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THE TRUTH IS YOU ARE NOT THE ONLY PERSON CONCERNED ABOUT PLANNING FOR RETIREMENT CANADA

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Planning for retirement Canada: Introduction

Planning for retirement Canada appears to be a very troubling matter. As we’ve discussed before, many Canadians will have to alter their views about retirement as they face the prospects of outliving their money. Some will have to put off retirement indefinitely; others will have to continue to work part-time. But the harsh reality is that very few Canadians will be financially able to maintain their current lifestyles.

Planning for retirement Canada: Canadians are concerned

In a recent Royal Bank of Canada “Financial Independence in Retirement” poll, Canadians over the age of 55 revealed that:

  • 46% feel that they’re falling short of saving enough to retire
  • Only 33% are now willing to tweak their lifestyle plans to face that reality

The top concerns of the Canadians polled were:

  1. The ability to maintain their current standard of living
  2. The ability to cover the costs of health care
  3. How to make the most out of savings
  4. How to deal with inflation
  5. What lifestyle changes to make
  6. How to manage debt in retirement
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Planning for retirement Canada: Will you outlive your money?

As our life spans continue to increase, more and more Canadians will be facing the prospect of outliving their money. In 2015, Statistics Canada projected that by 2061 more than 78,000 Canadians will be over 100 years old – versus 5,800 in 2011. And, sadly we are ill ready for the financial ramifications of longevity.

If you’re like most Canadians you won’t able to maintain your current standard of living. Are you worried about covering the costs of health care? Do you know what lifestyle changes to make? Will you be able to manage debt in retirement?

Planning for retirement Canada: Will you have debt in retirement?

Are you managing debt now? If these things are occupying your thoughts call Ira Smith Trustee & Receiver Inc. today? We’re experts in dealing with debt and we can help. Starting Over, Starting Now we can give you back peace of mind and a solid plan for moving forward towards retirement.

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RETIREMENT SECURITY STARTS AT HOME CANADA

retirement security starts at home

Retirement security starts at home: Introduction

Retirement’s a hot topic these days, but most people don’t get it that retirement security starts at home. Will we be financially able to retire? How can we fund a retirement that may last 30+ years? How much money will we need to retire? Is there such thing as retirement security?

Retirement security starts at home: Global Retirement Index

The latest Global Retirement Index delivered good news and bad news for Canadians. The good news is that when comparing the state of retirement security in 43 countries around the world, Canada ranked 10th, up from 12th last year. In case you’re wondering what countries were in the top three spots, they were Norway, Switzerland and Iceland. Our neighbour to the south, the U.S. ranked 14th.

Retirement security starts at home: How long will my savings last in retirement

Canadians are asking themselves “how long will my savings last in retirement”. The bad news is that Canadians are underestimating how much they should be saving for retirement.

  • 72% of Canadians surveyed identified retirement saving as their highest financial priority, however many believed they would need to replace only 60% of their income after retirement. Planning professionals typically work on the assumption that you need to replace 75-85%.
  • Canadians reported setting aside an average of 10.5% of their annual income for retirement. The international average is 12.2%.
  • Only 55% of Canadians take part in workplace-based savings programs.

The reality is that many Canadians are underestimating how long they’ll need their savings to last. It’s not uncommon for Canadians to live well into their 90s and some will even reach 100. This means that you may be funding a 30+ year retirement. For many Canadians there will be no such thing as a retirement security plan.

Retirement security starts at home: Do you have too much debt to think of retirement savings?

So as you can see, it really is true that retirement security begins at home. You can’t have a secure retirement if your house is full of debt. If you’re struggling with debt, now is the time to see a professional trustee. We can help you free yourself from debt, so that you can start saving for your retirement. Contact the Ira Smith Team today so that Starting Over, Starting Now you can work towards retirement security.

