As I wonder what to write about this week, I am reminded by my sweet 17-year-old that I am too old to know anything. This comes about as she is learning to drive my car, now I guess after 40 years of driving my 17-year-old who yearns to be free is in that stage of Dads don’t know anything. This may be correct in today’s world of teenagers but I know one thing I own the car and control the keys.

The interesting fact about raising two girls is eventually I do know something and become the smartest person in the room as long as no one else is around. My 20-year-old went through a similar stage and now that she has bills to pay, she understands that the money tree in the house is not always fruitful. There was a steep learning curve but we managed to get through this together. I had to sit her down and draw diagrams as this generation works well with pictures since they are on their phone all the time. 

Let me set this up so you understand how I got to be the smartest in the room again.  

I gave my daughter her very own credit card. Yes, I did – Bad Idea not really in a society where cash is a thing of the past and everything you do requires a good credit rating. Teaching your child about good credit management before, they go to University and move out into the real world is a key lesson in Financial Wealth Sense.

The beginning of the lesson was harsh and a steep learning curve for all involved, as I paid the credit card bill monthly. The credit card was meant to be for gas and emergencies. She understood the gas part well but the emergencies quickly became Starbucks, Booster Juice, Boston Pizza and all other things that she had to have. In the beginning I did not mind her using the card at will as I knew what she was spending it on as the app on my phone notified me each time a transaction was made. Like I said I paid the bill monthly so she would continue down the path of having good credit and to be totally honest she did not have a job because of school and sports commitments. In the beginning it was fine but then the very fine line became easier to cross, she was starting to spend money at will. The learning curve was a $1,500 visa bill from various spends during a one-month shopping spree. Again, I knew it was happening and I let her do it to teach the lesson. Wait for it!

Once the month was over and the final bill was in, I filled up the car with gas gave her a gas card for $150 and put $250 in her bank account for extras. Because it was meant as a lesson not a punishment, I said this needs to last you six weeks, you now must choose how you want to spend your money and to clarify I did take the credit card away for the same six weeks.  Of course, she did not understand why and in fairness I never explained how this would play out. I already knew exactly what would happen given the parameters I set out for her when I gave her the credit card. She had no idea that she had spent that much in a month as her exact words where, “It was easy all I had to do was tap tap!” I also explained that it was nice that you wanted to pay for all your friends’ coffees, and dinners but that would have to wait until you had your own money to be that generous.

This is where the diagrams come in to play because remember this was about teaching a lesson not a punishment. With pictures and a lap top, I showed her how credit ratings work and why she needs a good credit rating in the future so she can buy a car, a house, or even apply for credit. I then explained that she had no money coming in (other than birthday, holiday money from generous relatives, and odd jobs) but she was spending as if she was gainfully employed.  

I then asked the $1,500 question. 

How will you pay this bill?  

Of course, there was a blank stare followed by the words, “I don’t know.”  This is where many individuals end up making monthly payments on consumer spending for money that they did not have in the first place and it’s too easy to get caught up in the cycle. 

I drew this diagram below to help explain the process of money and her future lifestyle: Three Kinds of Money

Lifestyle: In its simplistic form are the things that we can afford to do and have while we enjoy the merits of living for today and days to come.

Accumulation: Is the process of collecting assets, through purchase or by obtaining them, an activity of collecting for a particular purpose in the future.

Transferred: This is money that is being directed away from your Lifestyle and Accumulation of funds that will not help you lead life the way you want in the future. This is where Credit Cards, and Debt usually reside!

So now that you understand the three kinds of money above:

Which would you least want to change moving forward?

If you said Lifestyle, you would be correct. No one wants to change the way they live on a daily basis. So, we cannot take away from your LifeStyle.

Which would you want change the most?

If you said Accumulation, you would be correct. We want this to be the biggest piece of the circle moving forward because our accumulation will help us keep the Lifestyle to which we have become accustomed to in the future.

