3 money tasks you need to do right now

By Liz Weston

THE ASSOCIATED PRESS

Most financial to-do lists focus on what you need to get done by Dec. 31, but there’s also a brief window early in the new year to save yourself some significant cash. Here are three tasks to consider doing now:

1. AVOID TAX PENALTIES

If you live in a high-tax area, have a bunch of children or otherwise take a lot of deductions, you may face an unpleasant surprise on April 15. It won’t just be a big tax bill. You may also face penalties for not having withheld enough taxes in 2018.

Some people  “are going to be in really sad shape,” says Cari Weston (no relation), director of tax practices and ethics for the American Institute of CPAs .

Taxe experts say many people are still unaware of how many tax rules have changed. Personal exemptions no longer exist, for example, which can be a problem for people with many dependents. People also can only deduct up to $10,000 of state, local and property taxes combined, when there used to be no limit.

Free income tax calculators can help you estimate your tax bill, or you can turn to a tax pro.You may face a penalty essentially interest on the amount you should have paid, but didn’t  if you’ll owe more than $1,000 on April 15 , Weston says. But there may still be time to avoid it.

Most people can dodge the penalty if their withholding in 2018 at least equaled the total tax they owed the year before (that’s the amount shown on line 63 of your 1040 form for 2017). People with adjusted gross incomes over $150,000 must have withheld at least 110 per cent of the previous year’s tax.

Those who withheld too little can still avoid the penalty by making an estimated tax payment by Jan. 15. Instructions are on the IRS’ payment page .

2. CONSIDER FRONT-LOADING YOUR MEDICAL EXPENSES

Scheduling routine health appointments and screenings early in the year helps make sure they get done. You could catch problems before they get bigger and more expensive.

Front-loading your costs can also help if you have big medical expenses later in the year. Most health insurance comes with out-of-pocket maximums, which is the most you’re expected to pay in a year counting copayments, deductibles and coinsurance amounts but not counting premiums. The average out-of-pocket maximum for employer-provided health plans was $3,872 for a single person in 2018, according to the Henry J. Kaiser Family Foundation. Once you hit your plan’s limit, your insurance typically starts picking up the entire bill for medical care for the rest of the year.

If you have a flexible spending account for medical care through your employer, draining it early in the year can be a good plan. Although payments for FSAs are deducted from your paycheque throughout the year, you don’t have to contribute the money before you can spend it, says Sander Domaszewicz , principal at consulting firm Mercer. You can submit claims and be reimbursed for the full amount you’re scheduled to contribute for the year (up to $2,700 in 2019 ) at any time. If you lose your job or quit, you don’t have to pay back the difference between what you’ve contributed and what you’ve spent.

3. SET UP (OR ADJUST) YOUR SAVINGS BUCKETS

“Savings buckets” are savings accounts for a specific purpose, such as vacations, property taxes, life insurance premiums, car repairs and so on. You figure out roughly how much money you’ll need and when, then set up automatic transfers so the money is there when you need it. Having the cash on hand means you don’t have to charge it (and pay high credit card interest rates) or take out expensive loans.

Some people who do this have a single savings account at a traditional bank, using a spreadsheet to keep track of how much has been accumulated for each purpose. But online banks make it easier and more intuitive. These banks typically allow you to set up multiple sub-accounts, with labels you choose, and don’t charge monthly fees or require minimum balances.

If you’re already saving for non-monthly expenses, see if you need to tweak the amounts. Property taxes typically go up every year, for example, but you may have to save less for car repairs if you recently bought a newer vehicle.

A few minutes spent on these chores now could save you money, time and stress throughout 2019.

Sun Life Financial announces appointment of Helena Pagano

Sun Life Financial Inc. (TSX: SLF) (NYSE: SLF) is pleased to announce the appointment of Helena Pagano as Executive Vice-President, Chief Human Resources and Communications Officer, effective June 11, 2018.

Reporting to Dean Connor, President and Chief Executive Officer, Helena is responsible for leading Sun Life’s enterprise-wide human resources and communications strategies, programs and governance. It is a critically important role as we drive for a disproportionate share of top talent, wrapped in a diverse, inclusive and engaging culture.

