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Sarah Chisholm, Financial Advisor O’Farrell Wealth & Estate Planning | Assante Capital Management Ltd. Grab your favourite cup of tea or coffee and let us look at Wealth Plans. A comprehensive Wealth Plan should incorporate all your assets, liabilities, and sources of income, not only your investment accounts. Your wealth portfolio can include any of the following investment accounts: RRSPs, TFSAs, and Non-Registered Accounts. These types of accounts are typically invested in mutual funds, ETFs, stocks, and/or bonds with the goal of using the funds for retirement or major expenses. When was the last time you reviewed your portfolios? Next, let us look at other potential sources of wealth. Rental properties should be included in your Wealth Plan. While income properties come with tenant challenges, increased debt obligations, and maintenance requirements, an income property can generate consistent cash flow and long-term equity growth. As your equity in one property grows, you may consider leveraging that equity to purchase a second or third rental property. It is important to note that the growth on your income property is considered a taxable capital gain. Have you built those taxes into your Wealth Plan? For farmers, the land can also be used as a source of wealth with cash crop or rental income and growing equity. If you wish to pass the land to a child, make sure to work with your Financial Advisor and an accountant on Wealth Plan. They can help implement strategies to make the land eligible as qualified farm property instead of just rental land. This is important because Qualified Farm Property can be eligible for a tax-free rollover which defers the taxes payable to the next generation. For business owners your biggest assets are the ability to generate profits in your business and future growth of the company. If you are re-investing most of your profits, make sure your business is well positioned for an eventual sale. Your Financial Advisor can help you determine how to maximize the value of a sale to a third-party, pass it on to a child in the most tax effective way and the tax liabilities surrounding the sale. As you are growing your business, it is important to plan for your exit. If the future sale value of the business is negligible, make sure you are drawing enough income out of the business to fund your retirement. Finally, you cannot build your wealth if you are burdened by consumer debts. Credit cards charge exorbitant interest rates. Get serious and implement strategies to pay down your debt and help grow your overall wealth. Building all these assets, strategies, and liabilities into your Wealth Plan will give you a clearer picture of where you stand currently and allow you and your advisor to make a plan for your future wealth.

Cyndy Batchelor, Financial Advisor O’Farrell Wealth & Estate Planning | Assante Capital Management Ltd. If you have managed to save some money over the past year and want to know where to invest it in tax efficient manner, here are a few things to consider before making that decision. Q: If I have not contributed to a TFSA in the past how much can I put in today? The TFSA limit for 2021 is an additional $6,000 for a total of $75,500. If you have never contributed, you may contribute the entire $75,500 (if you were born before 1991). If you have contributed in the past and made withdrawals prior to 2021, you may contribute any unused room you have plus any withdrawals you made – to confirm the amount, you can verify with your MyCRA account or TIPS at 1-800-267-6999. Q: Do the Investment Income and Earnings in my TFSA affect my contribution room? A: No, investment income and changes in the value of your TFSA do not affect the contribution room of your TFSA. Q: When will I need the money? A: Are you investing this for a short-term goal, like buying a car or a vacation next year or is this part of your overall retirement plan? A great advantage of a TFSA is it’s tax free status – so if you are able to use it as a long term retirement strategy, there are potential tax savings in other areas of your financial plan. Q: What can I invest my TFSA in? A: Like an RRSP, you are able to invest your TFSA in just about anything, including mutual funds, stocks, bonds, ETFs and cash or high interest savings products. Your TFSA is not necessarily just a “Savings Account”. Depending on your risk tolerance and your overall wealth plan you and your financial advisor can determine the best investment strategy for your TFSA funds.

Cyndy Batchelor, Financial Advisor O’Farrell Wealth & Estate Planning | Assante Capital Management Ltd. Q: What is an RRSP? A: An RRSP is a Registered Retirement Savings Plan. A deposit into an RRSP will reduce your taxable income for the year while allowing you to build your own personal “pension plan” for retirement. Q: How much can I contribute to my RRSP? A: Up to 18% of your income to a maximum of $27,830 for tax year 2020. However, if you did not max out your contributions in previous years you can catch up. Your Notice of Assessment will tell you your RRSP limit. Q: Should I use a RRSP or a TFSA? A: One of the differences between an RRSP and a TFSA (Tax Free Savings Account) is that a RRSP contribution gives you a tax break when you contribute. Where do you put your savings first? If you are just starting out and earning less, saving in a TFSA may be more prudent. Plus, when you retire the money you saved in your TFSA is not considered income – so it will not affect your taxes. As your income grows you can switch to a RRSP to take advantage of the tax break. If you have more questions, please reach out to us!

