How to Be Prepared When the Unexpected Happens

Health is Wealth

More often than not, we take our health for granted…up until we fall sick. From minor health problems to a life-changing crisis, your overall financial well-being could be at risk. There could be extenuating circumstances causing you to miss work, or you might need extra help at home, with your children and then there’s always the cost of prescription drugs or medical equipment, and much more.

Sadly, many people find themselves dipping into their savings or having to borrow money. This has a direct effect on your financial security for the future. If it is a critical illness or a permanently disabled situation, then the impact is intensified. To help prevent the financial effects due to a health crisis, remember to have these four tips.

Tip #1

Be aware of what benefits you have and when you can gain access to them. Perhaps you have benefits through your employer, or benefits from a specific insurance  policy or lastly, the Canada Pension Plan Disability Benefits for yourself and family.

Tip #2

Be careful with your withdrawals because not all are the same. For example, you don’t pay tax when you withdraw from a Tax-Free Savings Account (TFSA) or your bank account. However, if taking money out of your Registered Retirement Savings Plan (RRSP) the government will withhold a portion for tax-purposes. You also may end up paying tax when you sell one of your investments to take money from a non-registered account. Always consider in the beginning what investments sound right for you should you ever need to make withdrawals to pay for expenses due to illnesses or disability.

Tip #3

Be very careful if you’re going to borrow. We all know debt can spiral out of control very quickly. Always make sure to look for options that have a low interest rate and are flexible with their repayment plans. This could include a secured line of credit (attached to your property), or an unsecured line of credit and then finally, a personal loan. Never use your credit cards as most of them come with high interest rates.

Tip #4

Think about the future. It’s worth noting that people with disabilities  may be able to open a Registered Disability Savings Plan (RDSP) and therefore be allowed to access funds (grants or bonds) that can help you save for your potential future financial needs.

Always think about protecting your lifestyle and savings. Speak to a financial advisor who can help you determine your options and help you come up with the best solutions for potential health crisis events.

Don’t let a disability or illness clip your wings

Travelling is one of the greatest joys of life. Yet if you have a serious illness or a disability, the prospect of leaving home and “seeing the world”, can be overwhelming and worrisome. Make sure to follow these 5 suggestions to prepare yourself for travel.

1. Make an appointment with your doctor. It may sound routine, but it’s advisable to talk to your doctor anywhere from 4 to 6 weeks prior to your departure. Your doctor will be able to assess your health, update your prescriptions, and discuss with you if you are fit to travel. If a note is prescribed, you will find that helpful when it comes time to cross borders.
2. Packing medications. Always take your prescriptions as a carry-on – being sure to follow airline regulations – so you have your medications handy at all times.
3. Booking flights and hotels. It’s important to mention your accessibility needs. Most airlines are very accommodating to these requests. Whereas hotels, they have varying degrees of access. It’s important to be clear about what you need upon arrival.
4. Research Research. It must be said that research for your trip doesn’t stop at hotels and airlines. Always check out the neighbourhood you’ll be staying in and the local sites you want to see. Make sure the locations are easy to access (e.g. Is the location situated on a steep hill with no transportation?) Use the online tools available so you can be fully prepared with your expectations well in advance.
5. Travel Insurance is critical. To travel without insurance is just a bad situation waiting to happen. You should always have trip cancellation insurance (you can get the cost of your trip refunded should an illness force you to cancel at the last minute). Ensure you have travel health insurance which covers all medical expenses in other countries if needed. Lastly, medical evacuation insurance includes transportation by road or air to appropriate medical care (e.g. If you are climbing Mt. Everest and need to get to the ground for help).

As an added bit of homework, it’s advisable to keep these tips top-of-mind for your travels:

1. Sign up for the tour. More tour operators these days specifically cater to people with disabilities. Take advantage of services that are geared towards your needs.
2. Don’t rush. Although you may have a jam-packed itinerary, don’t try to do everything in one day. Pay attention to your body and listen to it when it’s time to rest.

Positivity goes a long way. Don’t let a disability or an illness get in your way from seeing everything you want or going everywhere you have dreamed. Remember though that some places are better equipped to accommodate visitors with different degrees of needs. Always remember to focus on what you CAN do on your trip, instead of what you can’t. To improve upon something, it never hurts to offer suggestions or feedback to your hosts along the way. You could be helping someone else down the line.

Healthy living includes healthy finances 

We all know exercise can enhance your productivity, but did you know that productivity can enhance your finances?! Physical activity has long been associated with benefits such as preventing heart disease, Type 2 diabetes, and cancer. It also improves your strength and balance, so we continue to stay independent as we grow older. Also, physical activity promotes children’s healthy development and growth.

What is new about the benefits of exercise is that it also improves concentration, sharpens the memory, helps us to grasp and learn quicker, remain focused longer, improves one’s creativity, reduces stress levels and ultimately, the best benefit, makes us happier.

Each of those benefits can also contribute to our productivity at our workplace. It is a fact that more productive employees are the ones often rewarded by pay raises, bonuses or promotions. It is also true that business owners may find they gain more clients and see their company growing faster. Exercise has many benefits to it and it also plays a role in having confidence in your plan for a financially dependable future.

Finding the time to exercise can be a challenge. A recent McMaster University study found that one highly intense minute of exercise a day generated “significant” health benefits. However, more often than not, you find yourself being pulled in many directions and rigid exercise regimes get pushed aside. The easiest by far is full-out, highly intense 60 seconds, yet if you don’t want to go full-tilt for that one minute, you can try these simple tricks:

1. The bicep curl: Put a heavy book into each hand and lift your arms slowly while your elbows remain close to your side. Repeat this up and down motion 15-20 times.
2. The tricep desk dip: Stand facing away from a well-fortified object (like a desk or table) with your palms on the edge. Begin to lower your body until your elbows are at 90 degrees then push yourself back up slowly until your arms are once again straight. Repeat this motion 15-20 times.
3. Sit at the wall: Most of us have seen this one before, lean yourself up against a wall making sure your knees are at 90 degrees, and hold for 60 seconds.
4. Sitting leg raise: While seated, raise one or both of your legs and hold for 5-10 seconds. To increase the intensity, loop a purse or briefcase over your ankles. Repeat this step 12-15 times.