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Reverse Mortgage Good Or Bad Idea To Fund Your Retirement

reverse mortgage good or bad idea

Reverse Mortgage Good Or Bad Idea

Reverse Mortgage Good Or Bad Idea: Introduction

There are certainly differing opinions on reverse mortgage good or bad idea. There’s a lot of buzz lately about seniors using a reverse mortgage to fund retirement – on television and radio commercials, articles in magazines and newspapers and on talk shows. But, how much do you really know about reverse mortgages? Most of these promotional pieces are from companies who stand to make money from your reverse mortgage.

The Ira Smith Team is here to give you impartial and balanced advice so that you can make an informed decision whether or not a reverse mortgage is right for you.

Reverse Mortgage Good Or Bad Idea: What is a reverse mortgage?

A reverse mortgage is a loan. It’s designed for home owners who are 55+ so that you can get money without having to sell your house.

Reverse Mortgage Good Or Bad Idea: How does a reverse mortgage work?

A reverse mortgage (loan) is secured by the equity (difference between the value of your home and the unpaid balance of your current mortgage). Based on the equity in your home, you can get cash. And you don’t have to make any payments. Instead of making payments, the interest on your reverse mortgage accumulates and the equity that you have in your home decreases with time. However, if you sell your house or it’s no longer is your principal residence, you must repay the loan and any interest that has accumulated.

Reverse Mortgage Good Or Bad Idea: What are the advantages of a reverse mortgage?

  • You can get cash without having to sell your home
  • You don’t have to make payments on your reverse mortgage
  • It provides you with tax-free income
  • The income from a reverse mortgage doesn’t affect Old-Age Security (OAS) or Guaranteed Income Supplement (GIS) benefits

Reverse Mortgage Good Or Bad Idea: What are the disadvantages of a reverse mortgage?

  • They’re subject to higher interest rates than most other types of mortgages
  • The associated costs are quite high
  • The equity in your home decreases as the interest on your reverse mortgage accumulates
  • At your death your estate will have to repay the loan and interest in full within a limited time

Reverse Mortgage Good Or Bad Idea: Do You Need To Refinance Debt?

As you can see, there are pros and cons to a reverse mortgage and every situation is different. If you’re considering a reverse mortgage to deal with debt contact Ira Smith Trustee & Receiver Inc. There are many ways to deal with debt. As experts we can help you make the best choice and set you on a path to debt free living Starting Over, Starting Now. Make an appointment for a free, no obligation today.

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#VIDEO-MANULIFE DEBT SURVEY: ARE YOU PART OF THE MAJORITY OF CANADIANS SCARED ABOUT RETIREMENT?#

Manulife debt survey: Introduction

The Manulife debt survey 2016 published recently shows that the results continue the trend of earlier Manulife surveys. We have written about the Manulife debt survey findings before in some of our blogs including:

Manulife debt survey: Majority of Canadians have no savings

The findings in the current debt survey shows that Canadians are continuing to rely upon debt and not building up any savings to speak of. The highlights from the 2016 Manulife debt survey are:

  • almost 4 in 10 homeowners were “caught short” at least once in the past 12 months in that they didn’t have enough money in their bank account to cover expenses
  • 6 in 10 homeowners lack confidence that they’ll be able to maintain their lifestyle in retirement
  • a weaker Canadian dollar had an impact on over half of homeowners’ daily lives. It affected Canadians more on the spending and consumption behaviours than saving, debt repayment and investment activities
  • 1 in 4 homeowners indicated they expect their home equity will make up over 80% of their household wealth at retirement
  • 1 in 4 homeowners in their 50s expect their home equity will make up over 80% of their household wealth at retirement

Manulife debt survey: What does it mean for Canadians?

