Recommendations

For: Yates
Asset Allocation
Recommendations

• When you filled out the investor profile questionnaire, you indicated that you were an investor
with a moderate conservative tolerance for risk.
• The Asset Allocation of a moderate conservative portfolio is as follows:

Asset Class Weighting

Cash Equivalents 5%
Canadian Bonds 46%
Global Bonds 9%
Canadian Large Cap Equity 12%
Canadian Small Cap Equity 3%
US Equity 13%
International Equity 9%
Emerging Markets Equity 3%
Total 100%

Net Worth
Recommendations

To maintain and ideally grow your assets, in addition to meeting your goals, some new accounts will
need to be set up.

The new accounts are as follows:

• Open up a RESP for Garrett to save for his education.

• Open a non-registered account – Retirement Investment Fund to accumulate additional
surplus savings.

Cash Flow
Recommendations

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Over the next few years, you have big cashflow deficits because of the mortgage and daycare. You also
have a big car expense coming up.

We recommend that you sell the city car because it will

• Reduce debt: Selling the car will allow you to pay off the car loan, which has a 7% interest rate.
This will help you save on interest payments and reduce your overall debt.
• Lower monthly expenses: With the car loan paid off, your monthly payment of $576.30 will be
eliminated, increasing your monthly cash flow. This additional cash flow could be directed
towards savings, investments, or other financial goals.

As you pay off your mortgage and you no longer have childcare expenses, your cashflow will open up
and you will start generating surpluses.

You can utilize those surpluses to accumulate in a non-registered investment account that can in turn
be used for retirement, paying for your SUV car purchases in the future.

Tax Details
Recommendations

• Ensure you continue to maximize your RRSP contributions to ensure you’re deferring tax into
retirement.
• When it comes to investing, dividends and capital gains are taxed more favourably than
interest. As a result, investments in equities, specifically dividend paying and growth stocks will
be more tax efficient than investments in bonds or GICs.

Retirement Goal
Recommendations

You would like to retire when Siobhan turns 60 years old and you would like to have $114,713 per year
in today’s dollars to maintain your current lifestyle in retirement.

You’d also like to have an extra $20,000 per year for additional travel

You are currently far away from achieving this goal and it is likely impossible to do so.

To be able to have $114,713 in retirement income and extra $20,000 for additional travel, you will
need:

• Retire when both of you turn 65 and reduce your pre-retirement travel expenses to $2,000 per
year
• Or retire when Siobhan turns 63 and you will need to reduce your pre-retirement travel

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 expenses to $4,000 and post-retirement travel expense to $9,000 per year
• Increase Tyrone’s group RRSP contribution to 5%
• Finance your car with a 5-year loan
• Sell the city car and no longer buy it back
• Any leftover surpluses could be added to your surplus non-registered account

University Education (Garrett)

Recommendations

You would like to fully fund your son’s post-secondary education at a cost of $19,597 a year in today’s
dollars, assuming he goes to school for four years starting when he turns 18.

You currently do not have a RESP set up for your son. However, you have one savings account that is
earmarked for your son’s education purpose. You will need to set up one and add some savings to both
your savings account and RESP.

Savings account

• Add $370 instead of $200 per month to your savings account.

Open a RESP for Garrett

• Deposit $3,500 per year into Garrett’s RESP until 2037.

Insurance planning
Recommendations

We recommend that you buy life insurance and disability insurance

These types of insurance can provide financial protection and peace of mind for you in the event of
unforeseen circumstances

Life Insurance:

• Income replacement: Life insurance can provide a financial safety net for the surviving spouse
and dependents in the event of either Siobhan or Tyrone's passing. The death benefit can
replace lost income, helping you maintain your standard of living.
• Debt repayment: The life insurance payout can be used to pay off outstanding debts, such as the
mortgage or car loan, relieving the surviving spouse and family of these financial burdens.
• Children's education: Life insurance proceeds can be used to fund Garrett's post-secondary

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 education, ensuring that he has the financial resources to pursue his studies even if one of his
parents passes away.