Helena Pagano (CNW Group/Sun Life Financial Inc.)

“Since joining Sun Life, Helena has had a big impact, enhancing our approach to global wellness, data and analytics, and our employee agile program,” said Dean Connor, President and CEO, Sun Life Financial. “She demonstrates the leadership and forward-thinking that will continue to support our Client For Life strategy and purpose of helping Clients achieve financial security and live healthier lives.”

Helena brings deep global human resources expertise, with more than 20 years in financial services supporting retail and institutional businesses. Prior to joining Sun Life, she held several senior roles in financial services. She joins an Executive Team committed to creating a diverse and inclusive workforce, which includes strong female representation in leadership roles. Helena succeeds Carrie Blair who announced her retirement from Sun Life earlier this year.

Helena is a Board Member of the Artists’ Health Alliance and is a member of the United Way’s Major Individual Giving Cabinet.

About Sun Life Financial

Sun Life Financial is a leading international financial services organization providing insurance, wealth and asset management solutions to individual and corporate Clients. Sun Life Financial has operations in a number of markets worldwide, including Canadathe United States, the United KingdomIrelandHong Kongthe PhilippinesJapanIndonesiaIndiaChinaAustraliaSingaporeVietnamMalaysia and Bermuda. As of March 31, 2018, Sun Life Financial had total assets under management of $979 billion. For more information please visit www.sunlife.com.

Sun Life Financial Inc. trades on the Toronto (TSX), New York (NYSE) and Philippine (PSE) stock exchanges under the ticker symbol SLF.

Note to editors: All figures in Canadian dollars

Media Relations Contact:
Irene Poon
Manager, Media & PR
Corporate Communications
T. 647-256-2596
irene.poon@sunlife.com

Investor Relations Contact:
Greg Dilworth
Vice-President
Investor Relations
T. 416-979-6230
investor.relations@sunlife.com

SOURCE Sun Life Financial Inc.

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.

Bank accounts can be used to teach kids basic financial literacy lessons

By Craig Wong

THE CANADIAN PRESS

OTTAWA _ Omar Abouzaher remembers going to the bank with his daughter so she could make her first deposit into an account that was opened for her when she was just a toddler.

The regional vice-president for the Bank of Montreal’s daughter was four when they took her piggy bank to deposit the coins.

“She’s a banker at heart,” he said.

While RESP accounts can help parents save for a child’s education, opening a savings account for a child can be the first step in teaching basic financial literacy, Abouzaher said.

“I believe sometimes we wait too long until the kids are a bit older and try to cram all this financial information and throw it at them,” he said.

Abouzaher recommends starting with teaching what it means to save and then build on that foundation.

“The older they grow, they’ll understand as well the other components or the other pieces that are maybe a little bit more complex when it comes to understanding debt, understanding what it takes to pay tuition, what it takes to manage your credit,” he said.

Parents hoping to teach their children the power of compound interest on their savings today will have a harder time than parents in the 1970s and 1980s, when interest paid on savings accounts soared above 10 per cent compared with rates today, when even the highest-paying savings accounts sit in the low single digits.

But earning interest isn’t the only reason parents would want to help their children open a bank account of their own.

Abouzaher said children can start to learn the basics of budgeting and saving for something down the road.

Kids can be given a choice, he said, such as, “Do you want to spend it right now and buy whatever you want to buy … or do you want to save it and maybe look at something else in the longer run?”

Parents should keep an eye on fees, just like they would with their own account, or else their children may learn an unwelcome lesson about having a bank account. While accounts for children often do not have a monthly fee, banks may charge for other services such as using a non-bank ATM, depending on where the account is opened.

The amount of interest paid on savings accounts for children also varies by institution. According to rate-tracking website Ratehub.ca, youth accounts at Tangerine, the online bank owned by Scotiabank, pays the highest interest rate for young savers at 1.2 per cent compared with typically less than one per cent at the country’s big banks.

At Tangerine, children hold their accounts jointly with a parent.

If a parent is already a Tangerine customer they can open up an account for their child online by entering the information on the bank’s website, said Oliver Small, a senior manager at Tangerine.

Small said you will need to have a social insurance number as well as one of several different pieces of ID to open the account such as a Canadian passport, a permanent resident identification or Secure Certificate of Indian Status.

