Tax-Free Savings Accounts – Are They Right For You? by Jennifer & Andrea Kirby

By Jennifer and Andrea Kirby
Kirby Financial Group

This year will be remembered not only for market turmoil, but also for the introduction of the TFSA, the most revolutionary tool for Canadians to save since the inception of RRSPs.

Why the Tax-Free Savings Account is relevant for corporate women?
With a Tax-Free Savings Account (TFSA), you can invest money in an account that will grow on a tax sheltered basis (you do not have to pay tax on the growth), and you are not taxed when the money is withdrawn from this account.

These accounts are ideal for people who wish to save outside their RRSP for a short, medium or long-term goal. A great benefit to women is the ability to save for a maternity leave. Money inside the account will not only grow tax free but future withdrawals will not be taxed and can be made anytime

Features of the TFSA
* If you are over 18 years old, you can deposit $5000 per year into your account. The over-contribution penalty is 1% per month.
* The $5000 annual contribution limit will be indexed with inflation in $500 increments starting in 2010.
* Un-used contribution room can be carried forward indefinitely; withdrawals can be re-contributed in future years.
* Investments that qualify to part of your RRSP can also be held within your TFSA (eg: stocks, bonds, mutual funds, GICs)
* At retirement, withdrawing from your TFSA won’t impact your eligibility for other government programs (eg: OAS).
* Upon death, the balance of your TFSA can be transferred directly to your beneficiary without impacting their contribution room.

TFSA or RRSP?
The suitability of using a TFSA rather than your RRSP depends on a number of factors:
* Your current and expected tax rate
* Expected withdrawal date
* Your overall financial plan

About Kirby Financial Group
Jennifer Kirby is a Certified Financial Planner, Chartered Life Underwriter and Registered Health Underwriter with a passion for making sense out of complex financial products. She is also a Certified Divorce Financial Analyst. Jennifer has been working in the financial planning industry since 1995 and has a proven track record for helping clients clarify their personal and financial objectives.

Andrea Kirby has an MBA from Simon Fraser University and joined Kirby Financial Group in 2007. Andrea is dedicated to providing clients with candid, up-front advice and excellent customer service. She has been a member of the Social Investment Organization since 2008.

Please contact us anytime if we can help you with creating a financial plan.

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Green investing – why bother?

Green Investing

Green investing – why bother?

By Jennifer and Andrea Kirby,
Kirby Financial Group  www.kirbyfinancialgroup.com

Increasingly, Canadians are deciding that they want to invest in a way that is aligned with their social conscience. What that conscience tells them differs from person to person and from fund company to fund company.

From there, individual investors, the media, and critics wonder aloud whether there is any point at all to selecting funds that have used various screens to select companies they believe are making a positive change.

The broad category of “Socially Responsible Investing” captures a wide variety of funds. SRI is defined as the integration of people’s social, environmental, and ethical values with their investment decisions.

It is generally agreed upon that there are three strategies that produce a positive “triple bottom line”: screening, shareholder action, and investment in the community.

Screening
The first bone of contention among SRI advocates is the screening process used to select or reject certain companies as part of a fund portfolio. Positive screens might be comprised of aboriginal concerns and relations, animal testing, cultural and gender diversity, environmental impact, or international human rights.

Negative screens can include alcohol and tobacco production, gambling, nuclear power, military contracting, or pornography.

Naturally, different investors look at the importance of these positive and negative screens differently. Some people may see pornography as harmless but consider a wind energy company running roughshod over local farmers as grounds to dismiss that company as being “unethical”.

In working with an advisor to include SRI criteria in your investment decisions, it is important that you are clear with regards to the criteria you would use to select or deselect certain companies. Meritas Mutual Funds, for example, has a 0% tolerance for companies engaged in activities defined by its negative screens (www.meritas.ca).

Other fund companies might allow a company to earn 10 – 15% of its profits from, say, military contracting before eliminating them from their portfolio.

Shareholder Action
For some SRI advocates, shareholder activism represents the most important aspect of the social change that SRI offers. While not every fund company has a mandate for shareholder action on dimensions of social, environmental, and ethical values, it is an important way in which SRI funds are able to impact the way companies are doing business.

Shareholder action means that the fund company, on behalf of investors, opens a dialogue with management to increase its understanding of social and environmental issues, vote in line with standards set out by the fund mandate, and work with companies that indicate a willingness to change. At times, SRI funds will divest themselves of company shares when no actions or plans are underway.

This pressure from shareholders can be significant and encourage companies to make decisions that take into account social and environmental considerations.

This strategy is not universal among fund managers. In instances where an SRI fund is only one offering in a fund company’s list of investment options, one should question whether the voice of socially responsible investors is being heard at shareholder meetings.