Disability Insurance:

• Income protection: Disability insurance provides a portion of your income if you become unable
to work due to illness or injury. This helps maintain your standard of living and prevents financial
hardship during the period of disability.
• Debt management: The benefits from disability insurance can help cover mortgage payments,
car loans, preventing you from falling behind on your financial obligations.
• Retirement savings: If one of you become disabled and unable to work, the disability insurance
payments can help you continue saving for retirement, ensuring you have financial resources for
your later years.

Estate Planning
Recommendations

We recommend that you update your Will and Power of Attorney.

Wills

• A will is one of the most important documents that you will ever create. It essentially
represents your final wishes with respect to the treatment of your property and dependents
upon your passing. Some of the benefits of creating a Will are as follows:
• A will allows you to choose in advance how you want your property to be distributed. Things
like, your house, your cabin or trailer, you investments, your car, or more personal items like a
special heirloom.
• A will allows you to choose the individual who has the authority to carry out all of the terms of
your will on behalf of you and your estate. The legal term for that individual is executor and so
you’re aware, our next blog post will cover how to choose the right person for that very
important task.
• A Will allows you to choose guardians to look after your minor children. It also allows you to
set up special provisions for them which might lessen the burden on that guardian who must
take on a very significant personal and financial responsibility.
• A will also allows you to create special bequests for people, charities, or other institutions (like
your church for example), who would not otherwise have been legally eligible to receive any
property upon your passing. But what if you choose to not get your Will completed?
• If you pass away without one, you will have been considered to have died intestate. When this
occurs, you give up your power to choose how your estate gets distributed. That will be

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 decided by the laws and the courts of the province in which you reside. By taking this route,
some challenges may arise.
• First of all, you forgo the opportunity to decide how your property is to be disposed of. The
laws of each province have a set formula for estate distribution when someone dies
intestate.
• Then there is the issue of minor children. If you don’t choose a legal guardian for them through
your Will, the courts will decide their guardian on your behalf, which may an individual that you
would not have selected.
• If nothing else, passing away intestate may force the people that you love and care about
into a potentially costly and time-consuming legal process that could have been avoided.
Without a will, no one will have authority to handle the estate until appointed by the
courts. The province simply steps in and controls the distribution of your estate according
to the intestate laws of the province, without regard to the wishes you may have had, but
failed to define in legal form.
• Assuming that you have created a Will, under what circumstances would you consider
reviewing or potentially altering it and what does that process look like?
• For the most part, your Will should be updated after significant events in your life take
place. If you recently got married, divorced, had a child, or lost a spouse then you should
have your wills reviewed and updated. These are the obvious ones. Less obvious ones
might depend on your circumstances. As an example, let’s assume you’ve named your
spouse as executor of your will, and he’s showing signs of dementia. That unfortunate
challenge would be a
• catalyst to redo a Will. Other examples might relate to a child who develops a drug
addiction and can’t manage money, or a situation where you experience a significant
change to your financial situation (either positively or negatively).

Powers of Attorney

• Very simply, a power of attorney is a legal document that gives someone else the right to
act on your behalf. This “attorney” that you give power to does not have to be a lawyer.
They can be a person or a corporation such as a trust company. A power of attorney needs
to be signed and witnessed by two individuals to become valid. Your spouse and children
are not allowed to act as witnesses.
• There are two types of powers of attorney:
o The first is the power of attorney for property, also called a financial power of
attorney. It is used to address your financial affairs, and grants your attorney the
authority to act on your behalf. Even if you become mentally incapable, your
attorney will still have the ability to transact on your behalf.
o The second type of power of attorney is the power of attorney for personal care, and
it is used so that housing and healthcare decisions can be made should you become
mentally incapable to make them yourself. Occasionally this type of power of

