Personal Finance Quotes

For the purpose of determining your OAS benefits, you may be able to add the years you lived in another country - assuming you contributed to its social security system - to the years you've resided in Canada. This is a result of social security agreements Canada has with a number of other countries. [2019] - Eric Tyson

When you evaluate the cost of a product or service, think in terms of total, long-term costs. People who sell particular products and services may initially appear to have your best interests at heart when they steer you towards something that isn't costly. However, you may be in for a rude awakening when you discover the ongoing service, maintenance, and other fees you face in the years ahead. Sometimes, paying a reasonable amount more upfront for a high-quality product or service ends up saving you money in the long run. [2019] - Eric Tyson

In grocery stores, you can often find name brands and store brands for the same product sitting in close proximity to one another. On reading the label, you can see that the products may, in fact, be identical, and the only difference between the two products is that the name-brand costs more (because of the branding and associated advertising and marketing). [2019] - Eric Tyson

If you have to take certain drugs on an ongoing basis and pay for them out of pocket, ordering through a mail-order company can bring down your costs and help make refilling your prescriptions more convenient. Also, inquire about generic version of drugs. [2019] - Eric Tyson

In the long run, you save money with a higher deductible, even when factoring in the potential for greater out-of-pocket costs to you when you do have a claim. Insurance should protect you from economic disaster. Don't get carried away with a really high deductible, which can cause financial hardship if you have a claim and lack savings. [2019] - Eric Tyson

Check out "Tax Planning For You and Your Family" prepared by KPMG and published by Thomson Carswell for easy-to-understand, digestible explanations and advice. Another accounting firm, Raymond Chabot Grant Thornton, also has a helpful "Tax Planning Guide", which you can download at https://www.rcgt.com/en/. StudioTax, available at www.studiotax.com for free, regardless of your income level, is a great, easy-to-use program. TurboTax and H&R Block Tax Software are also programs that we've reviewed and rated as very good. The CRA's website (www.cra-arc.gc.ca) is among the better tax websites, believe it or not. [2019] - Eric Tyson

Subtract your age from 110 (120 if you want to be aggressive; 100 to be more conservative) and invest the resulting percentage in stocks. You then invest the remaining amount in bonds. Consider allocating a percentage or your stock-fund money to overseas investments (a combination of U.S. and international stock funds) - at least 20 percent for play-it-safe investors, 25-35 percent for middle-of-the-road investors, and as much as 35-50 percent for aggressive investors. [2019] - Eric Tyson

With dollar-cost averaging (DCA), you invest your money in equal chunks on a set, regular schedule - such as once a month - into a diversified group of longer-term investments. The attraction of DCA is that it allows you to ease into riskier investments instead of jumping in all at once. The flip side of DCA is that when your investment of choice appreciates in value, you may wish that you had invested your money faster. DCA is most valuable when the money you want to invest represents a large portion of your total assets and you can stick to a schedule. [2019] - Eric Tyson

You can usually beat the interest rate on shorter-term GICs (those that mature within a year or so) with the best high-interest savings accounts or money-market funds, which offer complete liquidity without any penalty. [2019] - Eric Tyson

Although you can close out your RRSP earlier than the year in which you celebrate your 71st birthday, the best strategy for most people is to leave your RRSP intact for as long as you're allowed. This is almost always the case if you decide to turn it into an RRIF. If you choose to go the annuity route, collapsing your plan a year or two early can make sense. If interest rates are relatively high, closing your plan out early may make sense if it allows you to lock in a higher-than-average return. [2019] - Eric Tyson

RRIFs are usually a good choice if you enjoy managing your money, have an indexed company pension plan that guarantees you a basic level of income, and don't immediately need to start drawing on your funds. Another advantage of RRIFs is that you can convert them to an annuity at any time. Annuities are usually best when you have small retirement savings that absolutely need to last a number of years (especially if you're young and your family has a history of living a long time) and must have the peace of mind that comes with knowing just how much you have to live on. [2019] - Eric Tyson

Contributing to an annuity may make sense if you've exhausted contributions to RRSPs and employer-sponsored and self-employed plans and you expect to leave the money compounding in the annuity for at least 15 years. It typically takes this long for the benefits of tax-deferred compounding to outweigh the higher annuity fees and treatment of withdrawn annuity earnings at the higher ordinary income-tax rates. If you're close to or are actually in retirement, tax-friendly investments made outside of registered retirement plans are preferable. [2019] - Eric Tyson

High-interest savings are generally a better choice than money-market funds. Unlike money-market funds, high-interest savings account don't require a minimum deposit, nor do you have to worry ab out getting dinged with commissions, charges, or fees for withdrawing your money within a certain time frame. Another big plus is that, unlike a money-market fund, you can access your money quickly as long as your money has been in the account the required number of days. [2019] - Eric Tyson

Avoid small-potato insurance policies such as extended-warranty and repair plans, home-warranty plans (unless you're required by provincial regulations), dental insurance, credit life and credit disability policies, insuring packages in the mail, cellphone insurance, contact-lens insurance and little-stuff riders (small insurance policies that are sold as add-ons to bigger insurance policies such as auto and disability insurance). [2019] - Eric Tyson

If you're having problems getting a fair settlement from the insurer of a policy you bought on our own, try contacting the provincial department that overseas insurance companies or the provincial regulator. You can find the phone number online or possibly in your insurance policy. Hiring a public adjuster who, for a percentage of the payment (typically 5-10 percent), can negotiate with insurers on your behalf is another option. When all else fails and you have a major claim at stake, try contacting a lawyer who specializes in insurance matters. Expect to pay at least $150 per hour. [2019] - Eric Tyson

You generally need life insurance only when other people depend on your income. The following folks don't need life insurance to protect their incomes: 1) Single people with no children; 2) Working couples who could maintain a lifestyle acceptable to them on one of their incomes; 3) Independently wealthy people wo don't need to work; 4) Retired people who are living off their retirement nest egg; 5) Minor children (because you're not financially dependent upon them). [2019] - Eric Tyson

Most disabilities are caused by medical problems, such as arthritis, heart conditions, hypertension, and back/spine or hip/leg impairments. The vast majority of these medical problems can't be predicted in advance, particularly those caused by random accidents. Being without disability insurance is a risky proposition, especially if, like most working people, you need your employment income to live on. If you're married and your spouse earns a large enough income that you can make do without yours, consider skipping disability coverage. The same is true if you're already accumulated enough money for your future years (in other words, you're financially independent). [2019] - Eric Tyson

In order to receive CPP or QPP disability benefits, you generally must have paid into the CPP or QPP for at least four of the six years leading up to the point at which you became disabled. Your disability must be severe, which means it prevents you from doing not only your former job but also any job on a regular basis, in order to qualify. The disability must also be prolonged, meaning it's expected to last at least a year or be likely to result in death. CPP/QPP disability payments are quite low because they're intended to provide only for the basic, subsistence-level living expenses. [2019] - Eric Tyson

The majority of people who stay in a nursing home are there for less than a year, because they either die or move out. If you have relatives or a spouse who will likely care for you in the event of a major illness, you definitely should not waste your money on long-term-care (LTC) insurance. You can also bypass this coverage if you have and don't mind using retirement assets to help pay nursing-home costs. Even if you do deplete your assets, remember that you have a backup: government-assistance programs. However, this will usually cover only basic accommodations. [2019] - Eric Tyson

Some of the low-cost travel medical insurance providers include Canadian Automobile Association (www.caa.ca), Ingle International (www.ingleinternational.com) and travelcuts (www.travelcuts.com). [2019] - Eric Tyson