For example, if a bank lists one or two SRI options in its thirty fund offerings, how likely is it that SRI concerns would be voiced at shareholder meetings or taken into consideration when it comes down to a vote?

If shareholder activism is important to you as an investor, ensure that the fund company as a whole holds a real commitment to the SRI cause – look for voting intentions listed on the company website prior to meetings or reports on the changes sought through negotiations with corporate management and/or voting.

Investment in the community
Finally, some SRI fund companies hold a mandate to contribute to local communities. These investments would normally be designed to provide economic growth and opportunity in areas that might not normally have access to capital.

Not surprisingly, SRI funds with this mandate insist that these investments do not have a material effect on return to the investor.

Certainly, it is “buyer beware” in the realm of socially responsible investing. If your advisor is not willing to open a dialogue with regards to your investment values, you should find someone who is. The Social Investment Organization lists advisors across Canada who have a demonstrated commitment to these funds.

About Kirby Financial Group
Jennifer Kirby is a Certified Financial Planner, Chartered Life Underwriter and Registered Health Underwriter with a passion for making sense out of complex financial products. Jennifer has been working in the financial planning industry since 1995 and has a proven track record for helping clients clarify their personal and financial objectives.

Andrea Kirby has and MBA from Simon Fraser University and joined Kirby Financial Group in 2007. Andrea is dedicated to providing clients with candid, up-front advice and excellent customer service. She has been a member of the Social Investment Organization since 2008.

Please contact us anytime if we can help you with creating a financial plan.

The Best Mother’s Day Gift You Can Give Yourself

Mother dancing with child

The Best Mother's Day Gift You Can Give Yourself
By Jennifer and Andrea Kirby,
Kirby Financial Group  www.kirbyfinancialgroup.com

Mothers are amazing individuals and seem to be able to balance so many things from birthday parties to high-powered careers. We are often thinking about everyone else first, our children, our friends and our family. With this, it seems that finances are often left on the back-burner. 

For many women, the idea of a financial plan is overwhelming and intimidating therefore many women do not seek financial or investment advice.  In our practice we see women approaching retirement that have no idea what they have or how their money will work for them. 

Statistics show that women in their 60s are among the poorest group of Canadians; many of these women thought that someone would look after them and are often disappointed when they hit retirement with little or no savings. A new TD Waterhouse report says that women aged 56 to 65 wish they had received more advice on how to take care of their finances when they were younger.

Creating a financial plan does not have to be complicated and when broken down, many women feel empowered and excited when they develop a plan for retirement, debt repayment, education savings or figure out their insurance needs. Working with a Certified Financial Planner (CFP) is a great start to developing clarity around what you want to accomplish.  

The Financial Planners Standards Council has a website http://www.cfp-ca.org/ that can help locate a CFP in your area.  As well, the website will help guide individuals through a typical financial planning process and lists questions to ask a CFP before meeting with them.

There are also a number of great books on the market today that are good sources of information for women.  "Make Money Not Excuses" by Jean Chatzky is a great beginner book if you are wondering where to start.  She is a financial coach from the United States that has been featured on Oprah and various other shows.  Although some of the information is US based, the same principles apply in Canada.

At the beginning of the book Chatzky  talks about 8 ways to start on the road to financial awareness.  Some of her suggestions include:

1)  Get started now:  sign up for automatic savings plan and promise not to touch these funds.

2) Call a lawyer and update your will.  In Canada, lawyers can also create a personal directive and an enduring power of attorney when you update a will.

3) Pause before your purchase-for purchases over a certain amount, walk away from the store and think about whether you really need the item first.

4)  Improve your credit score-pay bills on time and make sure that you have credit in your own name to build up your own score.

5)  Pay off credit card debt with savings or money market accounts that you have set aside.

6)  Investigate your benefits at work and make sure you are taking advantage of any retirement plans that may be available.

7)  Look at all your insurance policies to make sure that you are getting the best rates possible.

8)  Use debit not credit.

Tips such as these can give people good food for thought when trying to make sense of their financial life. Taking charge of your finances and being proactive with your family's financial plan is one of the best gifts that you can give yourself this Mother's Day.

Happy Mother's Day!

About Kirby Financial Group
Jennifer Kirby is a Certified Financial Planner, Chartered Life Underwriter and Registered Health Underwriter with a passion for making sense out of complex financial products. Jennifer has been working in the financial planning industry since 1995 and has a proven track record for helping clients clarify their personal and financial objectives.

Andrea Kirby has and MBA from Simon Fraser University and joined Kirby Financial Group in 2007. Andrea is dedicated to providing clients with candid, up-front advice and excellent customer service.

Please contact us anytime if we can help you with creating a financial plan.