It doesn’t take huge leaps and bounds to create change, even small changes that incorporate some exercise into your daily routine can have a positive impact on your health, and your wealth.

Always check with your doctor first before beginning any fitness program.

Happy trails made of paper

You think you’re the most organized person on the planet, with some kind of filing system created for all your important papers. However, would someone else be able to find your paperwork if something were to happen to you? What if you are injured, or tragically die, will your family and chosen executor of your Will be able to find the important documents quickly?

It’s worth creating a binder or a master folder that holds your important documents. Store this in a safe place but make sure to tell your loved ones/executor where they can find it. The following is a list of what documents to keep organized together and all in one place:

1. Legal documents:
   1. Your Will
   2. Any Powers of Attorney (these provide instructions on how to manage your finances, health care and end of life decisions)
   3. Trust Funds
   4. Your Birth Certificate
   5. Your Marriage Certificate
   6. Divorce Certificate
2. Personal Finances related documents:
   1. Bank account statements
   2. Loan statements:
      1. Mortgage(s)
      2. Lines of credit
      3. Loans
      4. Credit cards
   3. Investment account statements:                                                             
      1. Non-registered accounts (open)
      2. RRSP’s (Registered retirement savings plans)
      3. RRIF’s (Registered retirement income funds)
      4. TFSA’s (Tax-Free Savings accounts)
      5. (Registered education savings plans)
   4. Insurance Policy contracts:
      1. Life
      2. Disability
      3. Critical Illness
      4. Long-term care
      5. Health and dental
      6. Home
      7. Auto
      8. Personal accident
      9. Hospitalization
   5. Company pension documents
   6. Income Tax: Notices of assessment for recent years
   7. Miscellaneous information:
      1. Funeral/burial directions
      2. Business documents (if you own or co-own)
      3. Real estate deeds
      4. List of jewellery, art, and other valuables
      5. Contact information for your professional advisors (i.e. Financial Advisor, Accountant, and Lawyer)
   8. Storing these documents. Once you’ve organized all this information into files, you can store it either in a:
      1. Safety deposit box (highly secure but hard to get at)
      2. Filing cabinet (not secure but easy to access)
      3. Home safe (relatively secure and accessible)

Remember, you must make sure you tell your executor and family where, and of course how, to access these important documents. Organizing your estate paperwork like this will simplify things for your loved ones and your executor. It also ensures that no assets of yours are overlooked and your beneficiaries will receive the full legacy/inheritance you wanted.

Navigating the choices of beneficiary planning

Beneficiary planning is something many of us will face at one point in our lives. We are presented the opportunity to name our beneficiaries when signing up for a new insurance policy, retirement planning, estate planning, or preparing any assets that would impact your loved ones after you’re gone.

Having a plan in place for your family relieves some burden, should something ever happen. However, naming a beneficiary for yourself is something most Canadians often don’t consider with proper due diligence. This is a decision that will have a direct impact on your loved ones, and those who would benefit from your assets, so it is important to always carefully consider the following options:

Taxes may applicable

Estate taxes and rules differ between provinces. It is important to consult a professional tax advisor when planning your estate and naming a beneficiary in order to avoid unnecessary tax consequences.

Not naming a beneficiary

Without naming a beneficiary, your assets will often be subject to probate when you pass away. This may also mean your assets are subject to taxes that may have otherwise been avoided.

Naming a single beneficiary 

Naming only 1 beneficiary relies on the assumption that this individual will outlive you. Should this not be the case, a judge will decide how your assets are distributed. We always recommend naming a contingent beneficiary or multiple beneficiaries to avoid this.

Naming minors 

We suggest directing your assets into a trust for any minor beneficiaries you name. If you do not specify how the money or assets are managed, a judge will name someone to manage them.

Naming a beneficiary with special needs

Much like naming a minor, we recommend directing your assets to a trust for your beneficiary. If you name this beneficiary directly, you may unintentionally be disqualifying them from the government assistance programs & benefits they rely on.

Spousal rights when naming a beneficiary

In Ontario, and the other community property provinces of Alberta & Quebec, you must have your spouse sign a waiver if you intend to name someone other then them as your beneficiary.  Failing to do so may disqualify your beneficiary from receiving your assets.

Naming beneficiaries using non-specific titles

By this, we mean naming your beneficiaries using titles such as “my family” or “my kids”. This can lead to complications in defining who falls under these titles and who would be entitled to your assets. It is always better to be as specific as possible when naming your beneficiary/beneficiaries.

Keep your beneficiary form up to date

It is vital to ensure your beneficiary forms are up to date, especially after a substantial life change such as a change of employment, marital status, etc. Failing to keep up to date forms may result in someone you did not intend becoming the recipient of your assets.

Keep your beneficiary documents in a safe place

Upon your passing, it is important to have the documents proving your beneficiaries accessible to the appropriate parties. Without the correct documents available, your assets will be directed to your default beneficiary. For example, should you name your spouse as beneficiary for your insurance but the paper specifying this is unavailable, the insurance will be directed to the default on your insurance form (i.e. whoever is on file with your insurance company). To avoid conflict over your beneficiary recipients, always ensure you have your documents kept in a safe, accessible place and the information is up to date.