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W H AT ’ S Y O U R

Motivation?Stories to inspire, strategies to help you achieve your goals

F O R F I N A N C I A L P L A N N I N GM

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WINTER 2015/2016

“ It takes as much energy to wish as it does to plan.”

E L E A N O R R O O S E V E LT

“ There is more satisfaction in rational saving, than in irrational spending.”

P. T. B A R N U M

“ Your task is not to foresee the future, but to enable it.”

A N T O I N E D E S A I N T- E X U P É RY

“ Let no feeling of discouragement prey uponyou, and in the end youare sure to succeed.”

A B R A H A M L I N C O L N

“ Beware of little expenses; a small leak will sink a great ship.”

B E N J A M I N F R A N K L I N

Successful financial planning often involves hard work and tough choices – but it’s worth it. As you collaborate with your advisor to reach your goals, consider these quotations that stand the test of time.

WISE WORDS TO

INSPIRE YOU

DOES YOUR FINANCIAL MOTIVATION NEED A BOOST?

I AM AN AVID RUNNER and it is an activity that brings many benefits to my life. It is energizing and challenging. It nurtures my competitive spirit and helps keep me healthy. In a previous issue, I wrote about how my “formula for success” for running my first marathon was similar to how we achieve many goals in life. One important part of that formula is motivation.

Although motivation can be powerful, it can be difficult to maintain over time. Having a positive mindset helps, but sometimes it takes more than that to stay inspired and driven. While I was training for the marathon, hitting

important milestones within my fitness program gave a huge boost to my motivation. My trainer taught me to set these realistic short-term objectives to help propel me to my ultimate goal.

Financial planning is based on the same principle. Having long-term goals can be difficult and demotivating, as we still want to enjoy life today while we are saving for the future. Celebrating small milestones along the way will provide the motivational fuel we need to keep up.

Developing a plan with your advisor will allow you to not only determine realistic objectives, but also feel more confident about managing your financial success now and in the future.1

I hope you’ll get inspired by some of the stories in this edition of Solutions magazine, and discover strategies to help drive your financial motivation. Be sure to contact your advisor to help you map out your financial journey and set realistic goals along the way.

Take care,

Paul Lorentz

Executive Vice-President and General ManagerRetail MarketsManulife

1 Financial Planning Standards Council, The Value of Financial Planning, 2013.

FEATURE

22 I Take charge of saving in your 40s

There’s no time like the present to get serious about finances – so start implementing a plan

to achieve your goals for the future.

FINANCIAL MATTERS

8 I Southern exposure

Consider these factors before buying a U.S. property.

11 I Make the most of your RRSP

Tap into your RRSP’s full potential with these six tips.

12 I A penny saved…

When it comes to squirrelling away money, a little strategy can go a long way.

IN EVERY ISSUE

6 I MATTERS OF FACT

A collection of timely tidbits, fun facts and clever conversation starters.

19 I TALKING ABOUT MONEY The last taboo

Why it’s time to talk about money.

28 I SMALL BUSINESS You’ve made your mark – but how do you sustain it?

Positioning established businesses for long-term success.

30 I SMALL BUSINESS Small businesses share their insights

These two companies are charting their own courses towards success.

32 I TAX CORNER Being tax-savvy has advantages

Keep these deductions and credits in your back pocket to help lower your tax bill.

36 I TRAVEL Fun in the snow

Embrace winter with a made-in-Canada vacation.

40 I HEALTH, FUN AND FOOD Flu-fighting foods; Chocolate flu-fighter;

Spot the difference puzzle.

WHAT’S INSIDESOLUT IONS FOR F INANCIAL PLANNING

WINTER 2015/2016

15 I Self-employment – with benefits

Health and dental insurance helps to protect your business’s most important asset: you.

16 I Under pressure

Money worries are never far from mind – but did you know they can also affect your health?

20 I Protecting what you work for

Safeguard your family’s lifestyle with insurance.