So, by default that leaves us with Transferred, we want this to be the smallest piece of the circle in our future because this is money that we are losing unknowingly or unwillingly through Credit Cards, Debt, Interest and Monthly Payments.

“Does all this make sense?” I asked.

She said Yes! She now understands the process of money and it’s transactions, and for the next six weeks she managed her funds, she was proud of the fact that she made the money last although the car was running on fumes she did have money left in her spending account. 

She still has the credit card today but only uses it when it’s absolutely needed, she has managed to find a great summer job while in university and has made a fair amount of money. She has started an investment portfolio (Accumulation), she has also created a budget plan for herself and has managed to stay within her limits (Lifestyle). I have only had to provided some support for bigger ticket expenses that happen from time to time but I always attach a limit to those purchases to keep her in check (these would be the Transferred expenses). If I did not help there would be monthly payments and interest since they were not in the budget. To be fair she does try to contribute some money to these purchases. When she graduates and finds that dream job I will teach her the value of an Emergency Fund to compensate for things that happen outside of her budget.

My point here is simple we have to teach our children how to be financially stable, we must teach them how to live for today and be set for the future because if we don’t, they will find themselves in a cycle of never-ending debt with bad credit. It’s easy to do when you don’t understand the value of your needs versus wants or financial well-being.

I guess the moral of this story is that I may not always be the smartest one in the room at all times but the one time I need to be I will be.



As we make our way through the cycle of life, we always find a way to put off the uncomfortable things for another day. We have been taught to be prepared whether it was for the unexpected or expected we should always be prepared. If only life were that simple!

Since Covid-19 planning has never been more top of mind for Canadians, but research shows that 57% of Canadians don’t have a will. My clients will attest to this as it is one of the first questions I ask in my interview process. Sadly, I concur only half of my client base had Wills in place before we met.

Estate planning typically isn’t at the top of our to-do lists because it can be complex, expensive, and – let’s face it – who is worried about dying while living. 

If you don’t want to see a lawyer about creating a will, Online wills are a thing, as are Handwritten wills.

Example of a hand written will…

“In case I die in I leave all my worldly possessions to the guy next door.” signed: The Neighbour

Seems simple enough – not to mention lucky guy next door!

“In case I die in I leave all my worldly possessions to the guy next door.” signed: Seems simple enough – not to mention lucky guy next door!

If you were to pass tomorrow and you left this handwritten statement to be found. Then the statement above would be upheld as a valid will, since holograph wills (handwritten wills) are legal in all provinces except BC and PEI. As long as a will is written entirely in your handwriting and signed by you, it’s legally valid. Please understand if you are writing your own will that it likely won’t be as comprehensive as a will created online or with a lawyer.  But in the end a will isn’t just about who gets your assets, it’s also about appointing an executor of your estate and guardians for any minor children. 

Let’s say you have an estate worth 1 million dollars, and you don’t have a spouse or any heirs. Typically, in this situation you may pass things to a friends, acquaintances, universities, alumni associations or charities to name a few. People without heirs will get creative in how they pass on their assets. It’s much more common to leave a gift to charity, friends, or organizations if you don’t have children. In fact, leaving a gift to charity in your will is one of the ways you can have a positive impact when you’re gone not to mention the tax break received by the estate – you can either leave a bequest (a specific item/amount of money), or a portion of your estate to an organization you care about.

The validity of the will can be challenged, and a judge will always look for testamentary intention.

What did the testator (the will-maker) actually intend? It’s important to be clear with your wishes, and it’s equally as important to say what you DON’T want as to what you do – for example if you want to ensure someone is disinherited or cut out of your will, stating that in the will and providing any additional details can ensure your wishes hold up after you’re gone.

Planning your estate and communicating your wishes as appropriate can protect your estate and, as importantly, allow your heirs the opportunity to prepare themselves for their changed circumstances. The “do nothing” option is not in the best interests of your family, your business or other relationships. As the world we live in becomes increasingly characterized by legal action and government intervention, estate planning is something everyone should do. 

