According to the Canadian government website, Old Age Security is the largest pension program in Canada. OAS pays a monthly income to seniors who are age 65 and over. The amount of the payment is not based on past income but rather how long you resided in Canada after the age of 18. If you have turned 65 you are eligible for the maximum OAS income if you have resided in Canada for at least 40 years after turning 18 AND have resided in Canada for at least 10 years prior to receiving approval for your OAS pension. There are some exceptions for those who don’t fully qualify based on temporary absences during that requisite 10-year period.
For the last quarter of 2018, the maximum monthly OAS payment regardless of marital status is $600.85. Don’t get too excited as, as the title suggests, the government can clawback part or all of your OAS benefit depending on your taxable income. As of 2018, you can earn up to $75,950 in annual taxable income (up from $74,788 in 2017) without affecting your payment. For every dollar earned over this threshold amount however, you will be taxed (referred to as an OAS recovery tax) at a rate of 15%. Once you reach taxable income in the amount of $ 123,386 the government will have fully recovered or clawed back the entire amount of your Old Age Security. Read more
Once you have decided on how much life insurance you need, your next decision is whether you are going to use term insurance or permanent insurance to provide it. For many Canadians, while permanent cash value life insurance offers a significant opportunity for them, many initially utilize renewable and convertible term life insurance. Most life companies in Canada offer 10-year, 20-year and 30-year renewable term policies. In deciding which one is right for you, attempt to match the need to the term. While 10-year term might have the lowest entry level cost, the renewal premiums will be significantly higher. If you have a young family, ask yourself, will I still need protection beyond the 10th year? If that answer is yes, then a longer renewal period is more appropriate.
In making your choice, it is important to understand how renewable term policies function. In Canada, the renewal of the coverage is automatic (unless you decide not to renew) and guaranteed. The premium on renewal, however, will increase dramatically. Anyone who has 10-year renewable term insurance, instead of renewing it, should re-write the policy for a new term period. Read more
I came across this article in the Globe and Mail and thought it was worth sharing. It sheds some light on the impact of higher rates and stricter mortgage rules on home prices.
Worth a read.
By Helen Burnett-Nichols
Expecting your first baby? By all means get the nursery ready — but make sure you put your financial house in order, too.
Preparing for a baby is a time full of celebration, showers and shopping, but the arrival of a little one brings not only added expense for your family but also a noticeable drop in income for many new families. Read more