SOLUTIONS for financial planning6

7.92 METRESSt. John’s, Newfoundland, is

the fourth-snowiest city in the

world. An average of 3.32 metres

of the white stuff tumbles down

onto lively George Street every

year. But three cities in Japan

top that. Residents of the

snowiest of all, Aomori, have

to dig themselves out of an

average of 7.92 metres of snow

annually.2 Impressively, snow

removal teams at Aomori Airport

are so efficient that flights have

never been cancelled there

due to accumulated snow on

the runways.3

CHINESE PLUM BLOSSOMShave come to symbolize resilience

and perseverance in the face of

adversity because they unfurl their

petals in splashes of white, pink,

red, purple and light green while

snow still covers the ground. Today,

there are more than 300 cultivated

strains, and plum blossoms also

bloom in countless Chinese

paintings and poems.1

Grand Falls, New Brunswick,

was home to THE LARGEST

DOME IGLOO EVER BUILT.

With an internal diameter of

9.2 metres and an internal

height of 5.3 metres, it was

constructed of 2,500 ice blocks

and completed on February 19,

2011.4 About 40 volunteers

built the igloo over a period

of two weeks. It could hold

approximately 300 people.5

WHERE DO CANADIANS GO

to escape the winter? Nine

of the ten most popular destinations

are in the United States,

according to a list compiled by

FlightNetwork.com, with Fort

Lauderdale, Las Vegas and Orlando

topping the list.6 Canadians made

nearly three million overnight

trips to the United States in

January and February 2015.7

Think it’s cold outside where you are? The coldest temperature ever recorded by

ground measurements on Earth was –89.2 Celsius. To experience it, you had to be in Vostok, Antarctica, on July 21,

1983.10 Amazingly, about a dozen hardy scientists and engineers continue to endure Antarctic winters there.11

1 SEPTILLION That’s a one

followed by 24 zeros, and it’s

approximately the number of snow

crystals that fall to earth every year.8 Snow

crystals group together to form snowflakes.

Some are small. Some are bigger. And some are absolutely

massive. During an 1887 snowstorm in Fort Keogh, Montana,

a snowflake 38 centimetres wide and 20 centimetres thick

reportedly drifted to the ground.9

–89.2 CELSIUS

c

Matters of fact A collection of timely tidbits, fun facts and clever conversation starters.

7WINTER 2015/2016

Every year, Canadians fail to use about

41 million vacation days.13 The top

reason? In one recent study, four in ten

respondents said they can’t afford it.14

But can we afford not to take the

vacation time we’re entitled to? Here

are two compelling benefits of taking

time away from work:

Health and well-being improve rapidly

during a vacation, with the positive

effects peaking on day eight15

Heart disease risk drops for people

who take vacations every year; in fact,

the Framingham Heart Study found

a 30 per cent increase in heart attacks

among men who skipped their

vacations for several years16

So check how many vacation days you

have banked, and then plan to use

them. Whether you arrange a big family

trip or a staycation in your own town,

your body and mind will thank you.

Are you leaving vacation days on the table?

1 www.chinaonlinemuseum.com/painting-plum-blossom.php 2 www.accuweather.com/en/weather-news/top-10-snowiest-major-cities-a/23760437 3 aomori.showcase.japantimes.co.jp/

news/?key=aomori3 4 www.guinnessworldrecords.com/world-records/largest-dome-igloo-(ice) 5 www.cbc.ca/news/canada/new-brunswick/igloo-makers-in-n-b-hope-to-ice-world-

mark-1.1059723 6 www.flightnetwork.com/blog/top-14-winter-destinations-canadians 7 en-corporate.canada.travel/sites/default/files/pdf/Research/Stats-figures/International-visitor-arrivals/