Daren Givoque, Financial Advisor O’Farrell Wealth & Estate Planning | Assante Capital Management Ltd. In January 2018, the Canadian government put the new tax on split income (TOSI) rules into effect which caused many business owners to have to rethink how to withdraw money from their corporations. After the new rules came into play a client of mine came to me, unsure of how he could withdraw money from his business without paying tons of tax with the new TOSI rules. Before the change in legislation he was taking advantage of income sprinkling by including his wife and two young children as shareholders in the business so he could pay them each a salary and reduce his family’s overall tax bill. The new TOSI rules meant that in order to continue to do this he would have to prove that the salary being paid to his wife and children were reasonable related to the job they were doing associated with the business. His children were still too young to play an active role in the company and his wife was busy at home with the children and her own small business. In short, there was no way to ever claim that the money being paid out to his family was fair under the new rules. Now that it was clear that he had to reorganize how he withdraw money from his company, he was unsure of how to protect his money from heavy taxation and save for the future. It is true. There is no longer a straightforward way for business owners like my client to withdraw money from their corporation without being heavily taxed. However, I was able to let him know that there is still one great product out there that could help him protect his money from being taxed heavily. Life Insurance. It may seem strange but buying certain types of life insurance can help you withdraw money from the corporation and shelter it in a tax-free environment. It is essentially a tax-free savings account for businesses. So how does this all work? Normally excess corporate profits stay trapped within the company. If the money sits idle and doesn’t earn anything there will be no growth to tax, but if it is passively invested and the gains are not directly attributable to the active growth of the company it will be subject to aggressive taxation. With tax-exempt life insurance there is a way to shelter your surplus as a corporate investment. The main types of tax-exempt life insurance policies are Whole Life insurance, Universal Life insurance and Universal Life insurance with guaranteed investments. The difference between these products and regular term life insurance is that they include a cash value, which is essentially a savings component. At the end of the day money that has been invested and the growth within the savings portion of the life insurance policy can flow to the business owner tax-free when they choose or to their heirs in a very tax efficient way on their estate. It is important to note that this is a long-term game and should be considered for retirement or long- term cash flow for the company. Insurance is a great investment for corporations, but it is 10-15 year commitment. Business owners who invest money in life insurance products should be comfortable with have limited ability to access it in the first five years. Any tax-exempt life insurance products can be used as a tax-shelter. The best one for you will depend on your unique situation. Talk to an advisor to see how your can use life insurance to your advantage and save your hard-earned money from taxation.

Daren Givoque, CDFA, Financial Advisor O’Farrell Wealth & Estate Planning | Assante Capital Management Ltd. In the first two articles in this series I talked about the first two mistakes I see when planning for retirement. The first one talked about how delaying liquidating your RRSPs could cost you money in the long run. The second was about using your TFSA effectively to save for retirement. So, what happens if you are doing everything right? You melt down your RRSPs, are using the TFSA effectively, own your home which is not taxable. Is there anywhere else to shelter money for retirement? Many people don’t realize it, but certain types of insurance can act as an investment to save for the future. Whole Life insurance offered by companies like The Great-West Life Assurance Company, London Life and Canada Life have an investment portion that remains tax-free as it is sheltered in a life insurance policy. In simple terms you have the ability to overpay the premiums and have that money invested by the insurance company and allow it to grow in a tax-sheltered environment. Many of the large insurance company’s whole life dividend scales on their participating accounts have actually beat the stock market over the *past 20 years with next to no volatility. You can also pass the policy on to future generations which makes it a great way to pass money on to your children or grandchildren. Unlike Term Life insurance, whole life insurance guarantees you a payout not matter when you die. Whole life insurance is not for everyone as the premiums can be expensive depending on the size of the benefit. However, it is a great option for people who find they have maxed out all other tax-free savings options. People who really understand insurance know how effective it can be as an avenue for savings. As I have mentioned before there is no cookie-cutter approach to saving for the future. *Great West Life Financial Facts 2018 https://www.greatwestlife.com/content/dam/gwl/documents/s7_000336_Financial-Facts.pdf

