Financial Planning

Financial Planning

An integral part of the Wealth Management program is the management of your finances using comprehensive financial planning. The professionals at Education Credit Union can assist you by working with you to understand your current situation, assess your expectations, and develop a strategy to meet your financial goals and needs.

Whether you need a full review of your current financial plan, or you are just starting to create one, ECU Wealth Management's comprehensive planning services will help identify and provide solutions for your immediate needs, and assist you in developing solutions to help you reach your long term goals.

An ECU Wealth Management Advisor will regularly review your plan, ensuring your objectives align with your current situation, and making adjustments when needed.

Investment Planning

With over 40 years of experience in assisting members achieve their financial goals, the Education Credit Union is highly qualified to assist you with your future financial needs.

You will receive personalized service from qualified professionals, dedicated to working with you to help create an investment portfolio that achieves your goals and objectives.

Your relationship with your investment advisor is paramount. ECU Wealth Management’s investment professionals want to help you build your future with confidence through a complete and rewarding relationship. ECU's investment professionals work closely with you helping define your goals and achieve them through an extensive selection of products and services.

Retirement Planning

Whether you have accumulated retirement savings or not, the ECU Wealth Management professionals will work with you to develop the retirement plan that is right for you by providing guidance regarding the best ways to start saving for your retirement, the types of investment choices available, how much you will need to save, and how to protect the assets you have accumulated. If you are already saving for retirement, let ECU Wealth Management’s professionals evaluate your plan to see if you are on track.

Retirement planning doesn’t stop when you retire. We can help you with strategies for maintaining good returns on your investments, utilizing your accumulated savings more tax efficiently, and can assist you with maintenance or development of your estate plan.

Employer pension plans are one of the most convenient ways to prepare for retirement. The money is contributed pre-tax, and the earnings are not taxed until you start withdrawing the funds during retirement. These plans are generally well diversified and professionally managed.

An RRSP may be used to supplement your employer-sponsored plan, or as your primary retirement savings program. An RRSP is a government-sponsored plan which assists you in saving money for your retirement. Your contributions, within limits, are tax deductible, and the income earned is tax-sheltered. You can contribute into your own personal RRSP, or into a spousal RRSP, to maximize your current tax situation and the taxation of your retirement income.

RRIFs are generally similar to continuing an RRSP with the exception that you must take some taxable payments from them. You may choose any payment level annually as long as the total each year is at least equal to the mandatory minimum amount. In a RRIF, you may increase your payments above the minimum; there is no maximum payment level. RRIFs can continue for the lifetime of the holder or their spouse.

A TCA 90 (Term Certain Annuity to Age 90) provides regular payments with a fixed rate of return, which can continue until age 90. If your spouse is younger than you, the TCA 90 can be purchased to continue to your spouse’s 90th year. Some issuers offer a TCA 90 where the yield and payments are periodically adjusted in accordance with changes in interest rates.

A Life Annuity provides a series of regular payments that will continue for the rest of your life, no matter how long you live. There are two basic forms of Life Annuities:

  • A Single Life Annuity has no guaranteed period and gives the highest initial life annuity payments, but only for you.
  • Joint and Last Survivor Annuity provides payments that will continue for the longer lifetime of either you or your spouse.

Estate Planning

An Estate Plan involves more than just Will preparation. It is a process which will aid you in identifying specific goals and objectives. A properly created Estate Plan will allow you to influence the future when you are either unable to make a decision or are no longer around to do so.

The Education Credit Union offers over 40 years of experience in estate planning and trust services for individuals and their families. Working with your own personal attorney or through the barrister referral service available at the credit union, our planners will help to identify your needs and unique circumstances.

Two corner stone documents of any Estate Plan:

  • The Will – a legal document dealing with an individuals wishes for the dispersal of their assets upon death. It is recognized as an essential part of any estate plan.
  • Powers of Attorney:
    • Personal Care (Living Will/Health Care Directive) is the appointment of an individual to make health care and personal decisions in the event of the incapacity by the grantor.
    • Property is the appointment of a personal representative to act on behalf of a grantor in cases dealing with finance, where they are unable. This appointment can be quite broad when dealing with financial matters or it can be limited to a specific transaction.