Tourism-monthly-snapshot/tourismsnapshot_2015_02_eng.pdf 8 www.mi-sci.org/2013/12/18/chilling-facts-about-snow 9 www.historyandheadlines.com/january-28-1887-worlds-largest-

snowflake-falls/ 10 wmo.asu.edu/antarctica-lowest-temperature 11 basementgeographer.com/a-glance-at-the-human-population-of-antarctica/ 12 www.ncbi.nlm.nih.gov/pubmed/8902007 13 www.hrmonline.ca/hr-news/loselose-unused-vacation-days-cost-everyone-123673.aspx 14 business.financialpost.com/personal-finance/nay-cation-why-canadians-are-leaving-vacation-days-

on-the-table 15 link.springer.com/article/10.1007%2Fs10902-012-9345-3 16 www.fastcompany.com/3029043/work-smart/why-not-using-all-of-your-vacation-time-is-hazardous-to-your-health

Three winter pick-me-upsIt’s cold. It’s snowy. The sun rises late and sets early. Need

something to boost your spirits? Try these tips:

Brighten your home. Open curtains and trim vines and

branches from around windows, move your favourite chair closer

to the window and pop a vibrant bouquet of flowers in a vase.

Give winter a soundtrack. Play upbeat melodies and tropical

tunes and, even better, dance to your favourite music.

Go for a walk. Head outside for fresh air or, as one preliminary

study12 suggests, exercise under bright lights to help beat the

winter blues.

FINANCIAL MATTERS

Southern exposure IF YOU’VE EVER BEEN STUCK SCRAPING ICE off your car when it’s 20 below, you’ve probably dreamed about heading south to a sunnier spot. Little wonder that Canadians make up 14 per cent of international homebuyers in the United States.1 One of the draws for Canadian buyers in the past few years has been price: in the wake of the subprime mortgage crisis, U.S. property prices plunged 60 per cent in some places.2

But low prices aren’t the only thing that attracts Canadians to acquire property south of the border. The United States boasts some of the best beaches, vineyards and ski hills in the world. Having a place of your own to visit year after year, perhaps with room for family and friends, can be an alluring idea. You may even be able to turn your vacation home into a successful rental.

If you are thinking of buying real estate in the land of the free, there are a few things to consider.

Length of your stayResidency laws may affect your plans to spend the greater part of the year at your new abode. The U.S. Internal Revenue Service (IRS) states that Canadians are allowed in the country for 182 days per year before they have to file a U.S. tax return. A better measure, however, is the IRS’s “substantial presence” test, which is based on the number

Consider these factors

before buying

a U.S. property.

1 2015 Profile of Home Buying Activity of International Clients. www.realtor.org/reports/profile-of-international-home-buying-activity 2 www.economist.com/news/united-states/21601296-lack-supply-means-americas-lofty-house-prices-are-unlikely-fall-far-buy-now-or

9WINTER 2015/2016


of days spent in the United States during the current year and the two years before that. The formula works out to about 120 allowable days per year over a three-year period.3 Go over that and you risk paying U.S. tax on your income. Just as importantly, too much time outside of your home province can jeopardize your health care coverage. Carefully plan and keep track of how much time you spend in the States.

Paying for itThirty-nine per cent of Canadians buying U.S. property take out a mortgage, but dealing with a U.S. lender can be a bit tricky. For Canadian buyers, some low mortgage rates won’t typically be available because U.S. banks don’t recognize your credit history outside the country.4

You may be able to obtain a mortgage through a Canadian financial institution. Alternatively, you could

opt to purchase the property outright by taking out a line of credit or home equity line of credit on your primary residence in Canada. Speak with your bank or mortgage professional to determine your best financing option.

You’ll also need to plan for all-in costs: title search and insurance, legal fees, real estate agent and transfer fees can add up. They vary from state to state, but these expenses can amount to anywhere between 1 and 2.5 per cent of the total purchase price.5

TaxesProperty taxes vary depending which state you’re looking at – Florida, for example, has higher property tax rates for non-residents.6

If you’re thinking of renting out your property, keep in mind that your rental income must be included on your Canadian tax return. You may also have to file a U.S. tax return or pay withholding taxes.

