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Seniors fastest growing risk group for insolvency

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A speedometer with needle plunging down past word Bankrupt

By Jonathan Chevreau

Financial Independence Hub

While this website is devoted to Financial Independence, it’s an unfortunate fact that many people in all age brackets are so far from Findependence as to be under water financially.

Today a report entitled Joe Debtor: Marginalized by Debt is being released by Kitchener, Ont.-bankruptcy trustees Hoyes Michalos.

Among the many disturbing findings are the fact that seniors continue to be the fastest growing risk group when it comes to debt. The 2015 study shows insolvency filings by debtors over age 49 rose 30%, compared to a 27% rise in the 2013 study. The single biggest age group for insolvency is the 40s, where 28% of Canadian insolvencies occur. But those in their 50s account for 20%, those in their 60s 8% and 70-plus 3%.

DougHoyesCanadaTrustee
Doug Hoyes

In the report, Doug Hoyes writes that older Canadians are carrying debt into retirement because of debt accumulated over time to pay for living costs, family needs and medical bills, additional borrowing to keep up with post-retirement mortgages and the financial cost of carrying unsecured debt into retirement as income drops; and tax obligations from extra earned income and pension withdrawals. Continue Reading…

How parents can give their children the gift of future Financial Independence

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Two Red Christmas Balls with Blank Embossed PaperFriday’s post on how Hub readers are generally embracing the $4,500 TFSA expansion promised we’d run one particular letter in full on Sunday.

Below is the letter referred to.  The parents in question gave this letter to their three children at Christmas of 2011, just a few years after Tax-free Savings Accounts were launched. They gave us permission to run it, in the hopes that other families could benefit from the ideas, which include parental matching of whatever savings the kids can come up with to fund their TFSAs.

Merry Christmas    2011

 Name  of Child here _____________________                    

This Christmas and future Christmases Mom and I wish to help you to start planning and working towards your long term financial goals/security. We realize that as responsible young adults you use your financial resources to meet your everyday fixed/living expenses and that with your busy lifestyles you do not always have the time to manage/consider long term financial planning. Continue Reading…

Weekly wrap; Getting Financially Real, Post-budget politics, 50 top financial sites

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2015-carnivalA group of (mostly American) financial blogs and a few international ones have teamed up to create We are Financially Real, part of the 2015 Financial Literacy Awareness Carnival.

It’s hosted by Los Angeles-based Certified Financial Planner Shannon Ryan and her website, The Heavy Purse.

As you can see via this link, there’s a nice list of financial blogs participating, including Broke Millennial and its post, The Day I Got Bullish With Money, and many more from blogs like Club Thrifty, Color Me Frugal, Financially Blonde and Reach Financial Independence (now there’s a blog title we can relate to!)

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Shannon Ryan, CFP

“For the past three years, it’s been my privilege to host a Financial Literacy Awareness Carnival where I gather top finance bloggers to share their stories and motivate readers to become financially literate,” Shannon told the Hub via email, “Money is something every single adult handles, and too few make confident money decisions due to a lack of financial literacy. The mistakes they make, sometimes without even realizing it, have a lasting impact. It’s my hope through the carnival that we inspire readers to get Financially Real with their lives and reclaim their financial power.”

Budget Redux Continue Reading…

Hub readers embrace Budget’s $4,500 expansion of TFSA limits

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Vector illustration of Man and woman avatars

By Jonathan Chevreau

Following last week’s federal budget, the Hub ran a piece making the case for immediately topping up annual contributions for Tax-free Savings Accounts (TFSA) from the existing maximum $5,500 to the proposed $10,000.

As we later reported in our weekly media roundup on Saturday, the Canada Revenue Agency and most major banks had by the end of the week confirmed it should be okay to make those contributions now, without having to wait for formal legislation later in the summer.

At the end of the earlier piece, I asked readers for comments. We reproduce them below, using initials where we’ve not gotten permission to use actual names.

We’ll start with Brad A:

Really appreciate your articles on TFSAs. I only make 25K a year & love TFSAs.  This whole talk about future lost revenue makes me cringe because there are many other loopholes/tax shelters that also create future lost revenue … principal residence real estate being just one.  Don’t get me started on subsidies for medical or business expenses etc. etc.  Having said this though, I’ve had enough trouble with Revenue Canada, that any time I get a brown envelope in the mail, my heart starts to pound.  So, for now, I’ll probably play the waiting game on the extra $4,500.  I don’t normally vote conservative but this election it’s going to be tempting because my TFSAs & RRSPs are about the only thing that will keep me out of poverty when I’m older.
Continue Reading…

Unified & Defined: finally, some plain-English definitions for financial planners

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Here’s my latest MoneySense blog, which looks at a new book that provides unambiguous definitions of common terms like financial planning. Click on The New Definition of Financial Planner for the MoneySense blog.

Below is a guest post by Cary List himself, president and CEO of the Financial Planning Standards Council (FPSC). We thought we’d give Hub readers the take on the new book right from the horse’s mouth!

Unified & Defined: Let the Canadian Financial Planning Definitions, Standards & Competencies Be Your Guide to Sourcing the Right Professional

By Cary List, CA, CPA, CFP®

President & CEO, Financial Planning Standards Council

Special to the Financial Independence Hub

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Cary List, FPSC

Studies have clearly demonstrated that Canadians are not getting the financial help they need from qualified, professional financial planners. This is partially the result of a lack of understanding of how to identify a qualified financial planner and of what they should expect of a financial planner and/or a financial plan.

Today’s unregulated financial planning environment leaves many of us vulnerable and at risk of receiving advice from individuals who call themselves financial planners but who have not had to attain any qualifications specific to the financial planning practice and who are not held accountable to any oversight body related to the financial planning advice they offer.

Anyone outside Quebec can still call themselves a financial planner

Continue Reading…