Review your Estate Plan

Life is ever changing; marital status, occupation, the birth or adoption of a child, moving, or the start up of a new business. All events will have an impact on your estate plan and require the need for a regular review.

Education Planning

Financing an education can be an overwhelming task, but ECU Wealth Management is here to help. For the past five years, university tuition fees have increased at a national average of almost nine per cent a year. In efforts to help students pay for their education, the federal government has been giving away free money through the Canada Education Savings Grant (CESG).

When you set up an RESP to save money for your child's education, your deposits and their earnings are used for your child's tuition and living expenses. As of 2007, there is no annual limit for contributions to RESPs. The lifetime limit on the amount that can be contributed to all RESPs for each beneficiary is $50,000.

No matter what your family income is, Human Resources and Social Development Canada (HRSDC) pays a basic CESG of 20% of annual contributions you make to all eligible RESPs for a qualifying beneficiary to a maximum CESG of $500 in respect of each beneficiary ($1,000 in CESG if there is unused grant room from a previous year), and a lifetime limit of $7,200.

Beneficiaries with an RESP aged 16 and 17 will be eligible only if at least one of the following conditions is met:

  • A minimum of $2,000 of contributions has been made to, and not withdrawn from, RESPs in respect of the beneficiary before the year in which the beneficiary attains 16 years of age; or
  • A minimum of $100 in annual contributions has been made to, and not withdrawn from, RESPs in respect of the beneficiary in at least any four years before the year in which the beneficiary attains 16 years of age.

This means that you must start to save in RESPs for your child before the end of the calendar year in which they turn 15 years of age in order to be eligible for the grant.  When you open a RESP, you decide what level of involvement you would like in the investment decision making process. Potential investments may include:

  • Cash
  • Canadian stock*
  • Foreign stock*
  • Mutual funds*
  • Guaranteed Investment Certificates (GICs)
  • Corporate and/or Government bonds

In the RESP, you decide when and how much you want to contribute to the plan, providing you stay under the lifetime limits. You can pay lump sums whenever you want, or you can create a payment schedule.

If your plan has good growth, your child could pay for tuition with the grant money and the earnings of your investment. You could take out your deposits tax-free.

A subscriber is not restricted in choosing a beneficiary for an RESP, however, in a family plan, each beneficiary must meet both of the following conditions:

  •  The beneficiary must be connected by blood relationship or adoption to each living subscriber, or have been similarly connected to a deceased original subscriber; and
  • The beneficiary must not have reached 21 years of age when he or she is named and contributions are made in the plan for his benefits. In the case of a transfer from one family plan to another, and if the beneficiary is 21 years of age or older, the beneficiary must have been a beneficiary under the old plan.

A qualifying educational program is an educational program which lasts at least three consecutive weeks, and which requires a student to spend no less than 10 hours per week on courses or work in the program.

A post-secondary educational institution includes:

  • A university, college, or other designated educational institution in Canada;
  • An educational institution in Canada certified by the Minister of Human Resources Development Canada as offering non-credit courses that develop or improve skills in an occupation; and
  • A university, college, or other educational institution outside Canada that has courses at the post-secondary school level, as long as the student is enrolled in a course that lasts at least 13 consecutive weeks.

Here are some alternatives should your beneficiary does not go to school:

  • You may wish to leave money in the plan for a few years in case the beneficiary changes his or her mind, if the plan allows you to do this;
  • You may name a new beneficiary;
  • You may use the  Accumulated Income Payment (AIP) route if the following conditions are met:
    • the beneficiary is at least 21 years of age,
    • the plan has been in existence for at least 10 years, and there are no other eligible beneficiaries, and
    • the subscriber is a resident of Canada.

The RESP earnings can be paid out to a subscriber in the form of an Accumulated Income Payment (AIP).

The assets of an RESP can only be used for the following purposes:

  • The payment of educational assistance payments;
  • The payment after 1997 of accumulated income payments;
  • The refund of Canadian Education Savings Grant to the Department of Human Resources;
  • A payment to a designated educational institution; or
  • A transfer to another RESP.

*Mutual funds are offered through Credential Asset Management Inc. Mutual funds and other securities are offered through Credential Securities Inc. Credential Securities Inc. is a Member of the Canadian Investor Protection Fund.

 

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