For children age 11 or under, parents may also use a birth certificate or a citizenship card or certificate.

Small, who remembers his grandparents and parents teaching him early lessons of money management when he was a boy, said it is never too early to open an account.

“Money management and financial literacy are really critical life skills and we know that if you instill good behaviours early on they can last a lifetime.”

When your parents die broke

By Liz Weston

THE ASSOCIATED PRESS

Blogger John Schmoll’s father left a financial mess when he died: a house that was worth far less than the mortgage, credit card bills in excess of $20,000 and debt collector s who insisted the son was legally obligated to pay what his father owed.

Fortunately, Schmoll knew better.

“I’ve been working in financial services for two decades,” says Schmoll, an Omaha, Nebraska, resident who was a stockbroker before starting his site, Frugal Rules. “I knew that I wasn’t responsible.”

Baby boomers are expected to transfer trillions to their heirs in coming years. But many people will inherit little more than a pile of bills.

Nearly half of seniors die owning less than $10,000 in financial assets, according to a 2012 study for the National Bureau of Economic Research. Meanwhile, debt among older Americans is soaring. It used to be relatively unusual to have a mortgage or credit card debt in retirement. Now, 23 per cent of those older than 75 have mortgages, a four-fold increase since 1989, and 26 per cent have credit card debt, a 159 per cent increase, according to the Federal Reserve’s latest data from the 2016 Survey of Consumer Finances .

If your parents are among those likely to die in debt, here’s what you need to know.

*YOU (PROBABLY) AREN’T RESPONSIBLE FOR THEIR DEBTS When people die, their debts don’t disappear. Those debts are now owed by their estates. Some estates don’t have enough assets (property, investments and cash) to pay all of the bills, so some of those bills just don’t get paid. Spouses may have the responsibility for certain debts, depending on state law, but survivors who aren’t spouses usually don’t have to pay what’s owed unless they co-signed for the debt or applied for credit together with the person who died.

What’s more, assets that pass directly to heirs often don’t have to be used to pay the estate’s debts. These assets can include “pay on death” bank accounts, life insurance policies, retirement plans and other accounts that name beneficiaries, as long as the beneficiary isn’t the estate.

“You take it and go home,” says Jennifer Sawday, an estate planning attorney in Long Beach, California.

*YOU NEED A LAWYER Some parents hope to avoid creditors or the costs of probate, which is the court process that typically follows a death, by adding a child’s name to a house deed or transferring the property entirely. Either of those moves can cause legal and tax consequences and should be discussed with a lawyer first. After a parent dies, the executor must follow state law in determining how limited funds are distributed and can be held personally responsible for mistakes. That makes consulting a lawyer a smart idea _ and the estate typically would pay the costs. (The costs of administering an estate are considered high-priority debts that are paid before other bills, such as credit cards.)

At his attorney’s advice, Schmoll sent letters to his dad’s creditors explaining the estate was insolvent, then formally closed the estate according to the probate laws of Montana, where his dad had lived.

A lawyer also can advise you how to proceed if a parent isn’t just insolvent, but also doesn’t have any assets at all. In that situation, there may not be a reason to open up a probate case and deal with collectors, Sawday says.

“Sometimes, I advise clients just to lay the person to rest and do nothing,” Sawday says. “Let a creditor handle it.”

*YOU NEED TO TAKE METICULOUS NOTES The financial lives of people in debt are often chaotic _ and sorting it all out can take time. As executor of his dad’s estate, Schmoll dealt with over a dozen collection agencies, utilities and lenders, often talking to multiple people about a single account. He kept a document where he tracked details such as the names of people he talked to, dates and times of the conversations, what was said and required follow-up actions as well as reference numbers for various accounts.

*YOU SHOULDN’T BELIEVE WHAT DEBT COLLECTORS TELL YOU Some collectors told Schmoll he had a moral obligation to pay his father’s debts, since the borrowed money might have been spent on the family. Schmoll knew they were trying to exploit his desire to do the right thing, and advises others in similar situations not to let debt collectors play on their emotions.

“Just don’t make a snap decision, because it’s very easy to say, ‘You know what? I need to think about it. Let me call you back,”’ Schmoll says.

