The end of the year is a great time to take a quick review of your personal finances to determine if you have any action items prior to December 31.
To help this process below is a checklist that covers events, milestones, taxes, insurance, and retirement plans – areas that often need attention prior to the year’s end.
- Review sales of any appreciated property, including real estate.
- Collect cost basis information on sold securities.
- Review current years’ realized and unrealized gains and losses.
- Check loss carry forward from last year.
- Identify transactions that could improve your tax situation (i.e. year-end tax loss selling).
- Review potential deductions and credits before the year’s end.
- Review pension income splitting opportunities with your spouse.
- Review withholding taxes on Canada Pension Plan (CPP), Old Age Security (OAS) and Registered Retirement Income Fund (RRIF) payments for 2023.
- Confirm you have paid the required income tax installment to CRA.
- Max out your RRSP contributions, including catch-up contributions, especially if you are age 71.
- Analyze LIRA conversion scenarios: LIF vs LRIF vs Annuity.
- Repay the annual required amount of the Home Buyers Plan and the Lifelong Learning Plan to your RRSP.
- Open a retirement savings plan if newly self-employed.
- Take the required minimum payment from your RRIF.
- Review your overall retirement income planning strategy (do a stress test of your plan).
- Confirm goals and strategies.
- Review asset allocation.
- Review fundamentals of portfolio positions.
- Revisit income and savings needs.
- Review your life insurance policies.
- Review the costs of your current policies.
- Review health insurance coverage.
- Identify material changes in life, business, or financial circumstances that may require insurance adjustments.
- Review your employer’s health benefits package to ensure that you have filed all health claims with your insurance provider before their deadline.
- Review your spouse’s health benefits package to ensure you have filled all co-pay claims and to make sure you are not paying for redundant coverage.
- Spend any remaining amounts in flexible spending accounts.
- Confirm you have out-of-province/country health care coverage when you travel.
- 0: You can begin to contribute to an RESP; just obtain a SIN for your newborn, brother, sister, grandchild, or great-grandchild.
- 18: You can now contribute to a Tax-Free Savings Account (TFSA).
- 55: If you have a locked-in retirement account (LIRA), you may be able to start to withdraw from the plan. Also, if it is less than $25,960, you may be able to unlock the LIRA.
- 60: You can now apply for early Canada Pension Plan (CPP) benefits. (Review if it makes sense to delay CPP)
- 65: You can apply for Old Age Security (OAS) benefits.
- 71: You must convert your RRSP to a RRIF or Annuity.
- 72: You must begin to take the minimum withdrawals from your RRIF.
Changes – let your advisors know if the following applies:
- Did you move?
- Did you sell a major asset like your home, business, or real estate?
- Did you transfer any major financial assets?
- Did you refinance your home?
- Did you change jobs?
- Did you get married?
- Did you end a marriage?
- Did you add to your family through birth or adoption?
- Do you have a parent or other family member in need of assisted living?
- Is there a severe illness in your family?
- Did you receive an inheritance?
- Review contributions and withdrawals to/from TFSAs.
- Review both informal and formal trusts.
- If you have a family member who qualifies for a disability tax credit (DTC), consider opening a Registered Disability Savings Plan or top up your existing plan.
- If you have a family member in an assisted living facility, find out if they qualify for the Disability Tax Credit (DTC).
- Review and make required spousal loan interest payments on time.
- Plan charitable contributions.
- Review and contribute to education savings plans, including RESPs.
If you have any questions after the review of this checklist or are not sure if you need to act, contact your Financial Advisor ASAP, as this is what they get paid to review.
For more information, you can refer to Preserving Wealth: The Next Generation – The definitive guide to protecting, investing, and transferring wealth by Jack Lumsden, MBA, CFP®
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This material is provided for general information and is subject to change without notice. Every effort has been made to compile this material from reliable sources; however no warranty can be made as to its accuracy or completeness. Before acting on any of the above, please make sure to see me for individual financial advice based on your personal circumstances. The information provided is for illustrative purposes only. Commissions, trailing commissions, management fees and expenses may all be associated with mutual fund investments. Mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. Please read the Fund Facts and consult your Assante Advisor before investing.
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