Women In Black – An Inspiration this Valentines Day

Here it is February and Valentines day is just around the corner.
This months issue centres around the theme of "Treats for Mom".
This brings to mind some of the more traditional gifts such as flowers, chocolate (always good) and a well deserved trip to the Spa.

 Sometimes treats take an entirely different meaning.

I was recently helping out in my mothers clothing store on a Saturday morning and after returning from down the boardwalk to get a cup of coffee I spotted a group of women dressed in Black standing across the road.
An hour later one of the women entered our store and I had an opportunity to hear about a movement that I had been completely unaware of.

"Women in Black "is an international peace network started by Israeli women in Jerusalem in 1988. All members believe that male violence against women in domestic life and war are connected.  Women in Black stand in silence to protest war, rape as a tool of war, ethnic cleansing and human rights abuses around the world.

Once a month on a Saturday at 11:00 AM a group forms on the Boulevard of the village shopping centre dressed in Black and stands silently for one hour.
It totally amazes me when we embrace something that we believe in and how a group of common minded women can have an impact that spreads from Jerusalem to Ma-me-o Beach Alberta, population 300 in the summer.

So the point is that treating ourselves can also come in the form of making time to attend to our beliefs and values. It can be feeling in control of our busy lives and making decisions that align with the way that we see the world. In the financial world it means treating our retirement goals with as much importance as paying the cell phone bill on time.

So here's to each of us, our success and our potential. My hope is that you are creating the life that you want and feeling good doing it.

Happy Valentine's day

Identity Theft: How It Happens And Avoiding It

You or someone you know may have experienced some form of identity theft.  The US government estimates that up to 9 million Americans have their identities stolen each year (source ftc.com).  The crime takes many forms. Identity thieves may rent an apartment, obtain a credit card, or establish a telephone account in your name. You may not find out about the theft until you see your credit report or credit card or bank statement and notice unauthorized charges—or you get a call from a collection agency.

Frank Abignale the famous reformed thief whose story was told in the Leonardo DiCaprio movie Catch Me If You Can  has offered the following tips on how to avoid identity theft:

1. Don’t give out your Social Security number. It is the key to your credit history, bank accounts, and is the main target of criminals.
2. Monitor your credit report. Containing your SSN, employment history, current and closed bank account numbers, , and your credit score. After supplying your SSN after applying for a  credit card, loan, car rental or anything else, request that your SSN on the application be truncated or completely removed and your credit report be destroyed in front of you or returned once a decision has been made. The business only needs to keep your name and credit score for the record.
   
   
3. Cross-cut shred all bank and credit statements and unsolicited credit card offers before throwing them out. The crosscut shredders cost more than regular shredders but make it more difficult for dumpster diving thieves to reconstruct.
   
   
4. Ask for your name to be put on the Direct Marketing Associations do not call and do not mail lists. Reduce the number of pre-approved credit card offers you receive by contacting the credit reporting bureaus to have your name removed from their marketing lists.
5. Only carry the cards and other identity documents you need for your outing. If you lose your wallet or purse you’ll have less to cancel and less for thieves to use.

How do thieves steal an identity? – Source ftc.com

Identity theft starts with the misuse of your personally identifying information such as your name and Social Security number, credit card numbers, or other financial account information. For identity thieves, this information is as good as gold.

Skilled identity thieves may use a variety of methods to get hold of your information, including:

1. Dumpster Diving. They rummage through trash looking for bills or other paper with your personal information on it.
2. Skimming. They steal credit/debit card numbers by using a special storage device when processing your card.
3. Phishing. They pretend to be financial institutions or companies and send spam or pop-up messages to get you to reveal your personal information.
4. Changing Your Address. They divert your billing statements to another location by completing a change of address form.
   
   
5. Old-Fashioned Stealing. They steal wallets and purses; mail, including bank and credit card statements; pre-approved credit offers; and new checks or tax information. They steal personnel records, or bribe employees who have access.
6. Pretexting. They use false pretenses to obtain your personal information from financial institutions, telephone companies, and other sources.

How can you find out if your identity was stolen?

The best way to find out is to monitor your accounts and bank statements each month, and check your credit report on a regular basis. If you check your credit report regularly, you may be able to limit the damage caused by identity theft. For more information, visit the Detect Identity Theft section of the US Federal Trade Commission web site.

Unfortunately, many consumers learn that their identity has been stolen after some damage has been done.

• You may find out when bill collection agencies contact you for overdue debts you never incurred.
• You may find out when you apply for a mortgage or car loan and learn that problems with your credit history are holding up the loan.
• You may find out when you get something in the mail about an apartment you never rented, a house you never bought, or a job you never held.

For more information on what to do if it’s happened to you see the following link from the US Federal Trade Commission:

http://www.ftc.gov/bcp/edu/microsites/idtheft/consumers/defend.html