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Unlocking the Hidden Value of Group Benefits: Why You Shouldn’t Rely Solely on Your Spouse’s Coverage

By: Brian P. Adams CLU. CH.F.C

Many employees opt-out of their health and dental benefits because they are listed on their spouse’s benefits plan. After all, why bother with additional group benefits if you’re already covered, right? Wrong. Beneath this assumption lies an oversight that could leave you vulnerable in times of need.

While your partner’s plan may offer a safety net for routine health and dental expenses, it does leave you open for potential financial risks. Here’s why:

  • Firstly; relying solely on your spouse’s benefits means neglecting critical protections like Long Term Disability (LTD). Your partner’s employer can’t extend LTD coverage to you, as it’s contingent upon direct employment—a fundamental requirement you don’t fulfill.
  • Secondly; the life insurance component of your spouse’s plan might offer a modest cushion, typically ranging from $5,000 to $10,000. While this might suffice for some, it pales in comparison to the comprehensive coverage you could secure through your own group benefits.
  • Thirdly; if, for any reason, your spouse loses their coverage, you are going to have a problem. Most plans allow for all members to come onto the plan no questions asked at the time it is set up or when they are first hired. Attempting to secure coverage through your employer’s plan later is either disallowed or exceedingly difficult to qualify for.

Why subject yourself to such uncertainty? The answer is clear: secure your financial safety net by enrolling in your own group benefits plan for life and disability coverage. By doing so, you not only safeguard yourself against unforeseen hardships but also ensure seamless access to health and dental benefits through your employer, should the need arise.

Remember, the foundation of financial security lies in proactive planning. Don’t gamble with your future. Invest in your well-being today, and rest assured that you’ve built a shield against life’s uncertainties.

Living Well. Aligning your time and your values.

By: Shawn Todd, CFP

There are lots of ways to spend your time.

In fact, I find there is just no end to how we can use it.  It can be spent reading, hiking, watching TV, time with friends, playing boardgames with your family, a sport you love, or you can literally watch time pass doing very little – if you choose to.

When I spend time with a variety of business owners, or growth minded clients – having a conversation about what is most important to them, a majority of time they will always write down that family is the most important thing to them.  Everything they have built or spend time doing during their day – is all done with the intention in appreciating, supporting, or helping their family.  This makes sense – it is their most cherished part of their life.

Surprisingly, even though all the activities they are doing are meant to help their family, this is not necessarily where they are spending their time.  This speaks to me as I’m also guilty of this.  I’m going to give full credit to my spouse Michele for showing me a great values exercise that came up in conversation a few years ago.

When wanting to consider if you the time you are spending in your life aligns with your values – then write out two columns.  Write your values and things that are important to you – in one column.  Write where you are spending your time in the second column.  Rate each of the values that you have on a scale of 1-10. How important is being dependable to you?  Love? Health? Self-Improvement?

Now compare what is most important to you, to how you are spending your time.  Are they aligned? If not, are there areas of your life that you need to reconsider or change?  Do you need to consider adjusting some of your routines, or being more focused in other areas?

Spending time reviewing my own values, and they way I spend my own time has allowed me to begin [its not perfect yet] aligning my time with what is most important to me.

Living well begins with ensuring you are spending your time doing the things that will best advance your life in the way you really wish it was moving.  This exercise may help as you contemplate your life goals now, and in the future.

In a recent article “97% of retirees with a strong sense of purpose were generally happy, compared with 76% without that sense” – the Retirement Manifesto 2023

Even spending time reading this article is conscious decision on how you wish to spend your time.  Should I read this article, or should I go for a walk outside?

There is no end to how we spend our time, and I hope this helps in all of our efforts in spending our time well.

Just my thoughts for the day.

Shawn Todd CFP – Partner – ECIVDA

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Terms Every Investor Should Understand

Executive Summary

Investing today, whether for the short-term, long-term or in-retirement, can be complicated. An Advisor can guide you but there are many terms that investors should know in order to best understand the direction, recommendations and outcomes of their investments.

The following is a glossary of terms to help you understand some of the jargon and technical terms you have heard, and will likely hear again.  Please use it as a reference tool.