Should you decide to sell, you’ll pay tax as well. If you turn a profit, your gain is taxable in Canada. This gain is also taxable in the United States; however, the U.S. tax paid generates a foreign tax credit that may partially offset the Canadian tax payable.7

Consult with a tax advisor who specializes in U.S. and cross-border tax issues for more information.8

Being protectedHome insurance is essential in case something happens to your property or to a tenant. Be sure to review the coverage details, keeping in mind location-specific risks such as hurricanes and termites. For further peace of mind, you may also want to hire a property management firm to maintain and check in on your home while you are away.

Also, don’t forget travel medical insurance. U.S. health care can be costly, and your provincial or territorial plan will cover only a fraction of the expenses if you get sick or hurt while abroad.

Get advice Speak with your advisor to see if a U.S. property purchase fits into your financial plan, and then enlist the help of a qualified real estate agent, lawyer and accountant. These professionals can help you navigate the ins and outs of buying property south of the border. With the right support, you can be on your way to purchasing your own piece of paradise stateside.

3 www.irs.gov/Individuals/International-Taxpayers/Substantial-Presence-Test 4 business.financialpost.com/personal-finance/mortgages-real-estate/want-to-buy-property-in-the-u-s-read-this-first5 www.globalpropertyguide.com/North-America/United-States/Buying-Guide 6 www.thestar.com/business/personal_finance/retirement/2011/12/06/thinking_about_us_property_buyer_beware.html7 www.taxplanningguide.ca/tax-planning-guide/section-2-individuals/us-real-estate-owned-canadian-residents/ 8 Canadians who die owning U.S. property could be subject to U.S. estate tax depending on factors such as the size of their U.S. holdings and the size of their overall estate. A tax advisor who specializes in U.S. and cross-border tax issues can provide the appropriate advice.

This article is for information purposes only and is not intended to provide specific financial, investment, tax, legal, accounting or other advice, and should not be relied upon in that regard. Individuals should not act or rely on the information without seeking the advice of a professional in order to ensure any action taken with respect to this information is appropriate to their specific situation.

California

Arizona

Texas

Florida

•

•

•

•

TOP 4 U.S. STATES FOR FOREIGN HOMEBUYERS

Source: 2015 Profile of Home Buying Activity of International Clients. www.realtor.org/reports/profile-of-international-home-buying-activity

11WINTER 2015/2016

CONTRIBUTING TO A REGISTERED

Retirement Savings Plan (RRSP) is one of the most effective ways for Canadians to save for retirement. If an RRSP is part of your investment plan, here are some valuable suggestions you can take advantage of:

1. Make it automatic With a biweekly or monthly pre-authorized plan, you can avoid the rush before the contribution deadline and benefit from tax-deferred growth on your contributions throughout the year.

If your workplace offers a group RRSP, sign up. Contributions can be deducted before calculating payroll taxes, lowering the taxes withheld from your paycheque. Some employers also match contributions.

2. Contribute more during peak earning yearsIf you are in a high tax bracket, consider maximizing your contributions to benefit from the tax deduction. Plan to withdraw in retirement when your income and tax rate are likely to be lower.

3. Consider an RRSP loan1 If you have excess RRSP contribution room, you may want to consider an RRSP loan so you can make a larger contribution to your RRSP during the first 60 days of the year. You then use your tax refund to repay some or all of your loan. The result is more money working for you sooner.

4. Consider making your contribution to a spousal RRSPA spousal RRSP is an RRSP that is opened by your spouse or common- law partner, but that you contribute to – and you get the tax deduction. When your spouse or common-law partner withdraws the money, he or she pays any taxes due, as long as your most recent spousal contribution wasn’t made this year or in either of the previous two years. This income-splitting strategy can save your household taxes before and after retirement.

