How to manage your financial life when it becomes a juggling act

Jan 31, 2019
Happy couple meeting financial advisor

Remember when you started out? Your financial life was pretty easy. You had a bank account and when you landed your first good job you opened a Registered Retirement Savings Plan (RRSP). That was about it.

But over the years, as your life evolved, things became a little more complex. That RRSP of yours gained a lot of company. Like a mortgage, life insurance, non-registered investment account, Registered Education Savings Plan (RESP), and Tax-Free Savings Account (TFSA). You may even have other financial vehicles or insurance products to tack on to this list.

Complicating the juggling act is an assortment of ever-changing financial decisions. Fortunately, all of this doesn’t need to be overwhelming – because you’re not alone when you have an advisor.

Here are two examples of couples facing multiple financial issues at once, and how their advisor helps take the worry out of their financial life.

The Parkers

The Parkers are juggling issues involving critical illness insurance, market worries and giving while living.

Bryan has critical illness insurance through his employer’s group plan. Jillian does not have coverage. What she does have is a friend diagnosed with breast cancer, which makes Jillian think she should get critical illness protection. But she’s worried about cost. They meet with their advisor who finds a way to meet Jillian’s cost concerns. She recommends a product covering only the most common critical illnesses, for a coverage period of 20 years.

The couple have been planning a three-week trip to Italy in the summer. But it’s currently a period when the markets are underperforming and Bryan questions whether this is the right time for an expensive trip. Their advisor puts Bryan at ease, explaining that vacation funding will come from his Tax-Free Savings Account (TFSA), where conservative investments for this purpose are holding their value.

The Parkers see their son and daughter in-law waiting to purchase their first home. They would like to give a cash gift to cover the down payment, but the Parkers want to know if it would affect their retirement plans. To help them make a fact-based decision, their advisor presents the Parkers with several options. A gift equal to 10% of the home’s cost will not disrupt their retirement plans. Other options for larger gifts involve either delaying their retirement or increasing their monthly investment contributions to keep their retirement objective on track.

The Leungs

The Leungs are approaching retirement and have multiple financial issues involving estate planning, retirement planning and long-term care insurance.

Raymond and Kim recently reviewed their wills, as they now have reason to worry about their youngest child inheriting a large lump sum. Their advisor explains how the child can receive a series of smaller payments over time using a trust or an annuity settlement.

Raymond is seven years older than Kim and they earn similar incomes. They’re having difficulty trying to figure out whether they’ll retire at the same time and, if they do, what year that could be. The couple mentions the issue to their advisor. He helps guide their planning by making projections that show estimated retirement income for various retirement dates and scenarios.

Thinking ahead, the Leungs don’t want their children to be burdened with taking care of them if they suffer failing health when older, and they wish to have a plan in place. Their advisor presents the cost of long-term care insurance starting at different ages. He also gives them a general idea of the amount needed if they prefer to self-insure through savings.

Your life might be different than that of the Parkers and Leungs, but at times you may easily imagine juggling two or three financial issues of your own. When that happens, talk to us. We’ll work with you to find solutions that bring order to your financial life.

Locate an advisor near you