Stressed-out working CDN’s want to invest in themselves but can’t afford it

Working Canadians are stressed. According to a recent TD survey, two thirds say they experience moderate to high levels of stress at their job. An overwhelming majority of them (95 per cent) consider it important to invest in themselves, but over half (53 per cent) don’t do it as frequently as they’d like.

Canadians working in health care and social assistance, or finance, insurance and real estate are more likely than average to say they experience high or moderate levels of stress at their job. While it’s clear working Canadians want to devote time to themselves, two thirds (67 per cent) of those who don’t invest in themselves as much as they’d like to say they don’t because they can’t afford it. Furthermore, 82 per cent of working Canadians said they would invest in themselves more if they had the financial resources to do so.

“Canadians recognize the importance of taking a break and doing something good for themselves, but often don’t because of the associated cost,” says Jennifer Diplock, Associate Vice President, Personal Savings and Investing, TD Canada Trust. “It’s important to strike a balance in life, and one way to do that is for Canadians to view these expenses as an investment in their well-being.”

While investing in yourself can mean something different to everyone, most working Canadians (81 per cent) say they’d prefer to take a vacation. Millennials, however, are more likely than average to want to start or continue a hobby (54 per cent), further their education (29 per cent) or start a new business or side hustle (17 per cent). Ideally, three quarters of working Canadians (74 per cent) would invest in themselves a minimum of twice per year, and say their top motivators are relaxation (66 per cent), refreshing themselves (62 per cent) and improving their mental health (49 per cent).

“Whichever way you choose to find balance in the daily grind, whether it’s a family vacation or starting a new hobby, investing in yourself doesn’t have to break the bank,” says Diplock. “It’s about setting a goal and managing your savings to ensure you have enough to refresh and re-energize yourself. Try setting up a “me” fund and make regular contributions or, if you will receive a tax refund, use it as a starting point to help you achieve your goals.”

For those looking to strike a balance in life, TD offers the following tips on how to help invest in yourself:

  • Find your passion: Life should be about more than just work, we need play too. Think about the activities you love doing and schedule time in your calendar to do them weekly or monthly. Don’t know what your passion is? Experiment by trying new classes, joining a new team or rec league, or organizing a group of friends to try new activities.
  • Use your tax refund: If you’re fortunate enough to receive a tax refund this year, like the 54 per cent of Canadians who expect to2, why not use it to invest in yourself? Taking a vacation or going back to school can be expensive, but your tax refund can help provide the start you need. For short-term savings goals, consider investing in a safe but flexible product with a guaranteed rate, like Cashable GICs at TD, which will help you achieve your saving and investing goals, or reach your goals faster with a TD High Interest Savings Account, which can help encourage you to save more.
  • Take a staycation: You don’t have to leave the country to experience a relaxing vacation. Plan a vacation closer to home to do the things you’ve always wanted to do but have never gotten around to. For example, book a relaxing afternoon at a local spa, have a leisurely lunch at your favourite restaurant or explore the latest buzzed-about art exhibit. Plus, staying close to home can be a more affordable option if you’re looking for something to help fit within your broader strategy.
  • Start a “me” fund: Investing in yourself should be treated like other items you’re saving for, like a car or new computer. Open a Tax-Free Savings Account that can help build your savings faster with tax-free growth and contribute to it regularly3. You can also set up automatic transfers using any one of TD’s Automated Savings Optionsto help you reach your savings goals sooner.

For more information, please visit www.tdcanadatrust.com.

Crawford Forensic Accounting Services Launches an Online Business Interruption Calculator

Crawford & Company (Canada) Inc. today announced the launch of an online simple loss calculator as an enhancement to its Crawford Forensic Accounting Service offering. Coupling technological innovation with the company’s forensic accounting and claims management expertise, this loss calculator was developed to assist in the management of business interruption losses. By design, the loss calculator is tailored towards retail and wholesale business interruption claims where the loss duration is 14 days or less.