So, the moral of the story is unless you want to work for the government in death create a Last Will of Testament that clearly state your intentions upon death. Whether you are leaving your processions to your heirs or creating a legacy the value of a will is not as complex as you believe it to be and also makes for great wealth-sense.



In 2009, the Tax-Free Savings Account (TFSA) was introduced to Canadians. Since that time, TFSA’s have grown in popularity and as a result, there are lots of debates over which is better the RRSP or the TFSA. 

What does each investment do for you Immediately?

RRSPs give you an immediate tax deduction…

The most attractive feature of the RRSP is the immediate tax savings you get when you put money into the RRSP.  The value of this tax break is determined by the marginal tax rate that you are in.  This short-term tax gain is offset by future taxes when you take the money out of your RRSP.  When you take money out, you will pay tax based on your marginal tax rate at the time you take the money out (which should be a lower tax rate than at the time you originally put the money in).  Any growth inside the RRSP, grows tax deferred but eventually there will be taxes paid when withdrawn from the RRSP.

Tax Free Savings Accounts give you Tax Free growth…

Unlike the RRSP, there is no immediate tax deduction when you put money into the TFSA but there is no tax paid when you take the money out either. The appeal of the TFSA is actually the TAX-FREE growth on your investments within your TFSA portfolio. You don’t pay tax on any of the growth inside a TFSA.  That is its best feature.

Below we have the reasons…

What do you need this money for?

If you need to spend the money in the near future for a car, a kitchen renovation, or maybe for a vacation, the TFSA is a better option because using the money does not trigger tax.  However, putting money into a TFSA and then taking out on a regular basis kind of defeats the real benefit of the TFSA which is its long-term TAX-FREE growth. If the Tax-Free growth is the goal, then you might be better off using a high interest savings account instead of a TFSA as the savings vehicle.

Emergency Funds…

Most people will agree that a TFSA, conceptually, can be a great place for emergency money.  However, an emergency fund should not only be readily accessible but also a safe investment.  Putting safe investments in place with lower returns to remove market volatility concerns will also negate the true benefit of the Tax-Free growth.  If you want your TFSA to be a safe haven for your investment then you will probably get better results from a High Interest Savings account for your emergency money with zero risk involved.

Saving for your first home or for education…

While the TFSA and the NON-RSP (non-registered savings plan) seem like logical ways to save for a home or for education because they are not taxed, your RRSP does offer two opportunities to withdraw money through the First-Time Home Buyers Plan and the Lifelong Learning Plan. This requires you to pay back the loan overtime giving you a chance to pay yourself back in the long run. The only thing lost is the gain on the money while it is not in your portfolio.

There is no right or wrong answer…

One of the problems with the outcome of the TFSA or RRSP debate is it seems like people have to make the choice between one or the other which really is not the case. Both the TFSA and the RRSP have merits and a place in your financial plan.  

Why can’t you have both?

Both the TFSA and the RRSP have strong financial benefits that are good for you. One way to invest in both the RRSP and the TFSA is to invest in the RRSP first and then use the tax refund to invest into the TFSA.  

An example:

You could invested $5,000 into an RRSP, or you could invest the entire $5,000 into the TFSA.

But should you?

What should you do?

Well if you invest $5,000 to the RRSP this will generate a tax savings based on your marginal tax rate. 

Let’s say the marginal tax rate is 30% (this marginal tax rate has been chosen for ease of calculation), that is equal to a tax savings of $1,500. Now take the $1,500 of tax savings and invest that return into a TFSA.

So now you have $6,500 invested into your portfolio from your original $5,000 that you invested in your RRSP. Most people in reality just spend the tax savings on a trip or something they want which is normal when you find free money. But why not take advantage of that free money to increase your future investment portfolio.

So, which is better? 

TFSA investments which grow TAX FREE, or RRSP investments which grow TAX DEFERRED. They both have their own merits in your portfolio and it depends on what you need out of each. Tax savings today which is important to most at tax time, or if tax savings is not a concern then would you would want tax-free growth for the future. Now you can see why there is a debate.