5. Top up whenever you canThink about contributing raises, bonuses, tax refunds and extra cash flow after you pay down a debt. At the very least, boost your annual contributions by the inflation rate.

6. Plan for more than retirementYou can borrow funds from your RRSP to buy a qualifying home through the Home Buyers’ Plan or to pay for qualifying educational programs through the Lifelong Learning Plan. You do not have to pay tax on these withdrawals as long as you repay the money to your RRSP according to a set schedule.

Talk to your advisor about whether you’re taking full advantage of your RRSP, and regularly review your RRSP contributions and investments to ensure you’re on track for a comfortable retirement.

FINANCIAL MATTERS

1 Borrowing to invest in an RRSP may not be appropriate for everyone. You will need the financial means to meet your loan obligations in full. Talk to your advisor to find out more about the advantages and obligations of borrowing to invest.

Make the most of your RRSPTap into your RRSP’s full potential with these six tips.

FINANCIAL MATTERS

A penny saved...DO YOU REMEMBER THE EXCITEMENT of being a kid on allowance day? Whether dashing to the corner store for treats or carefully saving that money for something special, those were some of our first experiences with saving our money and planning our spending.

Today we still look forward to payday, but after paying the bills, stocking the fridge and saving for retirement, what’s left for fun? That’s where a short-term savings strategy comes in – to help us set money aside for things like a family trip or a new laptop. Here are four easy ways to help boost your short-term savings.

1. Set a definite goal It’s easier to be a successful saver if you have a clear plan. “I’m going to save $250 every month starting now. In a year, I’ll have $3,000 for my summer vacation,” says one colleague over lunch. Compare that to her friend, who says, “I’d love to go somewhere warm next winter. If I have money left over at the end of the month, I sometimes put it aside.” It’s clear which friend has a better chance of meeting her vacation objective. The key is to set a specific goal: define what you’re saving for, when you want to achieve your goal and how much you’ll need to put aside on a regular basis in order to be successful.

2. Pay yourself first This mantra is just as effective for creating a sound short-term savings plan as it is for long-term financial milestones. Set up a separate savings account and deposit a set portion of your pay each period – before you find yourself meandering through a lunch-hour sidewalk

When it comes to

squirrelling away money,

a little strategy can

go a long way.

13WINTER 2015/2016

sale or being tempted by the newest smartphone at the mall. How much should you set aside? That depends on your goal.

3. AutomateAnother tried-and-true tactic that adds discipline to your good intentions is to put automatic savings mechanisms in place. Pre-authorized transfers – typically from a chequing account to a savings account – do the work for you. Choose your payment amount and frequency, then watch your savings accumulate.

4. Review your spending habits Takeout food, shoes, techie gadgets. You don’t have to give up these items, but it’s important to plan your purchases ahead of time. Take 20 minutes to review your expenses

from the past few months. Separate essential items like your mortgage/rent, car payments and utility bills from more optional spending, such as dining out, entertainment and clothing. Understanding what you’re spending on non-essential items can help you direct your extra money towards the things you value most.

Getting startedWhen deciding where to house your short-term savings, you’ll likely want to choose a solution that provides a guaranteed return and convenient access to your money, such as a high-interest savings account. Your advisor can help you determine the best strategy for your needs. With a plan in place, you’ll be a step closer to achieving your savings goals.

CHOOSING THE RIGHT SAVINGS ACCOUNT All savings accounts are not

created equal. Make sure you have

the right features for the purpose

of your savings plan. Here are a

few questions to ask when you’re

shopping around:

How does the interest rate

compare to the market?

Do I have to maintain a

minimum balance?

Are there fees for making

deposits or withdrawals?