“As a claims and risk management firm we are committed to simplifying and expediting the claims cycle by developing and investing in innovative technology and tools, and leveraging appropriate experts,” said Paul Hancock, vice president, Global Technical Services (GTS) Canada, Crawford & Company (Canada) Inc. “This tool was designed to assist our clients and the marketplace in determining the initial extent of a business interruption loss, set reserves, and map out an appropriate course of action.”

For risk management purposes, Crawford’s loss calculator can assist in managing the impact of business interruption losses by requesting initial information required to take appropriate action. The calculator is easy to use. It consists of a five-step process, with prompts, that directs users through each step to help ensure that all the necessary information is captured.

Across all of its global service lines, Crawford is building industry solutions and this loss calculator is one more addition to its product suite.

Crawford’s mission is to restore and enhance lives, businesses and communities,” said Pat Van Bakel, president & chief executive officer, Crawford & Company (Canada) Inc. “This calculator helps to accelerate the claims process, helping businesses to recover and return to normal business operations quickly.”

About Crawford®

Based in Atlanta, Crawford & Company (NYSE: CRD‐A and CRD‐B) is the world’s largest publicly listed independent provider of claims management solutions to insurance companies and self‐insured entities with an expansive global network serving clients in more than 70 countries. The Company’s two classes of stock are substantially identical, except with respect to voting rights and the Company’s ability to pay greater cash dividends on the non-voting Class A Common Stock (CRD-A) than on the voting Class B Common Stock (CRD-B), subject to certain limitations. In addition, with respect to mergers or similar transactions, holders of CRD-A must receive the same type and amount of consideration as holders of CRD-B, unless different consideration is approved by the holders of 75% of CRD-A, voting as a class. More information is available at www.crawfordandcompany.com.

SOURCE Crawford & Company (Canada) Inc.

IBC welcomes the creation of expert panel on sustainable finance

Today, the federal government announced that it will create the Sustainable Finance Expert Panel, which will consult with Canada’s business leaders, including insurers, on opportunities related to sustainable finance, including climate-related disclosures.

The Expert Panel builds on the work of the Task Force on Climate-related Financial Disclosures (TCDF), led by Michael Bloomberg, that was established by the Financial Stability Board and chaired by Governor of the Bank of England Mark Carney. The Task Force is recognized worldwide for its ground-breaking work to develop voluntary recommendations on climate-related information that companies can disclose to help investors, lenders, and others make sound financial decisions.

IBC and several insurer CEOs attended a round table with the Minister of Environment, the Honourable Catherine Mckenna, the Minister Finance, the Honourable Bill Morneau and Governor of the Bank of England Mark Carney. The industry encouraged the government to focus its efforts on climate change adaptation. Following the roundtable, the government announced the creation of the expert panel.

“Investors require a financial framework that lowers our risk in an era of unpredictable climate change,” said Don Forgeron, President & CEO, IBC. “IBC and its members have advocated for and welcome the development of a sustainable financial framework, which will be instrumental in transitioning Canada to a low carbon economy.”

About Insurance Bureau of Canada
Insurance Bureau of Canada (IBC) is the national industry association representing Canada’s private home, auto and business insurers. Its member companies make up 90% of the property and casualty (P&C) insurance market in Canada. For more than 50 years, IBC has worked with governments across the country to help make affordable home, auto and business insurance available for all Canadians. IBC supports the vision of consumers and governments trusting, valuing and supporting the private P&C insurance industry. It champions key issues and helps educate consumers on how best to protect their homes, cars, businesses and properties.

P&C insurance touches the lives of nearly every Canadian and plays a critical role in keeping businesses safe and the Canadian economy strong. It employs more than 120,000 Canadians, pays $8.2 billion in taxes and has a total premium base of $52 billion.

For media releases and more information, visit IBC’s Media Centre at www.ibc.ca. Follow IBC on Twitter @InsuranceBureau and like us on Facebook. If you have a question about home, auto or business insurance, contact IBC’s Consumer Information Centre at 1-844-2ask-IBC.

If you require more information, IBC spokespeople are available to discuss the details in this media release.