Daren Givoque, CDFA, Financial Advisor O’Farrell Wealth & Estate Planning | Assante Capital Management Ltd. In a previous article I spoke about the first of 3 big mistakes that people often make when planning for retirement: delaying liquidating RRSPs. To recap in short, it will often save you tax to start withdrawing money from your RRSPs early instead of waiting until the government makes you start taking it out at age 72. The second mistake that I often see with people when planning for retirement is not using their Tax-Free Savings Account (TFSA) effectively. TFSAs came into effect in Canada on January 1, 2009. The maximum annual contribution room for each year prior to 2013 was $5000. Beginning in 2013 it was increased to $5,500 per year. This $500 increase is meant to happen every year to account for inflation. In 2015 the federal government raised the amount to $10,000 but it was dropped back down to $5,500 after the election. The amount you can put into your TFSA is cumulative, meaning that if you started your TFSA after 2009 you have room to put the maximum amount allowed into the account for each of the years you missed out on. In 2020 the total cumulative contribution room for a TFSA is $-69,500. TFSAs are a great tool, but I don’t like the name. Used effectively it is not a savings account, it is an investment account. TFSAs can hold all sorts of investments including mutual funds, GICs, Stocks, Bonds, ETFs and more. TFSAs may be used aggressively depending on your personal situation. Money made on investments are not taxable, making it a great avenue to save for retirement. If you need to withdraw money from your TFSA to pay for current expenses the room is also always there for you to fill it back up. There it is. Mistake number 2.

Daren Givoque, CDFA, Financial Advisor O’Farrell Wealth & Estate Planning | Assante Capital Management Ltd. There are many things to think about when it comes to retirement. How am I going to fill my time? What type of lifestyle do I want to enjoy? And most importantly – How am I going to pay for it? After being a financial advisor for many years I have learned a lot about how to guide people in the right direction financially when it comes to retirement. Unfortunately, there are still some major pitfalls that people fall into when planning for retirement that can generally be avoided. Three big ones come to mind. Over the next few weeks I will be going over the top three mistakes that people make when planning for retirement. Hopefully this will help you avoid them and ensure that you have the money you need to finance the retirement that you want. If I asked you what your biggest expense is what would you say? Your mortgage or car payment may come to mind. What would you say if I told you that your biggest expense is actually tax? Many people forget about it because it is worked into your expenses in incremental amounts. However, in *2016 the average Canadian family (including single Canadians) who earned $83,105 in income paid $35,283 in tax. That’s 44% of your income going to taxes! In Canada almost everything is taxable. This includes your pension, salary, cottage, rental properties, RRSPs and RIFs, investment returns, the sale of a business and more. There are only three things in Canada that are considered tax free: your primary homes increase in value, your TFSA and insurance. Now there are a few others like the lottery, inherited gifts and exemptions for business owners, but these are unique and not easy to plan with. Now that you know what is taxable and not taxable are you using it to your advantage to save for retirement? This brings me to: Mistake #1 - Delaying using you RRSPs The whole idea behind RRSPs is to help you save for retirement in a tax-sheltered way. The money is only taxed once you start withdrawing it as income when you retire. The idea is that at this point you will be in a lower tax bracket and pay less tax on your withdrawals. At age 71 you must convert your RRSP into a Registered Retirement Income Fund (RRIF) and start to withdraw money. Many people wait until the last minute to start withdrawing money from their RRSPs but it many cases this doesn’t make sense tax-wise. The reality is every year you delay liquidating your RRSPs the government increases the percentage of tax you need to pay on it. By the time you are 80 you will be paying more tax than you would have if you started withdrawing money at age 65. Also, if you die and don’t have a spouse there is no one you can leave the money in your RRSP to tax-free. The day you die the entirety of your RRSP must be cashed out and if you have a lot of money left, it will be taxed at a high rate. For example, an RRSP that still has $340,000 left in it will be taxed at a 50% marginal tax bracket which means you will be losing half your savings. When planning for retirement it’s a good idea figure out the optimal age to start withdrawing money from your RRSPs to save the most tax. Unfortunately, there is no cookie-cutter approach. A qualified financial advisor will be able to look at your savings and retirement income and help you pinpoint the best course of action. There you have it. Mistake #1 when planning for retirement. * Taxes versus the Necessities of Life: The Canadian Consumer Tax Index, 2019 edition https://www.fraserinstitute.org/