Why does one have to be better than the other?

Why can’t you have both? Well you can but you have understand what each represents in your investment portfolio.

The decision is yours to make choosing one or the other or even both make great wealth sense where your investment portfolio is concerned. Is the debate over? No! But now you have an understanding of the merits of each investment and how they work…

As always seek professional advice when creating a plan for the future. The value found in the advice given could provide a bigger pot of gold at the end of the rainbow.

It’s almost that time again! Taxes will be due soon enough…

It’s almost that time again! Taxes will be due soon enough…

A new year means new limits. Here’s a list of new financial planning data for 2021 (In case you want to compare this to past years, that data is included). Pensions, RRSP, TFSA, CPP, OSA, New Federal Tax Brackets.

Pension and RRSP contribution limits

  • The new limit for RRSPs for 2021 is 18% of the previous year’s earned income or $27,830 whichever is lower less the Pension Adjustment (PA).
  • The limit for Deferred Profit Sharing Plans is $14,605
  • The limit for Defined Contribution Pensions is $29,210

Remember that contributions made in January and February of 2021 can be used as a tax deduction for the 2020 tax year.

Tax YearIncome fromRRSP Maximum Limit

TFSA limits

  • The annual TFSA limit for 2021 is the same at $6,000.
  • The cumulative limit since 2009 is $75,500 (assuming you were over the age of 18 in 2009)

TFSA Limits for past years

YearAnnual LimitCumulative Limit

Contribution amounts for 2021

  • Employee contribution = 5.45% (up from 5.25% in 2020)
  • Employer contribution = 5.45% (up from 5.25% in 2020)
  • Self employment = 10.9% (up from 10.5% in 2020)
  • The maximum employer and employee contribution to the plan for 2021 will be $3,166.45 each and the maximum self-employed contribution will be $6,332.90. The maximums in 2020 were $2,898.00 and $5,796.00.
  • CPP Benefits
    • Yearly Maximum Pensionable Earning (YMPE) – $61,600
    • Maximum CPP Retirement Benefit – $1203.75 per month
    • Maximum CPP Disability benefit – $1413.66 per month
    • Maximum CPP Survivors Benefit
      • Under age 65 – $650.72
      • Over age 65 – $722.25

Reduction of CPP for early benefit – 0.6% for every month prior to age 65. At age 60, the reduction is 36%.


Old Age Security (OAS)

  • Maximum OAS – $615.37 per month
  • The OAS Clawback (recovery) starts at $79,845 of income. At $129,075 of income OAS will be fully clawed back.

OAS rates for past years:

YearMaximum Monthly BenefitMaximum Annual Benefit

New federal tax brackets

For 2021, the tax rates have changed.

Lower Income limitUpper Income limitMarginal Rate Rate



As we continue to move through Covid-19 as a society we are often reminded of the times when we could do things we wanted without circumstance. Since the middle of March or 266 days ago, we can now describe ourselves as living in a suppressed environment. As difficult as that has been for many, we must understand that even if our reality has changed during this time our outlook on life should not be broken. We will survive this and this too shall pass as we are a resilient society.

Knowing that with every passing day we are one step closer to understanding that we will not be able to celebrate Christmas with family and friends as we can already see the writing on the wall. The toughest part of this conversation is that someone else other than ourselves is making that decision for us. We must believe that these chosen officials are not trying intentionally to separate us from family on this special holiday as some would believe, but they are truly trying to keep us from having to endure any pain and suffering that would come from us failing to understand the severity of the circumstance if we fail to listen.

We already know there will be complaining. The only thing anybody should be complaining about is their health in this circumstance. Short of the death of a loved one, a terminal illness, or some other horrible tragedy, everything is controllable. If we’re in control of it, we have the ability to fix it. 

Where is the value in complaining? 

Instead of complaining about what could happen or when it does happen…Why not asses the situation, and find a solution. 

What if you could…

– Organize a catered dinner for loved ones who you cannot see this Holiday Season. 

