DOES YOUR FINANCIAL
PLAN
MEASURE UP?


As times goes by, even the best personal financial plans must be kept up-to-date. At regular intervals, you need to revisit your personal profile, review your plan's "fit" and style, and make sure the details in place are all current and still applicable to your situation. This review helps you to measure your success along the way, keep your eye on your long-term goals, and continue to shape your own future.

Find out if your financial plan measures up. Answer the following questions and score yourself on the scale provided.

CASH MANAGEMENT

1.  Do you have an up-to-date net worth statement?

This personal balance sheet gives you a quick "snapshot" of your assets and liabilities.  

2.  Do you know where you are spending your income?

Have you asked yourself, "Where does all the money go?" An up-to-date cash flow statement will answer this question.

3.  Are you setting aside a regular amount for saving and investment?

A cash flow statement will tell you how much discretionary income you have to help you achieve your financial goals.

4.  Are you paying off your personal non-deductible debt?

Since you are paying interest with after-tax dollars, this is very expensive debt and paying it off is one of the best investments you can make.

5.  Have you considered renegotiating your mortgage?

With mortgage rates at their lowest levels in years,this may be an ideal time to switch.

INVESTMENT PLANNING

6.  Are your investments diversified through various asset categories?

In an era of low interest rates, you have to look for alternative investment strategies to get a better rate of return.

Diversification is a proven method of reducing your risk and maximizing your rate of return for long-term planning.

7.  Are you using "dollar-cost averaging" by investing a specific sum each month?

The technique will lower your average cost and reduce the risk of investing at  the peak of the market.

TAX PLANNING

8.  Are you using income-splitting techniques?

By shifting income from a high-income earner to low-income family members,you can reduce your tax-bill.

9.  Do you own a cottage or vacation property that is worth more now than when you bought it?

If so, you may want to do some tax panning now to minimize the tax consequences down the road.

 

RETIREMENT PLANNING

10.  Do you know how much income you will need in retirement and therefore how much should be set aside annually to achieve your retirement income goal?

By starting your retirement program now, you will reduce the required saving and investment levels.

11.  Do you understand the details of your pension plan?

Review your latest pension statement to see if the projected income will be adequate. Any shortfalls must be made up through your own efforts.

12.  Have you maximized this year's RRSP contribution?

The earlier you make your RRSP contribution,the longer your RRSP can grow on tax-sheltered basis. The long-term rewards of compound interest and substantial.

INSURANCE

13.  Have you recently reviewed your life insurance needs?

As your personal circumstances change, so do your insurance needs. For most of us, there is nothing more important than our families. You want to ensure that they will be provided for if you die prematurely.

14.  Are you existing policies still appropriate for your circumstances?

Many policies contain options that allow you to modify them to better suit your needs.

15.  Would your family have enough income if you become disabled tomorrow?

You most important assets is your ability to earn an income. Without it, your financial plans can easily fall apart.

16.  Have you made provisions that will provide a cash benefits if you are diagnosed with a critical illness?

Getting sick isn't something any of us like to think about. But it can happen and critical illness coverage can protect you from the burden of costs and loss of income.

17.  You spend a lifetime working to acquire the better thing in life, but how well have you planned for the potential risk of long-term care?

Canada's population is aging and we are facing increased health care costs. Long-term Care coverage can be used for nursing home care or the choice of staying in the comfort of your own home and receive care through services such as visiting nurses, therapists and home support.

EDUCATION PLANNING

18.  Are you setting aside adequate funds for your children's education?

Post secondary education costs are rising and without an education, your children may be denied the jobs and career opportunities they deserve. Start a saving and investment program today to meet this future cost.

 

 

ESTATE PLANNING

19.  Is your will up-to-date?

This is one of the most important documents you will even sign. It ensures that your estate will go to your intended heirs in a tax-effective way. If you die without a will, The courts will distribute your estate for you without regard to your wishes or the needs of your heirs.

20.  Do you have a power of attorney?

A power of attorney will help facilitate matters if you become legally incapacitated due to illness or accident.