Daren Givoque, Financial Advisor O’Farrell Wealth & Estate Planning | Assante Capital Management Ltd. Any successful business person will know what their target market is. Knowing your customer is one of the most important things when it comes to creating effective marketing plans. These days however many businesses are taking it one step further. Niche marketing is being used by business people to hone in on their specialty and ensure that they are delivering a targeted, quality product to the right people. Here are some of the reasons you should think about finding your own niche and some useful strategies on how to do so. How does niche marketing differ from your target market? Finding your target market is an important first step to take before you settle into your niche. Your target market is the specific group of people you work for i.e. mothers with small children, middle aged business people, dog owners. Your niche is the service you specialize in offering to your target market. If your target market is dog owners a niche might be dog booties for dogs who have sensitive feet. You can see how specific this is and how, with this lens you would be able to develop a quality product that solves a specific problem for the people in your niche. You can become an expert in your field When you develop a niche, it is easier for you to become an expert in your field. With your specific focus you can build your knowledge base and use it to gain leverage over your competitors. Becoming the expert is a valuable marketing tool. Let’s take the dog bootie example again for a moment. Wouldn’t you rather buy dog boots off a company who has proven knowledge about canine paws and materials that will make the boots warm and withstand the cold, ice and snow? Sounds like a more quality product and something that you can put your trust into doesn’t it. That’s the power of being the expert and niche marketing allows you to be that without spreading yourself too thin. Lets you work with your ideal client or customer Niche marketing allows you to be so targeted in your marketing that you reach the people that will really appreciate and benefit from your product or service. Rather than having to convince people that they need what you are offering you will be one step ahead of the game, solving a problem that you know they already have. At the end of the day working with people that are grateful for the product or service you offer is a lot more pleasant than having to fight tooth and nail to close a sale. Happy customers equal quality referrals Many business owners fear becoming too specific in what they do because limits them in who they can attract as clients. While casting a wide net is one strategy being more targeted will ensure your work with people who appreciate what you are doing and will pass you name on to other people in their network who may be looking for a similar product or service. Referrals are a great way to get your name out there because it enhances your credibility when you have a network of satisfied customers backing you up. It also costs next to nothing in your marketing budget. Focus on your why In todays market people are looking for the stories behind the products or services they are consuming. The “Why”. As well-known marketing consultant Simon Sinek says, “People don’t buy what you do they buy why you do it.” Figuring out your “why” is a great step in identifying your niche market. Once you figure out why you are providing your product or service and how it benefits your ideal customer it will be easy to figure out a marketing plan that reflects these values. Getting people to buy into your why will ensure you have lifelong clients rather than one-off customers. You will also feel good about doing business because you are living and working in accordance to your own core values. Niche marketing really comes down to this: Would you rather be a small fish in a big pond or a big fish in a small pond? Homing in on what you do best, why you do it and who you would like to work with will not only enhance the customer experience but also make your job more enjoyable and profitable in the long run.