– Create a Zoom, Google Chat, Face time, or just a simple phone call to create that festive moment with a cheer for the holiday season knowing that you will soon be able to get together as a family in a safer environment sometime in the future. Life is way too short to risk any lives because you fail understand why.

With this also comes with a lack of optimism about our future. There are a million reasons why not, but there is one good reason why, our future is bright we just have to persevere and understand there is a light at the end of the tunnel.

No matter what happens, we have to keep going we have a choice. We have come this far and yes; we are tired of not being able to do what we have done in the past. But isn’t this where the optimism lives knowing we will one day rise above this to return to what we know. If we truly believe as a society that we can do it no matter what, we’ve got this. The only reason we might bring up any excuses about the future is because you don’t believe there will be one. Do not let that kind of thinking ever get in the way of our success because we already know this, we are resilient and we will persevere. Many things have stood in the way of our success lately and we have found a way to move forward to this point in time. So, don’t give up now as this too shall soon pass!

To be able to get through this holiday season, We, need to have optimism. Every day is hard, and we all have to fight to win.

To that I say Happy Holidays and a Merry Christmas to all! So long 2020 and bring on 2021 I’m ready!

Lest we forget! Thank you to all that served and continue to serve our great country.

Lest we forget!  Thank you to all that served and continue to serve our great country.

Thank you for all that served our country, giving us the freedom we enjoy today. Thank you to all that continue to serve our country and put themselves in harm’s way to protect us from what the world has become.

I leave you with this poem below… a tribute to the fallen soldier.
The GreatWar 1914-1918
In Flanders Fields
Flanders Poppy on the First World War battlefields.
by John McCrae, May 1915

In Flanders fields the poppies blow
Between the crosses, row on row,
That mark our place; and in the sky
The larks, still bravely singing, fly
Scarce heard amid the guns below.

We are the Dead. Short days ago
We lived, felt dawn, saw sunset glow,
Loved and were loved, and now we lie
In Flanders fields.

Take up our quarrel with the foe:
To you from failing hands we throw
The torch; be yours to hold it high.
If ye break faith with us who die
We shall not sleep, though poppies grow
In Flanders fields. Lest we forget.

One of the Biggest Assets in your life requires proper coverage.


  1.  You have two life insurance options after securing your mortgage: insuring through the creditor or insuring through a life insurance company.
  2. Mortgage insurance is convenient, but the benefit is limited to the amount owing on the mortgage and is paid directly to the creditor and not your family.
  3. Life insurance is paid to your beneficiary and your coverage won’t decrease as your mortgage is paid down.
  4.  If you buy a bigger home, increasing your insurance coverage may be a smart choice.

Henley Financial and Wealth Management can provide expert guidance on both of these options.
When you buy a home, you need a way to help protect yourself and your family’s financial security, no matter what happens.

Your bank/lending institution will talk to you about mortgage insurance (also called creditor insurance) when you finance your house. You wil be told about the importance of this product for your mortgage. What it means…if you die, your mortgage with the lender is paid out, which is how the lender protects the institution if something should happen to you.

But what happens to your family if they don’t payout the mortgage because the death did not pass the underwriter approval after the fact. What you receive from the lender for your premium is a credit certificate not an actual insurance policy. After death, the credit certificate is sent to the insurer for underwriting at which time the underwriter will decide if the insured qualified for insurance. One of two scenarios will happen: the lender will payout the mortgage or refund the premiums. If its the latter it is because the insured did not qualify for insurance due to circumstance before death.

Is having mortgage insurance/credit insurance from your lender the best option for you?

If you want to protect more than just your home, individual insurance will better suit your needs. Individual insurance generally provides more control, options and benefits to help you financially protect what matters most. Underwriting is done at the time of application and an insurance policy is issued if you qualify. When the insured dies the benefactor can choose to payout the mortgage, use the money for the families individual needs or do both.

By comparing Mortgage Insurance and Individual Life Insurance, you ensure you’re giving yourself and your family the type of insurance protection that meets your personal needs and just protecting the lender.