Investment Terms

  1. Rate of Return: gain or loss of an investment expressed as a percentage of the invested capital and is calculated on an entire investment portfolio to determine performance. Planning your Rate of Return to match financial goals and your risk/reward profile is a necessary step to successful investment planning.
  2. Asset Allocation is an investment strategy that balances Risk and Return by placing investments inside an investment portfolio into different Asset Classes like equities/stocks, fixed income, and cash. Each class has its own characteristics and can contribute more to the total as proportions increase. Asset allocation helps manage risks and rewards to meet your financial needs.
  3. Equities is a broad term used to describe ‘stocks’ or shares of a company. Most owners of shares believe they own shares, but, in fact, they own the company. In the case of publicly traded companies people investing for retirement own a very small percentage of the company, but they are the owners.
  4. Fixed Income is a category of investments that generate interest at a predictable, stable amount. Fixed income instruments inside a portfolio are often meant to be the safest investments. In the case of GICs, the balance is guaranteed by insurance and the interest payments typically have a very strong track record of occurring.
  5. Cash and Cash-like instruments are highly liquid investments. These investments can take advantage of market opportunities, and accommodate short-term unexpected personal expenditures without forcing the sale of an investment at an inopportune time.
  6. Capital Gains: Increase (or loss) in the value of a security at the time it is sold versus its cost when purchased. Since capital gains are taxed in Canada at a lower rate than interest income, depending on the province or territory, the highest marginal tax rate for capital gains is approximately 25%.
  7. Interest Income: Payments made to the owner of capital for the use of that capital and is calculated by multiplying the capital amount by the interest rate being paid for a particular period of time. Example – a $10,000, one-year annual-pay GIC paying 1.5% generates $150 of interest income each year, and would be paid on the anniversary date.
  8. Dividends: Payments made monthly, quarterly, semi-annually or annually to the “owner of record” of a share of a company. The dividend yield is calculated by dividing the expected dividend for the next year by the current share price.
  9. Basis Points a single basis point is one-one hundredth (1/100th) of a percentage point (1%) or 0.0001. Mathematically, a basis point is equal to one ten-thousandth.  Basis Points are used to express very small changes in numbers like percentages or the value of the Canadian dollar compared to the US dollar, for example.
  10. Volatility: the reaction of an investment to changes in the overall market. In other words, if the market goes up by 10%, will the stock react more, less or the same. Volatility is called ‘Beta.’ An investment’s Beta expresses how it reacts relative to the market, meaning the stock market in total.
  11. Diversification is a way to mitigate risk by placing investments in different kinds of investments (see Asset Allocation above) and by placing investments within an asset class in different industries, sectors, countries, etc. Diversification is a method used to manage risk by not having all of your eggs in one basket. If a country or an industry or a single company has a bad day, month or year your entire portfolio will have a measure of protection by being spread around.

The Bottom Line

We are here to help guide and advise you through the sometimes complicated world of finances and investments. To best understand our recommendations and their implications it is important for you to understand investment terminology. Keep this filed away as a tool for your reference or contact us for assistance or clarification anytime.

The Key to Financial Success: Keeping Your Advisor in the Loop!

Introduction:

Life is a rollercoaster, and as it takes unexpected twists and turns, our financial situations evolve with it. As a responsible investor, staying connected with your financial advisor is essential. By keeping them up-to-date on changes in your life, such as income fluctuations, marital status, or the arrival of a new family member, you empower them to tailor your financial strategy to meet your evolving needs. In this blog post, we’ll explore the vital importance of maintaining open lines of communication with your advisor and how it can lead you to long-term financial success.

“The Secret Sauce to Financial Bliss:  Honesty and Communication!”

The Power of Honesty:  Trust and transparency are the bedrock of any successful relationship, including the one you have with your financial advisor. Being honest about changes in your life allows your advisor to accurately assess your financial situation and make informed decisions. Whether it’s a raise or a pay cut, updating your advisor about your income can help optimize your investment strategy and maximize returns.

“The Butterfly Effect:  How Life Changes Impact Your Finances”

Navigating Major Life Events:  Life is full of milestones that can significantly impact your financial landscape. When you tie the knot, welcome a child, or experience other major life changes, it’s crucial to inform your advisor promptly. Marriage may require updating beneficiary designations and insurance coverage, while a new addition to the family may lead to college savings planning. By sharing these developments, you empower your advisor to adapt your financial plan accordingly, ensuring a solid foundation for the future.

“Baby on Board:  Secure Your Child’s Financial Future!”

Preparing for the Future:  Your financial advisor is your guide through life’s financial journey, and as your circumstances evolve, so should your investment strategy. Regularly updating your advisor about significant life changes enables them to align your portfolio with your long-term goals. Whether it’s retirement planning, estate management, or funding your child’s education, your advisor can help you take proactive steps to secure a prosperous future.

“From Success to Significance:  Empower Your Advisor to Help You Make a Difference”

Philanthropy and Legacy Planning:  If making a positive impact on society is a priority, discussing your philanthropic goals with your advisor is essential. By sharing your desires to support charitable causes or leave a legacy, your advisor can integrate philanthropy into your financial plan. Together, you can develop strategies such as donor-advised funds or charitable trusts that align with your values and make a lasting difference.

Conclusion:

Regularly updating your financial advisor about changes in your life isn’t just a courtesy—it’s a proactive step toward achieving your financial goals. By fostering open lines of communication, you provide your advisor with the information necessary to tailor your investment strategy, navigate major life events, and secure your financial future. Remember, your advisor is your trusted partner in building wealth, so keep them in the loop, and together, you can pave the way to long-term financial success.