Daren Givoque, Financial Advisor O’Farrell Wealth & Estate Planning | Assante Capital Management Ltd. Let’s face it. Life insurance is not a desirable topic of conversation. This is because it can be expensive, and it only pays out if something bad happens. Who wants to think about that? For business owners though, big or small, there are a few situations where having life insurance can solve some pretty big problems. Here are a few scenarios where life insurance can be an invaluable tool for you and your company. Death of a key person Does your business rely heavily on the work of one or more individuals? What would happen to your business if that personal suddenly became ill or suffered an injury and was no longer able to perform their duties? Key person insurance can help cover day-to-day business expenses and ensure your business can continue on during this difficult time. One great thing about a business purchasing key man insurance is that the premiums are tax deductible. As long as the policy makes sense (i.e. you are not purchasing a $500,000 policy for a debt that is worth $100,000) you will be able to claim it as a business expense on your tax return. Equalizing an estate In the event of your death you will probably want to make sure all your children receive an equal percentage of your estate. If you are a business owner you may have a few of your children working with you, while the others may have chosen a different career path. Instead of leaving shares of the business to all your children, reserve those shares for the children who actually have a stake in the company. A life insurance policy will make sure that you have the cash to equal the value of those shares to give to your children who are not active in the business. This could go a long way to mitigating potential conflict in your family after you pass away. Covering taxes on death Surprisingly, death is the time in your life when you are most heavily taxed. When you pass away you will be deemed to have sold you private company shares. You may be able to claim the lifetime capital gains exemption up to $ 848,252 (in 2018) but you could end up paying 25 per cent tax on anything that falls outside that exemption. Having insurance is a good way to ensure your executor will be able to pay that tax bill upon your death. Providing for your heirs If you are one of many shareholders in your company, having an insurance policy on your life will help provide from them, or the company, once you are gone. Cash from an insurance payout can be used to buy your shares from your estate so your heirs can ultimately benefit from them. If you have left your shares to your family, cash from an insurance payout will allow active stakeholders to buy the shares from your spouse/kids so they get a payout and your business partners maintain control of the business. An excellent investment vehicle Whole life insurance has the benefit of paying out no matter what. If you die at 55 or 105 you will be paid out. It also comes with the added bonus of having an investment side to the policy. By overpaying the premiums, you build up an investment account which is not taxable. This is a great way for business owners and high net-worth individuals to shelter money once their TFSA and RRSPs are maxed out. These investments are tax-free and are available for you to use at any time. This is a great way to both save for retirement or leave a larger sum of money to your children. As a business owner it is a great idea to talk to an insurance professional to find out which insurance products would be the best for your situation. Proper planning will ensure that things both within your business and at home will run smoothly in the event of sickness or death.

Sarah Chisholm, Financial Advisor O’Farrell Wealth & Estate Planning | Assante Capital Management Ltd. Have you noticed older relatives cleaning out their basements, or sorting through old files? It may be part of a Christmas clean, or it could be that they are preparing their affairs in case they die or become incapacitated unexpectedly. As morbid as this may sound, anyone preparing their affairs should be applauded for their efforts as they are making it much easier for their loved ones down the road. Grab your favourite cup of tea or coffee and let’s consider a few ways to ease the transition for your executor and loved ones. How can I prepare my investments for a smooth transition? Take advantage of beneficiary designations. On your Tax-Free Savings Account, name your spouse as successor holder and your children, friends, or charity as the beneficiary. For your Registered Retirement Income Fund, ensure your spouse is designated as the successor annuitant or that your beneficiaries are up to date. Non-Registered investments are accounts where growth such as interest income, dividends or realized capital gains/losses need to be reported on your annual taxes. The proceeds of your non-registered investment will be paid to your estate and go through the process of probate. Making sure your will is up to date will help ease the process. Holding your non-registered funds in a segregated fund account through a life insurance company may allow you to name beneficiaries directly on the account and by-pass the probate process. If you hold digital assets such as crypto currencies, it is important to make sure your executor has access to your login information. Still have some old stock certificates lying around? Bring them to your investment advisor or brokerage to get the stocks converted to the direct registration systems so that they are easier to manage. How can I prepare my insurance policies for a smooth transition? Depending on your stage in life you may hold a mixture of term life insurance policies, permanent whole life policies, or universal life insurance policies. The first step is to confirm which policies are still in-force and which policies have been cancelled, surrendered, or lapsed. This step will save your executor hours on the phone trying to track down old life insurance policies which may no longer exist. Once you have tracked down all your current policies, speak with your Advisor to confirm the coverage amount and the beneficiaries listed on the policy. Take the time to consider who should receive the death benefit and then work with your advisor to make those changes. A few final tips to ensure a smooth transition: make sure your taxes are filed, update your will, and prepare a summary of your investments and insurance. It may be morbid to start thinking about it, but your loved ones will thank you for all the advance planning you did.