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 attorney is called a “living will”; however, this isn’t entirely accurate. Whereas a
power of attorney is a legal document where you grant someone the authority to
act on your behalf, a “living will” represents your actual wishes for special medical
situations. An example would be, whether or not you wish to be resuscitated
should you be in a coma that you will not recover from. Often times, your living will
or “advance directive” as it is also called, are written directly into your power of
attorney document.
• So who should you name as your power of attorney? The only true stipulation in naming a
power of attorney is that they must have reached the age of majority as defined by each
province. Other than that, anyone can be named and typically most people chose their
spouse, friend, or another family member. Beyond that, here are some points to consider:
o Are they financially knowledgeable?
o Where do they live? Are they far away? Would managing your affairs be easy for
them given their location?
o If you’re thinking of naming family or friends, will they be objective or will bias
potentially cloud their judgement?
o Should you consider a trust company as power of attorney as an objective
alternative?
• The power of attorney is a powerful document. Once granted, your attorney has the ability
to transact on your behalf, including conducting business that you may or may not agree
with. It is possible that they might not act in your best interest, or they could simply
mismanage your affairs. On the other hand, you can utilize the power of attorney to limit
and formalize the attorney’s responsibilities. This protects your finances from an attorney
who decides to misuse their authority that may in the long run, harm you or others that
you care about (for example, your heirs).
• A Power of attorney does not have to be permanent. They can be created to span various
periods of time (like while you’re away on a business trip or vacation). They can also, as
previously mentioned, have limits in the scope of authority (for example, restricting the
attorney to only cover certain responsibilities – like bill payments). You can create them to
become effective, or “spring” upon some event of your choosing or on the date that you
become incapacitated. You can also create them to be either “continuing” or “non-
continuing” upon the date that you are no longer legally competent.
• Regardless, it is an important document should you wish your affairs to be managed
according to your wishes while you are still living, but unable manage them yourself.
• When considering your estate plan, developing a contingency plan for incapacity while still
alive is of crucial importance to the success of your overall financial affairs. That
contingency plan can be addressed by creating powers of attorney for both property and
personal care. Similar to will preparation, we recommend you go and speak to a reputable
family lawyer. There is little to gain but much to lose should errors be made in do-it-
yourself documents. Their expertise can go a long way in ensuring that your wishes are
acted upon.

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Choosing Your Executor

• The responsibilities of the executor can be quite detailed and complex. Duties will include,
but are not limited to:
o Locating and reviewing the will
o Gaining an understanding of the deceased’s financial situation
o Potentially assisting with funeral arrangements
o Ensuring that there’s adequate insurance in place to protect assets
o Cancelling subscriptions and re-directing mail
o Notifying banks, investments firms etc., where the deceased had dealings.
o Making claims for life insurance and company and government pension plans
o Valuing, managing, and collecting income from investments
o Valuing real estate, and other assets
o Obtaining probate
o Closing accounts, selling real estate, and preparing tax returns
o Distributing the estate according to the will’s instructions.

• Considering these responsibilities, who should you name as your executor?

• In many ways, your executor needs to be part accountant, part lawyer, and potentially part
family counsellor. Since it’s impossible to be all these things, their most important attribute
might be their ability to use “common sense” and know when and where to ask for
professional help. In addition, consider the following:
o Do they understand what it means to be an executor?
o How old is the individual you’re considering to be your executor?
o If they’re the same age as you are, and you’re getting elderly, you should be
prepared to make changes to your will to find someone who is younger.
o If you’re appointing children as executor(s), consider their ability to do the job, and if
naming one child over other children will cause family strife.
o Communicate your intentions to your executor and family well in advance because
his or her identity should not come as a surprise on the day that you pass away.
o Keep your will up to date and keep your executor informed when you make changes.
o If you’re not sure of who to appoint as your executor, get advice from a family
practice lawyer who specializes in estate planning. You may find that it makes
sense to appoint a professional corporate trustee. As with all other wealth
management strategies, open and early communication is the simplest and truest
path towards success. Having a well informed and knowledgeable executor, who
understands you, your wishes, and their obligations, should provide you with a
great deal of comfort that your wishes will be acted upon with minimal disruption
to the lives of those you care about.

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Important: The calculations or other information generated by NaviPlan® version 22.5 regarding the likelihood of various investment outcomes are hypothetical in
nature, do not reflect actual investment results, and are not guarantees of future results. These calculations are shown for illustrative purposes only because they
utilize return data that may not include fees or operating expenses, and are not available for investment. If included, fees and other operating expenses would
materially reduce these calculations.

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