Build a financial security plan that will help protect your mortgage and what matters most in your life.


How to win using annuities in retirement

How to win using annuities in retirement


In this underused strategy, weigh your age and interest rates, then get the timing right.

by Jonathan Chevreau

November, 2016

Presented by: Henley Financial & Wealth Management , If you would like a detailed explantion of how this could work for you please feel free to contact Winston L. Cook

The good news is most of us can expect to live longer. The bad news is that the decline of defined-benefit pensions, along with chronically low interest rates, makes it harder for us to avoid outliving our money.

For those without workplace defined-benefit pensions, annuities can offset that risk by acting as a form of longevity insurance. You hand over capital to an insurance company today in exchange for a guaranteed flow of income for as long as you live. In a real sense a DB pension, with its guaranteed payouts, is annuity-like. As are programs like the Canada Pension Plan (CPP) or Old Age Security (OAS).

Despite similar terminology, defined-contribution pensions, RRSPs, TFSAs, and non-registered savings are not real pensions, cautions Schulich School of Business finance professor Moshe Milevsky. While those vehicles will help out in retirement, the only way you can create a real guaranteed income for life is to annuitize, he explains in the second edition of Pensionize Your Nest Egg.

Nevertheless, annuities are underutilized because they are misunderstood or viewed as undesirable. Yet, new “fintech” alternatives may do the same thing as annuities, only using terms such as peer-to-peer longevity insurance or investment funds with longevity insurance.


Milevsky argues that even at today’s rock-bottom interest rates, annuities should pay more than comparable fixed-income investments because of the built-in mortality credits. “Anyone who bought an annuity five years ago is very happy,” Milevsky says.

He adds: “Everyone should have a source of income that’s predictable, inflation-adjusted and will last for the rest of their lives.” The trick is knowing when to annuitize. The longer you wait, the more you receive on a monthly basis. Milevsky’s rule of thumb is to annuitize when the death rate exceeds the interest rate. For example, relatively few die by 65, so the death rate is under 1%; buy an annuity now and it will give you little more than current interest rates. Wait until your mid-70s and the death rate starts to rise. That’s when annuities start to look much better.

This question often arises the year a retiree turns 71 and is forced to convert an RRSP into a Registered Retirement Income Fund (RRIF) or an annuity. Fee-only planner Marie Engen, co-owner of Boomer & Echo, says this is not an either/or case. You probably should do both, particularly as you move into your 70s and 80s. Ideally, she says, pensions and annuities will cover basic retirement expenses, leaving the rest for investment growth and more liquid access to money for more enjoyable lifestyle expenses.

For healthy males, Milevsky suggests annuitizing between 70 and 80, adding 5% or 10% more each year, until you’re almost entirely annuitized between ages 80 and 95. Because spouses and children can be impacted, the whole family needs to join the conversation, particularly since capital that has been annuitized can’t be converted back. That means your heirs will inherit little or none of what is annuitized.




Keep in mind the distinction between registered and non-registered annuities. Payments from registered annuities are fully taxable like RRIFs and, on death, heirs will be taxed based on a same-day valuation. According to Ivon Hughes of Montreal-based LifeAnnuities.com, a healthy 65-year-old male not wanting a guarantee period would get $531.49 monthly income from a $100,000 registered annuity. At age 71 this income rises to $636.34, and at age 80, he’ll get $946.76.

With non-registered “prescribed annuities” the interest paid out is taxable but not the return of capital. Keep in mind, the Canada Revenue Agency is updating its mortality tables and increasing the taxable portion—people are living longer. That makes annuitizing with registered funds more attractive, Milevsky says. A $100,000 non-registered annuity without a guarantee period pays out $509.97 at 65, $606.12 if acquired at 71, and $789.03 at age 80.

Milevsky favours plain-vanilla annuities and cautions against buying too many bells and whistles: every time you add guarantees, minimums, and survivorship benefits, you water down the mortality credits.