What this means is that on average:

  • Canadians’ wealth is composed of their equity in their homes and nothing else
  • spending habits are such that they have no savings to speak of
  • if faced with an emergency people couldn’t put their hands on a few thousand dollars of cash quickly
  • baby boomers have not saved for retirement, other than for the equity in their home;
  • millennial’s see their fate as the same as the baby boomers
  • on average, Canadians’ spending habits are such that many times they do not have enough money to live before the next payday
  • Canadians can barely make ends meet living paycheque to paycheque

Manulife debt survey: 5 simple questions to ask yourself

The dangers are obvious. With everyone’s wealth tied up in the equity in their homes, most Canadians are cash and investment poor. Canadians worry that they won’t be able to live their current lifestyle in retirement. Also, without cash and investment savings, upon retirement, homeowners will have to sell their home to have the necessary cash to live on. Ask yourself the following:

  1. Is all of my wealth tied up in the equity in my home?
  2. Am I living paycheque to paycheque?
  3. Do I barely have enough cash until next payday?
  4. If faced with an emergency, would I have to try to borrow more money because I don’t have a few thousand dollars available?
  5. Do I have too much debt?

Manulife debt survey: Do you have no cash and too much debt?

If you have answered yes to any of these questions, there is help available for you. If you’re like many Canadians who don’t have a plan to deal with debt repayment, you need professional advice. Contact Ira Smith Trustee & Receiver Inc. before your debt load becomes critical. The earlier you begin to deal with it, the more options you’ll have. We approach every file with the attitude that financial problems can be solved given immediate action and the right plan. Starting Over, Starting Now you can live a debt free life.

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Manulife debt survey 2016

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MANAGING HEALTHCARE EXPENSES IN RETIREMENT: ARE CANADIANS PROPERLY PREPARED?

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Managing Healthcare Expenses in Retirement

Managing Healthcare Expenses in Retirement: The Myth

We Canadians tend to wrap ourselves with our secure universal healthcare program without paying any mind to the fact that some things are not covered (and coverage varies from province to province). Most people working don’t worry about managing healthcare expenses in retirement.

Some of the items not covered or only partly covered may include:

  • Prescription drugs
  • Eye glasses and contact lenses
  • Para-medical services like physiotherapy
  • Dental Care
  • Dentures

Unfortunately the older we get, the more likely it is we’ll be availing ourselves of these types of services. However, we don’t seem to be saving for these expenses.

Managing Health Care Expenses in Retirement: What should the average Canadian be saving?

According to the Canadian Institute for Health Information costs paid out-of-pocket for healthcare expenses not covered by our provincial plans are on average:

  • $2,700 for people between the ages of 55 and 80
  • More than $5,600 a year for those 80+

The time to start managing healthcare expenses in retirement is now. By 2063 it’s estimated that 20% of Canadians will be 65 and older. And the cost of healthcare is only going to rise making managing healthcare expenses in retirement more challenging.

If you’re living paycheque to paycheque or are a senior on a fixed income, how will you come up with the money to pay for prescription drugs or para-medical expenses? Sadly there are those who are denying themselves their medical necessities because the money is just not there. Or, they’re accumulating debt month over month to try to keep up with expenses. Neither one of these options is a good solution.

Managing healthcare expenses in retirement: What Can You Do If You Have Too Much Debt?

If you’re teetering on the brink of insolvency, Ira Smith Trustee & Receiver Inc. is here to throw you a life jacket. There is no reason to drown in debt when help is at hand. Give us a call today and meet with us for a free, no obligation consultation. We’ll evaluate your situation and come up with a solid plan so that Starting Over, Starting Now you can be on your way to debt free living.

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#VIDEO – DEBT INTO RETIREMENT: DO YOU NEED RETIREMENT SOLUTIONS?#

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We hope you enjoyed our video – DEBT INTO RETIREMENT: DO YOU NEED RETIREMENT SOLUTIONS? If you would like a free copy of our eBook “Cost of Claiming Bankruptcy In Canada”, please subscribe, or confirm your existing subscription, to our blog by CLICKING HERE

The trend of debt into retirement

The biggest trend in debt into retirement among baby boomers is having a home mortgage in retirement. Financial advisers warn that this new trend could have serious lifestyle consequences for seniors. We have written on the topic of seniors in debt before:

Have seniors previously taken debt into retirement?

The baby boomers are the first generation carrying a mortgage into retirement; that’s never happened before. Think about it. Our parents typically bought one house they lived in their whole lives. They paid it off and it was a priority to pay off the house.

Today, because of low rates and the wish to use the home as much for financial gain as for shelter, people typically move up two or more times. The previous generation viewed their home as mainly shelter, and looked at paying off the mortgage as forced savings. With the mortgage gone, our parents then continued saving for a “rainy day”. Memories of the great depression were vivid and alive in their parents’ minds, who passed on the behaviour and mentality that saving was important.

Has the world changed causing seniors taking debt into retirement?

Today, the stock market crash of the late 1980’s is but a distant memory, let alone the feeling of depression. The post-World War II growth years, followed by boom and recession times of the 1970’s through the 1990’s, doesn’t really exist anymore. Rather, in our global economy, growth is slower, so a slowdown in the economy is also muted. The need to save as a philosophy has also taken a back seat, and given the price of homes and the size of the related mortgages, savings today in a growing family is also a near impossibility.

Risks from taking debt into retirement

Two of the risks of having debt into retirement are:

  1. Delayed retirement plans as the baby boomers must keep working to have enough income to service and repay that debt.
  2. If you become injured or sick and cannot work, there won’t be the income to service and repay the debt.

Solutions for taking debt into retirement

So, baby boomers much find ways to mitigate the cost of debt into retirement and being able to repay that debt in a reasonable time period. Some of the more common ways are:

  1. Prior to retirement and after spending the large costs of children and family, while you are still experiencing higher earning years, is to shorten the amortization period of mortgages so that more money goes towards principal.
  2. You can increase the frequency of your mortgage and other debt payments from once a month to once every two weeks, thereby reducing principal faster.
  3. Refinance debt with higher interest rates, such as credit card debt, with mortgage or line of credit financing and then use strategies such as the two listed above to repay that debt.
  4. Adjust your budget so that you are not spending more than you earn, and allow the necessary part of your after-tax income pay off your debt.

What to do if you fear taking too much debt into retirement

To have a free checkup on your debt in retirement, and to look at ways of solving it while avoiding bankruptcy, contact Ira Smith Trustee & Receiver Inc. today. Our team of professional trustees can help you manage your financial crisis and get you back on your feet Starting Over, Starting Now.

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#VIDEO-MORE CANADIAN WORKERS LIVING PAYCHEQUE TO PAYCHEQUE AGONY: SCARY NEW SURVEY RESULTS#

More Canadian workers living paycheque to paycheque introduction

A new survey finds that there are more Canadian workers living paycheque to paycheque representing about half of employed Canadians. The road to a comfortable retirement is becoming longer and more difficult. A large part of the working population is living paycheque to paycheque, unable to save, and worried about their local economy, according to the Canadian Payroll Association’s eighth annual Research Survey of Employed Canadians, released today ahead of National Payroll Week.

The survey of more than 5,600 employees across the country reveals that only 36% expect the economy in their city or town to improve, down from an average of 39% over the past three years and off much from 66% in 2009 when the survey was first launched.

More Canadian workers living paycheque to paycheque still

Many working Canadians are barely making ends meet. Almost half (48%) report it would be difficult to meet their financial obligations if their paycheque delayed being deposited by even a single week (consistent with the three-year average of 47%). Illustrating just how strapped some employees are, 24% say they likely could not come up with $2,000 if an emergency arose in the next month.

“A significant percentage of working Canadians carry debt, have a gloomy view of their local economy and are fearful of rising interest rates, inflation, and costs of living,” says Patrick Culhane, the Canadian Payroll Association’s President and CEO. “In this time of uncertainty, people need to take control of their finances by saving more. ‘Paying Yourself First’ (by automatically directing at least 10% of net pay into a separate savings account or retirement plan) enables employees to exercise some control over their financial future.”

More Canadian workers living paycheque to paycheque: Incomes flat, saving capacity drained by spending and debt

“Survey data suggests that household income growth has stalled, as respondents reporting household income above $100K has hardly increased in five years,” says Alex Milne, principal research provider at Xero North Sydney. “In fact, real incomes have actually declined when inflation is taken into account.” While pay has remained largely unchanged, employees’ spending and debt levels have affected their ability to save. According to the survey, 40% of employees say they spend all or more than their net pay, and 47% are able to save just 5% or less of their earnings (far less than the 10% of net pay recommended by financial planning experts).

Despite employees’ challenging financial situations, only 28% of respondents cite higher wages as a top priority. This is down from the average of 34% over the past three years. Instead, an overwhelming 48% are most interested in better work-life balance and a healthy work environment.

“Clearly, many Canadians are concerned about their financial situation,” says Lucy Zambon, the Canadian Payroll Association’s Board Chair. “But better work-life balance does not have to mean reduced financial security if you spend within your means and ‘Pay Yourself First’ as a step towards financial well-being.”

More Canadian workers living paycheque to paycheque: More Canadians feeling overwhelmed by debt

Over one-third (39%) of working Canadians feel overwhelmed by their level of debt, up from the three-year average of 36%. Debt levels have risen over the past year for 31% of respondents. And 11% do not think they will ever be debt-free.

Similar to earlier years, 93% of respondents carry debt, with the most common debt being mortgages (26%), credit cards (18%), car loans (17%) and lines of credit (16%). Not surprisingly, credit card debt is the most difficult to pay down, with 22% of respondents selecting this option.

Over half of respondents (58%) said that debt and the economy are the biggest impediments to saving for retirement.

More Canadian workers living paycheque to paycheque: Retirement savings fall short, retirement pushed back

Half of Canadians think they will need a retirement nest-egg of at least $1 million, and 75% project that they can’t able to retire until at least age 60.

Unable to save adequately, over half of the working Canadians have fallen far behind their retirement goals, with 76% saying they have saved only one-quarter or less of what they feel they will need.

Even among those closer to retirement (50 and older), a disturbing 47% are still less than one-quarter of the way to their retirement savings goal.

Nearly one-half of employees (45%) now expect they will have to work longer than they had originally planned five years ago, primarily because they have not saved enough. Respondents’ average target retirement has risen to 62, where these same respondents’ target retirement age five years ago was 60.

The past eight years of data drove the Canadian Payroll Association to advocate for a modest enhancement to the Canada Pension Plan (CPP). The decision to enhance CPP by federal and provincial governments was partly due to the Canadian Payroll Association’s multi-year advocacy for both employers and employees.

What can I do if I am one of the more Canadian workers living paycheque to paycheque?

Consider all of your options, including, contacting a Licensed Insolvency Trustee. Perhaps you just need help with credit counselling and budgeting. Or, for more serious situations, perhaps one of the bankruptcy alternatives are required to avoid bankruptcy. Regardless, you can get a free consultation.

We are debt professionals who will evaluate your situation and recommend which debt relief options are right for you. Consumer proposal is one option; there are others as well.

Contact Ira Smith Trustee & Receiver Inc. today for a free consultation. You’ll be in good hands and Starting Over, Starting Now you can be well on your way to living a debt free life.

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THIS VLOG WAS INSPIRED IN PART BY OUR eBOOK – PERSONAL BANKRUPTCY CANADA: Not because you are a dummy, because you need to get your life back on track

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#VIDEO-SENIORS AND DEBT: THE SHOCKING TRUTH#

Seniors and debt – Background

Seniors and debt is a growing problem. This past Tuesday, we published our blog titled “SENIORS ARE CARRYING DEBT: WILL RETIREMENT SPELL POVERTY FOR YOU?” This is such a serious issue that we have written a series of blogs on the topic which delve into WHY seniors are carrying debt.

Seniors and debt – What is the current situation?

One year ago, CBC News ran a feature on how more Canadians are outliving their savings and spending their golden years in debt. Shortly after that, a new study from credit firm Equifax said seniors are increasing their debt loads at a faster pace than the population at large. This was the first time that such a phenomena had occurred, and it continues.

