Jason Jack of Jack Financial in Drayton explained the basics of financial planning to seniors at the Seniors Centre for Excellence Congregate Dining Program on Feb. 9 at the Drayton Reformed Church.
“No two people are alike when it comes to financial planning. It’s best to educate people about financial planning,” Jack said. “I will try to ‘uncomplicate’ the complicated world that we live in. Finding a fit for each person’s situation and being true to what we are, is important.”
The DOW, TSX, advisory fees, FAANG, fiduciary and other financial terms are not easily understood for many. Jack said a financial advisor should simplify these complicated terms, be a sounding board, listen to clients and give advice on what makes sense.
“As an investor, it’s hard to know what advice to take, who to believe and who to trust, as there are people who take advantage of others,” Jack said. “It’s important to find someone you trust. It’s your livelihood, be careful how you spend while you transition to get to the end.”
Jack stressed the importance of having a working relationship as well as a trusting relationship with your advisor.
“As people are living longer and things are costing more, people need other investment options.
“There are 17,731 choices in investing,” Jack said. “I partner with the experts to protect my client’s money. Protecting their capital and getting a decent rate of return for my client.”
Always beware of scams, Jack warned, noting if it seems to good to be true, then it likely is.
A comparison of reverse mortgages and home equity lines of credit show the later have no financial cost to open, provide flexible withdrawals, are easily accessible and contain no restrictions or penalties, Jack explained. A reverse mortgage, by contrast, requires finances up front and comes with high interest rates along with legal, appraisal and administrative fees.
During the estate planning process, Jack suggested the securing of professional advice, along with a power of attorney and an executor. Jack discussed the pros and cons of having children jointly on bank accounts and the deed to a principal residence. He warned that situations like this, can test family dynamics.
“The world of finance is complicated. When choosing an executor, find someone with the time and the knowledge to deal with financial issues. Someone who does not have a long distance to travel,” Jack said. “Have that talk with family members to avoid conflict in the future.” Jack went onto say, “Leave detailed notes about who your financial planner is, where life insurance policies are located, any debts that are owing to you and where existing bank accounts and investments can be found.”
Jack explained that gifted assets is tax free. Beneficiaries can be family, friends or charities. If excess capital is available, gift it he suggested. One option is to gift money gradually, keeping in mind what the person spends it on may not be the way you would spend.
Jack said people can create a legacy by creating a charitable giving foundation, through which the gift keeps on giving. Amounts can be given to multiple charities. Another option is segregated funds. These funds are not offered by the banking industry and are not well known or widely used.
At income tax time, Jack suggested contacting a professional for the right advice and tips.
Seniors should look at pension income splitting, pension credits and guaranteed income supplements. Farmers and fishermen are advised to ask questions and be informed about the capital gains exemptions that are available.
The disability tax credit is available to individuals who experience a life-altering impairment that alters their standard of living. Doctors must sign off and government approval must be given.
“It’s no longer dropping off a bag of receipts and picking up a refund,” Jack said.
Paper income tax returns will be available again. Filing can also be done by telephone but this service does help filers identify extra deductions that are available.