SOURCE Insurance Bureau of Canada

For further information: To schedule an interview, please contact: Steve Kee, Director, Media & Digital Communications, IBC, 416-362-2031 ext. 4387, 416-841-5669, skee@ibc.ca

Related Links

http://www.ibc.ca

Organization Profile

Insurance Bureau of Canada

Insurance Bureau of Canada is the national industry association representing Canada’s private home, car and business insurers. Its member companies represent 90% of the property and casualty (P&C) insurance market in Canada. The P&C insurance industry employs over 114,000 Canadians, pays more than $7 billion in taxes to the federal, provincial and municipal governments, and has a total…

Doing taxes used to be an even bigger pain

By Shirley Tillotson, Inglis Professor at University of King’s College, Professor of Canadian History (Dalhousie University, retired), Dalhousie University

THE CANADIAN PRESS

This article was originally published on The Conversation, an independent and nonprofit source of news, analysis and commentary from academic experts. Disclosure information is available on the original site.

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Author: Shirley Tillotson, Inglis Professor at University of King’s College, Professor of Canadian History (Dalhousie University, retired), Dalhousie University

If your income is mainly a paycheque, filing a Canadian income tax return these days is pretty easy. And that’s no accident.

Smart innovations in tax administration in the 1950s built a slick collection system that worked. Except, of course, for small business. And, for the moment, let’s not speak of the many avenues of escape that capital income has enjoyed.

But taxing employees? We figured out how to do that pretty painlessly almost 70 years ago. Surely we can do the same for more tax filers today.

When federal taxation of wages and small salaries was launched during the Second World War, there was incomprehension, chaos and widespread resentment. Tax protest was part of several strikes by organized labour in 1941 and 1942. Non-union workers refused overtime for tax reasons, a real problem for wartime industries.

The new income tax law left lower-income workers no wiggle room in their household budgets.

My book, “Give and Take: The Citizen-Taxpayer and the Rise of Canadian Democracy,” contains examples of protest letters that poured in to the federal Finance Department from people like Miss W.E. Drummond. She was a white-collar employee earning a decent wage. She detailed every item in her weekly budget and asked: “What am I to do, drop this Insurance for my old age? Let my home people starve or go on relief?”

Tax forms were nightmarish

To complaints like hers, James Lorimer Ilsley, then the finance minister, responded with concessions such as allowing a tax credit for some insurance premiums.

But concessions made another tax problem worse: The forms. Their format was unchanged from the 1920s and 1930s, when federal income taxpayers were mostly professional men or business owners. Expressed in dense legalese, they were typeset mostly in six and seven point. If Miss Drummond wanted to know whether her insurance payments were deductible, she had to wade through 111 words of lawyer-ly instruction, 62 of them in tiny print, the rest of them smaller.

Confronted with these forms, semi-literate fishermen in coastal British Columbia and barely educated millworkers in New Brunswick (or their often equally ill-equipped employers) struggled to understand tax terms like “married status.”

“Married status” would lower their taxes, and unmarried people could claim it. But first they’d have to figure out if they and a “wholly dependent relative” lived in a “self-contained domestic establishment… containing at least two bedrooms in which residence amongst other things the taxpayer as a general rule sleeps and has his meals prepared and served.” And served?!

‘Tax conscious’

Dreadfully inaccessible forms were not the only source of pain for wage-earning taxpayers.

Some people thought that paying income tax was meant to hurt, at least a little.

Former Prime Minister Arthur Meighen made this view clear in the 1939 Senate debate on war income taxation. Exemption levels should be so low that almost every earner would be an income taxpayer. Only if they personally felt a pinch in the pocketbook would voters be “tax conscious.” Only then would they care about “preventing waste in government.”

Meighen’s wish came true. Not only did the wartime government lower exemptions in 1941, and drastically so in 1942, they also told the nation’s payroll clerks to clip from paycheques only 95 per cent of the amount that would likely show up in employees’ year-end calculations of tax payable.

That way, at tax filing time, most employees would still owe income tax, beyond what the payroll clerk had been collecting all year. Pretty much everyone working for a wage would have to actually fork over some cash with their return.