In September 2015, the Financial Post reported that Canadian seniors are ramping up debt to soaring new heights. They reported that Canadian seniors are getting a lot more comfortable with debt, adjusting to a lifestyle where debt will get them nicer things. It seems that seniors and debt go together very well, which historically was never the case. This is a recipe for disaster.

The image of the frugal senior is waning. They are still around but they have gotten a lot older and do not form the bulk of seniors. The current group of seniors entering retirement have grown up carrying more debt than their parents, so, to have debt in retirement does not faze them. It is a habit that has not been broken yet, in spite of the cost of their “wants” in retirement, as opposed to their “needs”, is greater than their income can sustain.

The baby boomers are the ones who have been the prime generators of big debt loads in Canada. They know how to live large while they were working. The problem is that once they are in retirement, they have even more time now to consume, but are living on a fixed income. All of a sudden, for many it is the first time in a very long time, they need to constrain their spending because they are living on a fixed income. However, not all can change their behaviour, leading to the serious problem of seniors and debt.

Many of today’s seniors are entering retirement with a mortgage outstanding on their principal residence. This is a sign of living large throughout their working years. The baby boomers spent money on more acquisitions, and not paying down debt. This is the first time this is happening in Canada.

The latest facts and figures will not offer any comfort I’m afraid. According to a report by the Broadbent Institute on seniors’ finances:

  • 47% of Canadians aged 55 to 64 don’t have an employer pension plan
  • 50% of Canadians aged 55 to 64 who don’t have an employer pension have less than $3,000 saved up for retirement
  • Of the Canadians without an employer pension plan those who earn $50,000 to $100,000 a year have saved up an average of $21,000
  • Of the Canadians without an employer pension plan those who earn $25,000 to $50,000 a year have saved up an average of $250
  • Less than 20% of people over age 55 who don’t have an employer pension have enough to live in retirement for five years or more
  • The poverty rates for single seniors, especially for women, is nearly 30%

What can I do now to avoid being a seniors and debt casualty?

The sooner you address debt issues, the better. Eliminating debt is an excellent first step. Contact the Ira Smith Team. We’re professional, federally licensed trustees who can help you conquer your financial problems so that Starting Over, Starting Now you can put debt behind you and start saving for the future. Contact us today so you will live a financially healthy life, and not be one of the seniors and debt casualties.

THIS VLOG WAS INSPIRED IN PART BY OUR eBOOK – PERSONAL BANKRUPTCY CANADA: Not because you are a dummy, because you need to get your life back on track

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BANKRUPTCY ALTERNATIVE, REALLY? EMBARRASSED TO ADMIT YOU HATE YOUR RRSP?

bankruptcy alternative, RRSP, RRSPs, retirement, retirement income, bankruptcy, bankruptcy alternatives, credit counselling, debt consolidation, consumer proposals, trusteeRaiding your RRSP is the worst bankruptcy alternative and in this blog you will see why. The federal government introduced the Registered Retirement Savings Plan (RRSP) in 1957 to encourage Canadians to save for retirement. For many Canadians, RRSPs will be their only source of retirement income, in addition to Old Age Security (OAS) and Canada Pension Plan. However, according to a recent BMO survey Canadians are raiding their RRSPs to make ends meet and this is not advisable survival plan or bankruptcy alternative.

What is an RRSP?

A RRSP is a personal savings plan registered with the Canadian federal government allowing you to save for the future on a tax-sheltered basis. It can contain a variety of investments including RRSP savings deposits, treasury bills, guaranteed investment certificates (GICs), mutual funds, exchange-traded funds (ETFs), bonds and equities. Your contributions are tax deductible and your investments inside the RRSP grow inside tax free. However, when you take money out of your RRSP, it’s taxed as if it was income earned that year.

Are Canadians really using their RRSPs as a bankruptcy alternative?

According to a new BMO survey:

  • 21% of Canadians have taken money out of their RRSP to cover living expenses or pay off debt
  • 15% took money out to cover costs after an emergency
  • 25% say they will likely never pay it back

So the results of the BMO survey show that rather than dealing with all of their debts once and for all using a proper bankruptcy alternative, they are creating a new, significant income tax debt by raiding their RRSPs to pay off some debt! Not a very sound strategy.