Cole Seabrook, Financial Advisor O’Farrell Wealth & Estate Planning | Assante Capital Management Ltd. This is a question that Advisors are frequently asked. Let’s review Tax Free Savings Accounts - how they work, their benefits, and how they can play a major role in your overall wealth plan. In 2009, the Canadian government implemented the Tax-Free Savings Account (TFSA) program to help Canadians grow their wealth while retaining more of their investment earnings. To open a Tax-Free Savings account, you must be 18 years of age and a Canadian resident and adhere to the contribution limits. Since 2009, the contribution limit has changed from year to year, ranging anywhere from $6,000 to $10,000. If an individual was age 18 in 2009, their total contribution limit as of 2022 would be $81,500. Individuals need to be aware of the contribution limits to avoid the penalties that can occur. TFSAs or RRSPs? It is important to understand how different investment account types can play a role within your overall wealth plan. RRSPs provide you with a tax deduction in the year you contribute, but you are taxed when the time comes to take money out of the account. With a Tax-Free Savings Account, you do not receive a tax deduction when you deposit funds into the account, but you are also not taxed on your investment returns or when you withdraw your money. TFSAs also do not have to pay capital gains tax on withdrawals as they would with a non-registered account. While TFSA’s have many benefits some people wonder how this type of account fits into their overall wealth plan. The nice thing about Tax-Free Savings Accounts is that they can be used for many different purposes and provide investors with flexibility. They can be used to increase savings to help supplement income in retirement, or to save for an investors next vacation, home improvement or renovation. If you have not opened a Tax-Free savings account, it may benefit you in more ways than one. Speak to your Financial Advisor today to see where a TFSA fits into your wealth plan. We welcome questions so feel free to reach out!

By Sarah Chisholm, Financial Advisor O’Farrell Wealth & Estate Planning | Assante Capital Management Ltd. The deadline for filing your personal 2021 taxes has come and gone. Did you end up in the green or in the red? What will you do with that extra cash or how will you pay that CRA bill? With tax season still fresh in your mind, let’s take a step back to review 2021 and plan for 2022. For those lucky enough to receive a refund – have you considered what to do with it? The first questions to ask are: 1. Do I have credit card balances or high interest debt to pay off? 2. Do I have an emergency fund available? (Ideally enough to cover 3 months of expenses) If the answer is yes to either of these questions, that is where your funds should go. Neither of these is flashy or fun, but paying off consumer debt and building an emergency fund will help set you up for success in 2022. If you have these two covered, then you can begin exploring other options such as: 1. Discretionary purchases - the latest phone, new clothes, family trips. 2. Retirement investments - RRSP or TFSA are great options to build your wealth. 3. Lump sum payments on your mortgage – can you pay off your mortgage before retirement? 4. Home renovations – is now the time to build a deck or put in a backsplash in the kitchen? 5. Deposit funds to a child’s registered education savings plan – if you are within the limits, you will receive the 20% education savings grant. The answer may be to divide the refund and spread it across a few goals. A trusted Financial Advisor can review how each option fits into your overall financial strategy. A word of caution – if your refund was excessive, perhaps you need to re-assess what withholding tax strategies you are using. Remember a tax refund means that the federal government has had this extra money for the last 12 months – rather than in your pocket. What if you owe the CRA? Was this tax triggered by your regular income or was there an extraordinary transaction in 2021? For example, did you sell a rental property and had to pay capital gains taxes? Did you start receiving Canada Pension Plan or Old Age Security in 2021 but did not request withholding taxes? If you were in the red for 2021, make sure you pay the bill. The CRA begins charging 5% interest right away. Stepping back to review your 2021 taxes can help set you on a better course for 2022. Should you increase your RRSP contributions or increase the withholding taxes on your registered retirement income fund? Did you spend two days sorting through receipts and bills before you could even start filing your taxes? Perhaps in 2022 you could work on a monthly reconciliation, or take a more active approach to filing important documents like charitable donation receipts and health care expenses in a special tax file. If historically you always seem to owe at tax time, now is the year to start setting aside money monthly for taxes. This way you will be prepared for the next bill. 2022 is a fresh start, enjoy. Sarah Chisholm is a Financial Advisor with Assante Capital Management Ltd. The opinions expressed are those of the author and not necessarily those of Assante Capital Management Ltd. Please contact her at 613.258.1997 or visit ofarrellwealth.com to discuss your circumstances prior to acting on the information above. Assante Capital Management Ltd. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada.