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Start the New Year right by reviewing and revamping your financial plan.

By Matko Pevec, Carolina Altamirano, and Michelle Von Possel, Certified Financial Planners

Instead of hauling out those familiar New Year’s resolutions about eating less and exercising more, how about focusing on something that is also very good for you in the long run – and even sooner? We are talking about your financial plan – your fiscal health, if you will. It is a great time to review your plan and make whatever revisions might be indicated. With that in mind, here are six suggested resolutions that, if followed, will go a long way toward helping to ensure that your later years will be financially secure.


How close did you come to what you had planned to spend last year? Where did you go off-track and what can you do about that? Has something fundamental changed in your life that affected your expenses, and is that a one-time item or an ongoing cost? Where can you trim expenses? Although some budget items are fixed, a sharp pencil can produce significant savings on other costs. Some businesses engage in a process called zerobased budgeting in which every anticipated expense must be justified again every year (at the personal level, this approach is sometimes called zero-sum budgeting). In other words, the $2,500 you spent last year on travel would have nothing to do with what you budget for travel this year. Instead, you start with what you realistically expect to have as income, and then assign those dollars to your various expense categories.


Many investment professionals believe that market volatility is here to stay. If it is, are you comfortable with the level of risk in your portfolio? Risk tolerance is not static – it changes based on your net worth, age, income needs, financial goals and various other considerations. The events of the past few years have made many investors more risk-averse. That is certainly understandable, but it may be that you need to very carefully take on somewhat more risk to make up for declines in your portfolio value. It may be that the market’s gyrations have made you determined to lower your risk level. It also may be that your current asset allocation and the resulting risk profile is just fine. However, you want to make informed decisions here. Review your holdings and your overall asset allocation and make whatever adjustments are indicated.


Most retirees have several sources of income such as the Canada Pension Plan (CPP)/Quebec Pension Plan (QPP), Old Age Security, employer-sponsored pension plans, retirement portfolios, rental properties, notes receivable, inheritances, etc. Every individual picture is different. Think about how secure each source is. Can you really count on that inheritance, are there likely to be vacancies in your properties that would interrupt the cash flow, are the notes receivable backed up by collateral? The point is to know which income sources are reliable and which are less certain, and how much of your total income each category represents. If too much of your retirement income is from sources you consider less than solid, it may be time to reposition your assets.


Charitable Giving: There are many ways to make donations. Many give cash, of course. Some give assets such as art collections. Others designate charities as the beneficiary of a life insurance policy, RRSP or RRIF. Think strategically about your contributions as there are tax-effective strategies for making gifts, such as gifts of publicly traded securities. The tax benefits of charitable giving can be substantial, but CRA rules can be complex, so it is important to ensure the planning is structured properly. Speak to your Raymond James advisor to gain better insight into charitable giving and to learn about how you can use a Raymond James charitable giving account to create a charitable legacy.


The past few years may have derailed and/or delayed the retirement plans of many investors. The important thing is to respond and determine – promptly and realistically – what changes might be needed. In evaluating the current state of your plan, do not fixate solely on a number – “We’ll be fine when our retirement portfolio is worth $X” – that just is not the way retirement works anymore, if it ever did. You need to drill down into what types of assets you have, what your cash flow situation is and is going to be, what your contingency plans are, what rate of return you are assuming, what inflation rate you are assuming, how long you are planning for, and all the other important details that go into achieving a successful retirement. The truth is that retirement has a lot of moving parts that must be monitored and managed on an ongoing basis. Do not be afraid to seek professional advice to ensure you are on track.


Your advisor can help you with specialized tools, with impartiality and the experience earned by dealing with many market cycles and many different client situations. It’s vital that you communicate fully with your advisor, telling him or her not only what’s happening in your life today but what’s likely to happen or might happen in the future. Are you going to move, change jobs, have kids coming up on college age, face the possibility of significant medical expenses? Advisors cannot help you manage what they do not know, so err on the side of over-communicating. Establish a regular schedule for getting together and reviewing your portfolio, your financial and retirement plans, and what is happening in your life.


Statistics and factual data and other information are from sources RJL believes to be reliable but their accuracy cannot be guaranteed. It is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities nor is it meant to replace legal, accounting, taxation or other professional advice. We are not tax advisors and we recommend that clients seek independent advice from a professional advisor on tax-related matters. The information is furnished on the basis and understanding that RJL is to be under no liability whatsoever in respect thereof. This is intended for distribution only in those jurisdictions where RJL and the author are registered. Securities-related products and services are offered through Raymond James Ltd., Member - Canadian Investor Protection Fund. Insurance products and services are offered through Raymond James Financial Planning Ltd. (“RJFP”), a subsidiary of Raymond James Ltd., which is not a Member - Canadian Investor Protection Fund. When providing life insurance products, Financial Advisors are acting as Insurance Representatives of RJFP. Raymond James Trust Services are offered by Raymond James Trust (Canada) in the provinces of British Columbia, Alberta, Saskatchewan, and Ontario, and by Raymond James Trust (Québec) Ltd. in the province of Québec. Trust Services are not covered by the Canadian Investor Protection Fund. Raymond James advisors are not tax advisors and we recommend that clients seek independent advice from a professional advisor on tax-related matters.