To be fair, this was a way of avoiding any risk of over-deducting. But it also made taxpayers feel the pain of payment _ to good moral effect, some thought.

Debts went unpaid

By 1951, however, tax administrators had discovered a downside to this exercise in moral instruction. Every year, hundreds of thousands of small tax liabilities went unpaid. Collecting those debts placed the federal government in the role of big, bad collection agency garnishing some pretty small wages.

The solution: Abandon the practice of payroll clerks collecting throughout the year only 95 per cent of tax owing. Tell them to deduct 100 per cent instead.

No more making tax debtors out of struggling wage earners. Instead, most employee tax returns would produce _ yippee! _ a refund.

In the spring of 1952, Canadians rushed enthusiastically to file their tax returns (or so it was reported in the Toronto Daily Star).

But the Globe and Mail’s editors took a darker view. The revenue authority was collecting more tax than was owed. The collections were therefore “illegal,” “contrary to the principle underlying our constitution,” and “stupid.”

Why “stupid?” As the editors of the Winnipeg Tribune argued, if taxpayers didn’t actually pay cash at tax time, they might forget that “government was spending a great deal of money.” They’d no longer be tax conscious.

Built revenue for pensions and medicare

For the remainder of the Liberals’ term under Louis St. Laurent, opposition members like Waldo Monteith pushed this point. But the system continued. It built revenue for the welfare state in much the same way that personal savings build when you set up a monthly deduction.

The over-payment method was not the only innovation in tax administration. For the 1948 tax year, a short T1 form was introduced. Pamphlet-sized and legible, it was clearly the work of a skilled designer. Non-lawyers could read it without weeping.

These and other innovations have made reporting income and claiming credits on employment income relatively easy. Perhaps we’re now at the point where many of us the 57 per cent of filers with income primarily from employment would be well-served by a more automated tax assessment. The ritual of completing even a simplified form may be just another exercise in tax consciousness, a flogging of the form-phobic that only inflames anti-tax feeling.

For the other 43 per cent, and especially for small businesses where tax compliance competes painfully with other uses of time and money, the lesson of the 1950s is that tax administration matters. As Canada’s auditor general has recently reminded us, when the revenue agency is underfunded, service shrivels.

We have seen the current government increase CRA funding to improve services to small business in particular and taxpayers generally. It’s too soon to tell (from publicly available information, at least) what impact this will have.

But making employees’ tax compliance easy helped make personal income tax the workhorse of Canada’s taxation system. Now we need to do the same for small business.

We should consider simplifying the law, of course. But even if legal complexity is required for fairness, as it often is, skilled administration can make paying taxes much less painful. And that might protect the revenue  as well as serving the taxpayer.

 

Canada: Creative Uses of Life Insurance, Split Beneficiary Planning – ILScorp.com

3 ways parents can help grown kids own a home

By Marilyn Lewis

THE ASSOCIATED PRESS

When responsible first-time homebuyers need help buying a home, the family bank sometimes can lend a hand.

Younger homebuyers face a mountain of obstacles, including rising home prices and interest rates, too few homes for sale and unpaid college debt. Student debt is a major source of trouble. When the National Association of Realtors surveyed recent homebuyers who had problems saving up a down payment, 53 per cent of those in the youngest group (37 and younger) blamed student loan debt for their difficulty.

Families appear to be pitching in to help, according to the results of that survey in the 2018 NAR Home Buyer and Seller Generational Trends Report. Among homebuyers who made a down payment, 23 per cent of those 37 and younger used a gift and 6 per cent a loan from family or friends the highest proportion for either type of assistance among all age groups.

Family assistance like this works best when the kids qualify for a mortgage on their own and parents make the purchase more affordable with, for example, a bigger down payment or a lower interest rate, says Jeremy Heckman, a certified financial planner with Accredited Investors Wealth Management in Edina, Minnesota.