ACTUAL COST vs. TRUE COST Need extra motivation to save? Consider

the true cost of putting your purchase on

credit. In the example of the colleagues

who want to take vacations, the second

friend does not manage to set aside the

funds ahead of her trip. She decides to

charge the vacation to her credit card

instead, intending to pay for it over the

next few months. Once she returns home,

however, other expenses quickly arise and

it takes over a year to pay off the trip.

Actual cost of vacation

$3,000

Interest paidInterest rate: 19.99%

Monthly payment: $250

Number of months to pay: 14

$374.75

True cost of vacation$3,374.75

For illustration purposes only.

15

FINANCIAL MATTERS

CANADIANS ARE INCREASINGLY turning to self-employment as their means of earning a living. Over the past 25 years, the number of self-employed people in this country has risen from 1.8 million to 2.7 million.1 In March 2015, more than 15 per cent of working Canadians worked for themselves.2

Being your own boss comes with many benefits, including the freedom to manage your own schedule and make final business decisions. Self-employment doesn’t, however, come with “benefits” – such as paid vacation time, a retirement plan and a health and dental plan.

It can be a trade-off. Self-employed Canadians often save up for their vacations, invest towards their

retirement and hope with fingers crossed that their out-of-pocket health and dental costs stay manageable. However, solutions are available to help people in this situation get the health benefits they need.

Plan for routine costs and unexpected expenses

For some self-employed people, purchasing individual health and dental insurance may be a good way to cover routine costs that fall outside provincial health plans. Every year, many Canadians spend hundreds of dollars on dental visits, eye care, prescriptions and services such as massage therapy and physiotherapy. According to a 2013 Statistics Canada

report, the average Canadian household spent about $1,662 annually on direct health care costs.3

Perhaps even more importantly, the right package can help provide protection from the financial impact of unexpected expenses. You may need dental surgery. A child may need braces. A family member may require ambulance, home care or nursing services.

Having health and dental benefits in place that meet your needs can go a long way to help alleviate the stress of unexpected expenses. When choosing coverage, look for:

Affordable rates that fit comfortably into your monthly budgetA customizable plan that lets you choose different optionsEasy claims processing so you don’t have to deal with more paperwork

Speak with your advisorBeing self-employed doesn’t mean you have to do without health and dental benefits. Talk to your advisor about what’s available, what it covers and what it costs. You may be pleasantly surprised by the price of a package that provides effective protection for yourself and your family.

Individual health and dental insurance is a safety net – reassuring every day, and important in a crisis. It’s a valuable “perk” to add to the others more commonly associated with the freedom of self-employment.

Self-employment – with benefits Health and dental insurance helps to protect your business’s most important asset: you.

WINTER 2015/2016

1 Source: Statistics Canada, Self-employment, historical summary. www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/labor64-eng.htm, accessed June 2015. Reproduced and distributed on an “as is” basis with the permission of Statistics Canada. 2 www.statcan.gc.ca/pub/71-001-x/71-001-x2015003-eng.pdf 3 www5.statcan.gc.ca/cansim/a26?lang=eng&id=2030021

WINTER 2015/2016 17

FINANCIAL MATTERS

Under pressure WHETHER IT’S A LOOMING DEADLINE at work or a race to get out the door on time, we all get stressed sometimes. But too much stress can be overwhelming – and according to the Canadian Mental Health Association, chronic stress can have an impact on our lives. Being stressed out affects our ability to concentrate and our self-confidence. It can even lead to sleep difficulties, headaches and more frequent illness.1

While plenty of things in life may cause us to feel stressed, one of the biggest culprits is money. According to a national survey by the Financial Planning Standards Council, 42 per cent of Canadians now rank finances as their number-one source of stress.2 That’s not surprising when you consider how financially stretched we are. As we work to save for retirement and pay for our kids’ education, we’re also dealing with more debt than ever before. For the first time, Canada’s consumer-debt-to-income ratio (total household debt compared to disposable income) topped 163.3 per cent3 in 2014 as we take on debt to pay for homes, cars and vacations.

