A professional network can guide you through the tax maze
With the continuing flow of changes to the tax system, preparing an annual return and developing a long-term financial/tax strategy are becoming increasingly daunting tasks for the average Canadian taxpayer.
“In recent years with all the changes to the income tax system — things like the TFSA and income splitting — and as people get busier and busier, they are starting to throw their hands up in the air,” says Cliff Steele, a financial adviser with Sun Life Financial Canada in Waterloo, Ont. “It’s becoming increasingly important to have a strong professional network to make sure you are taking advantage of all the credits and tools and programs at your disposal to get the maximum benefit and make sure everything is done correctly.”
Studies clearly show that having advisers at your side can keep you on track with your affairs and reduce the stress associated with change and market volatility.
Studies have found that people who have a comprehensive financial plan are more likely to feel they are on track with their financial affairs than those who do limited or no planning, and that Canadians who work with a financial adviser generally worry less about their financial nest egg providing for them throughout retirement than those who do not work with one.
A recent Sun Life report on retirement showed that today’s retirees have a good understanding of the value of professional financial advice, with 62 per cent who work with an adviser saying they have saved enough for their retirement compared to only 38 per cent who don’t work with an adviser.
“A proper network can really bring big value by making sure that you’re not concentrating too much on one area of your affairs such as insurance, taxes or investments,” says Steele. “If you should get a letter from the Canada Revenue Agency to say you’re being audited your advisers can handle it, which not only can save you a lot of time and stress but also could save you some money as well.”
Many Canadians will use many of the tax preparation software programs that are on the market to help them prepare their returns.
“If your tax situation is simple, they can be effective but they tend only to ‘dabble’ in any sort of long-term planning,” Steele says. “It’s just not the same as having a financial adviser and/or accountant who can look at your plan from a holistic approach.”
Many financial advisers can recommend an accountant if you don’t have one and may also be able to suggest legal help if necessary for estate planning purposes.
Some recent studies over the last few years indicate that about half to two-thirds of Canadians don’t have a will.
Wills not only describe the distribution of your assets and possessions, they allow you to make key appointments including an executor, who takes care of your affairs on your behalf when you are incapacitated or gone.
If you die without a will your estate goes to probate and the courts will decide how to split up your assets. It can take anywhere up to two years to probate a will and process an estate.
Generally, people with plans feel better about being able to live life today and have a higher level of well-being, overall contentment and sense of achievement. Making plans based on professional advice can help you avoid mistakes and support you in making decisions based on fact, not fear, and ensure you have the proper strategies you need to live an enjoyable and rewarding life in retirement.
Talbot Boggs is a Toronto-based business communications professional who has worked with national news organizations, magazines and corporations in the finance, retail, manufacturing and other industrial sectors.
Copyright 2017 Talbot Boggs
Talbot Boggs , The Canadian Press
Edited on 30 March 2017