_______

This column was provided to The Associated Press by the personal finance website NerdWallet.

The not so golden years – 1 in 4 Canadian retirees living with debt

A worry-free retirement may be a thing of the past as Canadians struggle to manage debt. From living with a mortgage to unpaid credit cards, retirees can find themselves facing financial challenges in their golden years.The Sun Life Financial Barometer, a new national survey, found that one-in-four (25%) retirees are facing such challenges and living with debt.

  • 66% have unpaid credit cards;
  • 26% are making car payments;
  • 7% have unpaid health expenses;
  • 7% owe money on holiday expenses or vacation property; and
  • 6% haven’t paid off home renovations.

“Through our national survey, we took a moment to check-in with Canadians and gauge how they are stacking up when it comes to their finances,” said Jacques Goulet, President, Sun Life Financial Canada. “From credit card debt to a mortgage, retirees are faced with a list of expenses in life after work. We recognize that managing finances can be overwhelming, particularly for those who are no longer working. Seeking sound advice and working with a financial advisor can help you reach your goals.”

At the same time retirees face lingering debt, almost one-quarter (24%) of working Canadians are dipping into their retirement savings. Canadians pulled cash for the following reasons:

  • 63% did so because they needed to (e.g., health expenses, debt repayment);
  • 24% as part of the First Time Home Buyers’ Plan; and
  • 13% because they wanted to (e.g., vacation, car purchase).

“Our survey results highlight the importance of getting ready for retirement,” explains Tom Reid, Senior Vice-President, Group Retirement Services, Sun Life Financial Canada. “Although it can seem far away, retirement creeps up faster than you think – building a financial plan and making meaningful contributions will pay off in the long run. There are helpful tools and resources you can tap into to get on the right track to building the income you want and need to retire.”

The following tips can help Canadians save for a bright retirement:

  1. Start now. Begin saving and investing as early as possible to set yourself up for success.
  2. Don’t leave money on the table. If your employer offers a pension plan and will match your contributions, contribute the maximum amount possible.
  3. Invest wisely. If you do not have access to a defined contribution plan, RRSPs and TFSAs are other great vehicles to consider.
  4. Have a plan and stick to it. It’s never too late to build a financial plan that will get you where you want to be.
  5. Seek valuable advice. A financial advisor can help you create a financial plan, set achievable goals, and guide you through each life stage.

Ready to get started? Find a Sun Life Financial advisor who can support you on your journey to achieve a lifetime of financial security and well-being.

Sun Life Assurance Company of Canada is a member of the Sun Life Financial group of companies.

About the survey
The Sun Life Financial Barometer is based on findings of an Ipsos poll conducted between October 13 and October 19, 2017. A sample of 2,900 Canadians was drawn from the Ipsos I-Say online panel: 2,900 Canadians from 20 to 80 years of age. The data for Canadians surveyed was weighted to ensure the sample’s regional, age, and gender composition reflects that of the actual Canadian population.

The precision of Ipsos online poll is measured using a credibility interval. In this case, the poll is accurate to within +/- 2.1% at 95% confidence level had all Canadian adults been polled. All sample surveys and polls may be subject to other sources of error, including, but not limited to methodological change, coverage error and measurement error.

About Sun Life Financial
Sun Life Financial is a leading international financial services organization providing insurance, wealth and asset management solutions to individual and corporate Clients. Sun Life Financial has operations in a number of markets worldwide, including Canadathe United States, the United KingdomIrelandHong Kongthe PhilippinesJapanIndonesiaIndiaChinaAustraliaSingaporeVietnamMalaysia and Bermuda. As of December 31, 2017, Sun Life Financial had total assets under management (“AUM”) of $975 billion. For more information please visit www.sunlife.com.

Sun Life Financial Inc. trades on the Toronto (TSX), New York (NYSE) and Philippine (PSE) stock exchanges under the ticker symbol SLF.

Note to Editors: All figures in Canadian dollars except as otherwise noted. 

Media Relations Contact:
Kim Armstrong
Manager, Media & PR
Corporate Communications
T. 416-979-6207
kim.armstrong@sunlife.com

SOURCE Sun Life Financial Canada

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