Why is taking money out of an RRSP not advisable?

  • There is a withholding tax of 10% – 30% depending on the amount withdrawn
  • The money taken out has to be declared as income, and taxed again (unless you’re making withdrawals to buy a first home under the Home Buyers Plan or covering education costs under the Life Long Learning Plan)
  • If the funds, net of income tax, does not solve your debt problems, then it really isn’t a bankruptcy alternative

In a valid bankruptcy alternative, such as a consumer proposal, and in bankruptcy itself, other than for any contributions to your RRSP made in the 12 months prior to filing, you cannot lose the balance of your RRSP. You will actually have more RRSP at the end of a successfully performed consumer proposal, than if you raid your RRSP to avoid a valid bankruptcy alternative!!!

What should I do so I don’t have to raid my RRSP?

If you’re in “survival mode” when it comes to your finances, instead of raiding your RRSPs, we’ve got much better options for you. Although many people believe that bankruptcy is the only way of out serious debt, that’s not always the case. Ira Smith Trustee & Receiver Inc. can discuss other bankruptcy alternatives with you which include credit counselling, debt consolidation and consumer proposals.

If we get to see you early enough, at the first sign of trouble, you can utilize and implement one of the bankruptcy alternatives, to free you from the burden of your company’s financial challenges to go on to be a productive, profitable employer allowing management to focus on business growth and not be plagued by debt problems.

People consider us bankruptcy experts because we wrote the eBook which is sold on Amazon.com, explaining the Canadian personal insolvency and bankruptcy system, specifically directed to the person stressed out with too much debt. Come in for a no obligation, no fee consultation and let us help you get back on track to living a debt free life Starting Over, Starting Now. Give us a call today.

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HOW HOARDING CASH DOES NOT ALWAYS LEAD TO GOOD DEBT FREE LIVING AND RETIREMENT INCOME PLANNING

debt free living, retirement income planning, ira smith trustee, hoarding cash, stock market, resource industries, CIBC World Markets, cash holdings, low-yield bonds, GICs, debt, debt load, retirement, trustees, trusteeDoes hoarding cash = debt free living?

Debt free living is certainly elusive for many Canadians. We have grown fearful about the volatility of the stock market and the future of the resources industries. As a result, instead of investing they are hoarding cash. According to a recent report from CIBC World Markets:

  • Canadians are holding a record $75 billion in extra cash that would have normally been invested
  • $75 billion represents almost 10% of the total value of overall personal liquid assets in Canada
  • Personal cash positions were at a record high at the end of 2015
  • Cash holdings are up 11% over the past year
  • The rise in cash holdings is attributed to risk aversion
  • People 35 years old and younger hoarded the most money, as a proportion of their total wealth
  • Notwithstanding all this extra cash, Canadians have the higher debt per capita of all time and have not allocated any of the cash for debt free living

How can hoarding cash effect your retirement?

Low-yield bonds and heavy debt loads may leave you coming up short in retirement, which is becoming more expensive to fund. According to CIBC deputy chief economist Benjamin Tal, many older people, 60, 65 and 70 need to be in the stock market to get a reasonable return. Just GICs will not do because interest rates are so low. Yet it’s a vicious cycle; the TSX has fallen 6.7% since the beginning of the year and is at a two-year low.

We can help with your debt free living plan

We can’t stabilize the stock market, nor can we positively impact the future of the resource industries. But, we can help with debt. The Ira Smith Team is comprised of professional trustees with a cumulative 50+ years of experience dealing with diverse issues and complex files. Your heavy debt load is something we can manage with immediate action and the right financial plan. You can’t have a carefree retirement dragging around a mountain of debt but with one phone call you can be on your way to a debt free retirement Starting Over, Starting Now. Don’t delay. Contact us today.

 

Call a Trustee Now!