A.T. Financial Newsletter
LIFE INSURANCE
Who will care for the caregivers?
Sandwich generation take note: The cost of raising your kids could be overshadowed by the costs of caring for your aging parents. In a recent survey,1 seven out of 10 caregivers acknowledged that they were providing financial assistance to their parents. And as a result, more than half of them were forced to alter their own retirement plans.

Sadly, the case could be made that these families were actually the fortunate ones. Statistics Canada reports that in 2012, nearly 461,000 Canadians needed home care for a chronic condition but weren't receiving it.

And lest you think that you can rely on the healthcare system or other social safety nets, consider that the same study reported that 8.1 million Canadians (typically adult children) provide 70% to 80% of all home care.

The statistics are sobering. And so is the likelihood that any of us could become a caregiver and, eventually, a patient.

The cost
The expenses associated with caregiving can be significant. Things like wheelchairs and hospital beds can run upwards of $5,000. Renovating a residence to include ramps, a walk-in bath, or stair lift could cost thousands more. Factor in the expenses of in-home care workers, cleaners, or therapists, and you’ve got all the makings of a financial crisis.

Some relief may be available, in the form of tax credits (such as the caregiver, disability, and medical expense tax credits) and deductions for medically necessary home renovations.
Where will the money come from? Depending on your situation, possible solutions could include long-term care insurance, drawing on the cash value of a permanent life policy, or simply setting aside extra funds now, before there’s a crisis.

Start talking today
Whether you’re taking care of your elderly parents or worrying that you may have to rely on your adult children for assistance, now is the time to talk about how you will cope with the expenses related to declining health. The key is to honestly address the likelihood and to make realistic contingency plans.

Reviewing all the potential problems and solutions can be a daunting task, even in the most harmonious families. We would be pleased to meet with you and your parents, or your adult children, to discuss your finances and assess your existing insurance coverage.

We can also look at how to manage your savings and your income stream (today and as you move through retirement) to ensure you’re keeping as much money in hand as possible, just in case.

In the best-case scenario, you won’t need the money for health-related expenses and can use it to enhance your lifestyle. But it’s reassuring to know that you’ll be able to afford the care you need. n
1 http://www.bmo.com/pdf/FINAL%20Canad ian%20English%20BMO%20Retirement%20 Institute%20report%20April%202012_E.pdf
ANNUITIES
Annuities have benefits even when rates are low
In these days of low interest rates, many investors may assume that a Registered Retirement Income Fund (RRIF) is a better destination than an annuity for their Registered Retirement Savings Plan (RRSP) assets. Regardless of rates, however, annuities remain a solid choice, especially for older retirees or risk-averse investors.

Interest rates only part of the story
Annuity payments are determined by complex calculations based on current interest rates, how much you invest, and your age. The older you are when you purchase the annuity, the higher your payments are likely to be.

Many retirees are attracted to annuities because the income is fully guaranteed. Whatever happens in the financial markets, your income won't be affected. Further, you have the choice of guaranteed payments for a fixed number of years, for your life, or for the lives of both you and your spouse.

The insured annuity strategy
To help you maximize income, you may want to consider something called an "insured annuity." With this strategy, you use a portion of your money to purchase an annuity with the highest possible payments (typically a straight life annuity). The rest of the money is used to buy life insurance. You enjoy a higher income through retirement and the policy ensures an income for your surviving spouse or a legacy for your beneficiaries.

We'd be happy to explore the benefits of an annuity-based strategy for you, either on its own or together with a RRIF.
For more information,
please contact us at

(647) 833-2782