FIRST, THE GROUND RULES

To create a businesslike distance for these transactions, Heckman suggests that parents:

_ Consider disclosing the assistance to all immediate family

_ Consider treating all siblings equally

_ Use contracts

_ Document gifts

Formal agreements offer important benefits, says San Francisco real estate attorney Andy Sirkin. They define obligations and minimize misunderstandings. And if parent lenders die or become incapacitated, all their heirs can view the transaction and its history.

WAYS TO HELP

Here are three ways parents can help make it more affordable for new homebuyers to purchase a home:

1. GIVE MONEY

A gift of money is often best, Heckman says. Parents can write a check for any amount they choose. That’s it _ no contract or ongoing commitments. Or they can pay all or part of an expense such as mortgage closing costs. Providing down-payment assistance can help new borrowers avoid paying for private mortgage insurance, which helps keep their monthly payment low.

HOW IT WORKS

Strict rules dictate how cash gifts are used in a home purchase, and they vary by mortgage type, lender and lender offer, says Mark Case, a senior vice-president at SunTrust Mortgage.

Lenders like to see money gifts _ easily traceable checks, bank transfers or wire transfers _ in a borrower’s bank account three or four months before applying for a mortgage, Case says. Givers and recipients may need to sign letters confirming that the money isn’t a loan.

When it comes to taxes, anyone can give any other person a gift up to $15,000 in value (money or, say, stocks) in 2018 without filing the gift-tax return IRS Form 709 . So a parent with two children can give each of them _ and even the children’s partners _ up to $15,000 this year without having to complete Form 709. A tax professional can confirm how the rules apply to individuals’ specific circumstances.

2. FINANCE THE MORTGAGE

Parents with cash to invest can become the mortgage lender, offering extra-easy terms, like no closing costs or no down payment. Heckman says they can charge a higher rate of interest on their money than it earns in a savings or money market account and still offer kids a lower-than-market mortgage rate.

“I said, ‘This could be a win-win for both of us,”’ says Jay Weil, an attorney in Wayne, New Jersey. He and his wife, Judy, have financed two mortgages for their son Matt and Matt’s wife, Allison.

HOW IT WORKS

Jay and Judy fully funded the younger couple’s first home, a Columbia, Maryland, townhouse. They decided to use a service that facilitates family loans. They worked with National Family Mortgage, which charges one-time setup fees of $725 to $2,100, depending on the loan size; provides all necessary forms and documents to meet state, local and IRS requirements; guides families through the settlement and filing process; and connects borrowers with loan servicers.

Then in 2017, the Weils lent the kids money again, for a $579,900 house in Laurel, Maryland. Matt and Allison got two loans. One was a primary mortgage from SunTrust Mortgage for $259,900, at 3.875 per cent. His parents provided a second mortgage for $260,000 at 1.98 per cent. They used money earned from the sale of their first home to make a down payment.

Family lenders must charge at least the Applicable Federal Rate , the minimum interest rate required to keep the assistance from being considered a gift.

3. CO-BORROW

Although riskier for parents, co-borrowing is another option. Mortgages with co-borrowers were nearly a quarter of all new-purchase mortgages in the third quarter of 2017, according to ATTOM Data Solutions, a real estate data company.

Co-borrowing helps borrowers overcome a limited credit history or a too-high debt-to-income ratio, says Case, of SunTrust Mortgage.

HOW IT WORKS

Parents apply for the mortgage, too. They must meet the lender’s credit requirements and sign loan papers with their kids at closing.

Aside from the mortgage itself, a separate family contract can define expectations and details such as who gets how much equity when the home sells and what happens in case problems arise, says Sirkin, the real estate attorney.

For parents interested in being co-borrowers, there are some things to keep in mind:

_ Not all loans allow co-borrowers, so it’s good to confirm the option when shopping for mortgages

_ Some lenders may call this step co-signing, which may have different parameters, but the outcome is the same: Parents and children are equally responsible for the loan and any missed mortgage payments

_ Parents’ credit could be affected, making it hard to finance another big purchase later, even if children make payments on time

With all the headwinds facing first-time homebuyers, family help sometimes makes all the difference.

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This article was provided to The Associated Press by the personal finance website NerdWallet. Marilyn Lewis is a writer at NerdWallet.

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