper to taste

Instructions:

1. Add tahini, avocado oil, Flavorgod lemon & garlic, and a squeeze of lemon into a small mixing bowl. Combine together.
2. Add water a little at a time, continuing to whisk, until you have a creamy sauce. Taste and adjust seasonings as needed.
3. If you have any leftover sauce, it can be kept in the fridge for 1-2 weeks. It’s delicious on salads, falafel, veggie burgers, and much more!

Published By DLC Marketing Team