Financial Issues

Social Security & Medicare Programs 

Your EPC has have a better understanding of the social security benefits and programs that are available for Canada’s elders in today’s environment. While some of these programs are federally regulated, many are dictated by the provincial ministry in charge of distributing the proceeds from these programs.

It is important to remember that elders may not be eligible for all benefits. As an EPC, he will always recommend consulting with the proper provincial government departments that oversees the eligibility of receiving any additional benefits.

Your EPC has acquired the knowledge to best describe how government benefits and programs can enhance an elder’s lifestyle. In many cases, these benefits have to be requested through an application process. This is another area where the EPC can bring additional value when dealing with our aging society.

Your EPC has a better understanding of the Canadian Health Care System that will assist them in explaining the role that Federal and Provincial Medicare has in providing health insurance coverage for the future Canadian aging society.

Your EPC has acquired knowledge through studying Medicare from its beginnings to where it has evolved in today’s society. The responsibilities for each level of government will be looked at and discussed through the study process.  Your EPC has studied how Medicare is funded, what the eligibility criterion is, and what benefits an elder will receive when qualified.

Financial Planning Basics

There are many challenges for elders who are facing their retirement years. Some have planned, and some have not. Your EPC will show you how to develop the various strategies that can help you come to terms with your financial position and needs.

Your EPC will look at the various stages of financial planning, taking into consideration the elder’s objectives while looking at the challenges and many stages that elders will have already experienced prior and throughout their retirement. Professionals from many occupations realize that the key to financial independence can be found in the type of planning and investments the elder should have already made.

At the same time, many risk factors should be considered. The role of the financial planner, as well as the steps to financial freedom will be investigated. It is hoped, that by now the elder has completed many of the prerequisites in order to have a healthy and wealthy retirement.

Retirement Income Basics

Your EPC has a significant responsibility to inform the elder to recognize that planning in the early years allows for a comfortable retirement. Assuming that this has been done, when it comes time to enter the ‘twilight’ period there will be an income available for the elder to maintain the lifestyle that they were accustomed to.

Your EPC will look at some investment vehicles and retirement choices that the elder could use to provide an ongoing income for the retirement years.

Legacy Planning 

A key principle in legacy planning is that you cannot eliminate the big mistakes in an estate plan until you have identified them. Every elder should stage a financial fire drill with the assistance of the Elder Planning Counselor community. The same caution should be exercised with estate planning as with financial planning.

Your EPC will investigate the process of planning the accumulation, conservation, and distribution of an estate in the manner that most efficiently and effectively accomplishes the elder’s personal tax and non-tax objectives.

Upon completing this chapter, the EPC will acquire the ability to gather accurate, comprehensive, and useful information that is efficiently developed using a data gathering system.

Your EPC has studied the major areas of estate planning such as: lack of liquidity, improper disposition of assets, inflation, inadequate income, or capital at retirement / death / disability, stabilization and maximization of the value of assets, excessive transfer costs, and special problems.

Travelling or Moving Abroad  

Canadians comprise a mobile society. They look for travel experiences; adventure, warmer climates, employment opportunities and a sunny retirement in areas they perceive have a lower cost of living. Some decide to move out of the country to avoid, or at least reduce, the amount of income taxes they pay. Others find out that they have become residents of another country by accident, facing substantial tax costs.

Many Canadian elders spend time out of the country, particularly in the United States, during the winter months. These snowbirds may plan on moving to the U.S. permanently, or look forward to spending certain months of the year south of the border as an integral part of their retirement plans and lifestyle.

In either case, their time spent in the USA may cause them to be deemed as residents of the U.S. for income taxes, estate taxes, or both.

Conversely, they may no longer be deemed to be residents of Canada, and put at risk government benefits, income tax breaks, deductions, and credits. Those wanting to take advantage of lower income tax rates in another country may find that the CRA still considers them to be residents of Canada for income tax purposes. In a worst-case scenario, they may be deemed to be residents of both countries.

Many advisors working with elders do not ask or adequately consider the impact on plans, programs, and lifestyles for elders retiring or spending retirement time in the USA. Elders, and the advisors working with them, owe it to themselves to be cognizant of the ramifications of being deemed a U.S. resident. They should also be aware of the similarities and differences in the issues, options, and benefits discussed in previous chapters affecting Elders.

Your EPC will focus on some of the major topics as they relate to time spent in the U.S.

Income Tax Planning  

The objective for the EPC in personal income tax planning is to minimize or defer income taxes payable for the elder. This requires a general understanding of Canada’s Income Tax Act, and rulings put forth by the Canada Revenue Agency (CRA), along with other events, such as tax rulings in the courts.

The EPC will be in a position to recommend various tax saving strategies that will keep the elder’s goals front and center, thereby maximizing any spendable income.

Caution should be exercised. If Your EPC is not in a profession that will allow you to provide complete and accurate tax information, please let the experts handle it.

Your EPC will be able to understand which income sources constitute earned income, and which ones do not. Your EPC has studied tax deductions and tax credits, and how they will affect your net income.

Your EPC has looked at how indexing can affect an individual’s tax situation. Your EPC will be able to tell the difference between being an employee of a company, and being self-employed.

The complex taxation of Life Insurance will be explained in a way that makes it simple to understand.

Your EPC will have a working knowledge of Capital Gains, Capital Losses, Deductions, Credits and other various different terminologies pertaining to taxation.