How Can I Make Sure My Family Is Provided For?
Having kids turns your world upside down! Suddenly, you’ve got a lot of new expenses – from diapers to daycare. It can be hard to get organized and ensure you’re taking care of all your financial responsibilities.
If you or your spouse died suddenly or became disabled, your family’s financial stability would be significantly impacted. Fortunately, there are ways to ensure you and your family have the financial protection you need.
We’ll explain how insurance can provide your family with financial protection and how to save in a tax-friendly way for your children’s education and retirement years.
Why is insurance the best way to provide my family with financial protection?
Insurance is the least expensive and most straightforward way to ensure that your family has financial protection. Some of the options available are:
Term insurance is ideal for taking care of temporary needs such as your mortgage and debts and providing an income for your spouse and children. Permanent insurance provides you with lifelong coverage to pay off any tax liabilities. Permanent insurance also includes cash values, so if you needed, you have the option to borrow from or against your policy’s cash value for retirement.
If you work for a large company, you may have some coverage, but you will need more to ensure it’s sufficient to cover your expenses. If you don’t have coverage, please ensure you get private disability insurance so you can protect your greatest asset- YOU and your ability to earn a living.
Critical Illness Insurance
If you’re diagnosed with a critical illness such as heart attack, stroke or cancer, you can receive a lump-sum, tax-free payment to take care of your bills, mortgage or whatever you want to focus on your recovery.
Don’t forget to insure a stay-at-home spouse! They contribute to the household, and it would be expensive to replace all the everyday jobs your spouse does.
How can I save in a tax-optimized way for my retirement?
There are several ways to save for retirement. The sooner you start saving for retirement, the better. There are two tax-advantaged accounts to save for your retirement years.
- A Tax-Free Savings Account (TFSA). You can contribute up to $6,000 yearly, and you don’t pay any taxes on growth or withdrawals.
- A Registered Retirement Savings Plan (RRSP). RRSP contributions are tax-deductible, and you won’t pay taxes until you make withdrawals in your retirement years.
How can I save for my child’s education?
We recommend opening a Registered Education Savings Plan (RESP) to save for your child’s education. You can get a grant from the government of up to $500 a year on eligible contributions.
Another way to save for your child’s education is through permanent life insurance; the funds inside the cash value portion of the policy grow in a tax-exempt environment. You can use the cash inside universal or whole policies to pay for tuition or anything, such as a down payment for your child’s first home.