And these money worries can also affect our health. A recent study4 shows that financial stress can take a toll on our mental and physical well-being – and even affect us on the job. Here are a few key findings:

76 per cent of those who report high stress levels say the state of their finances is partly or entirely to blame.

Money worries are never

far from mind – but did

you know they can also

affect your health?

1 www.cmha.ca/mental_health/stress/ 2 The survey did not include Quebec. www.fpsc.ca/docs/default-source/default-document-library/fp_infographic_leger.pdf?sfvrsn=2. 3 www.theglobeandmail.com/report-on-business/economy/canadian-household-debt-burden-hits-record-high/article23417022/ 4 The Manulife/Ipsos Reid Health and Wealth Wellness Study 2014 surveyed over 2,000 Canadians who worked a minimum of 20 hours per week and who had both a retirement plan and a health plan through work or who had neither.


Highly stressed individuals are significantly less likely to be motivated to do their best at work or feel they have a healthy work- life balance.

Those who are very comfortable with their current financial situation are almost twice as likely to say they are very happy and are 1.5 times more likely to report that they are in good health. They are also more likely to be exercising regularly.

While being in poor financial shape can cause a lot of anxiety, the good news is there are ways to help fix it. In fact, making improvements to your financial health can have a positive impact on your personal well-being. If you’re feeling stressed because of

money issues, here are three steps you can take to help make things better:

1. Face it. Finding money to contribute to your retirement savings or dealing with a drawer full of unpaid bills can seem like monumental tasks. But the longer you ignore your financial situation, the worse your stress is likely to get. Facing the issue is the first step towards improving matters and alleviating your stress. Open up to your spouse, your advisor and others who can help you take control of your finances. Once you know what you’re dealing with, you can begin to tackle the issue head-on.

2. Make a plan. Having a concrete strategy in place, such as a debt repayment plan, can help you feel

more positive and in control of your future. Your advisor can work with you to assess your goals and put together a step-by-step plan to achieve them.

3. Have fun. Whether it’s a walk in the park or a nice dinner at home, make room for relaxation and fun. Laughter and friendship are excellent stress-busters. Find low-cost or free ways to let off some steam and enjoy life.

Remember: your finances don’t have to drag down your health. If you address your money worries, you might just find you have a lot more to be positive about than you thought. In fact, talking to someone and taking steps towards financial wellness can lead to a happier and healthier you.

SIX TRAITS OF FINANCIALLY PREPARED INDIVIDUALS

They have a financial plan

in place.

They have an appropriate level

of debt and a plan to manage it.

They’re saving for retirement.

They take fewer sick days.

They are more productive and

engaged at work.

They are more physically active.

Source: Manulife/Ipsos Reid Health and Wealth Wellness Study 2014.

WINTER 2015/2016 19

TALKING ABOUT MONEY

THESE DAYS PEOPLE SEEM more willing than ever to share personal details. The internet and social media make it easy to broadcast our lives to friends, family and even strangers. But one topic remains firmly taboo: money. Whether it’s how much you make or what you paid for your car, cash can be a conversation stopper. That’s because we’re taught early on that it isn’t polite to talk about money – and, if you’re not so comfortable with your own financial

situation, discussing it might even feel embarrassing.

But, in the right context and with the right people, conversations about finances can have valuable benefits. They can even be empowering – for example, understanding how others manage their finances can help you make better choices or avoid mistakes. And knowing that others face similar monetary challenges can help you realize you are not alone with where you stand financially.

What you can learn Consider all you could learn through an honest conversation about money. Perhaps a family member’s success in paying off a mortgage could inspire you to put a debt-reducing strategy in place. Or you might even strike up a conversation about retirement savings – how much are your close friends setting aside every month?

Raising the subjectWhile it’s important to talk about money, it’s not always easy to do. Here are a few ways to get the conversation started:

Your spouse – Open up about your personal histories with money, from how your parents handled it to your first experiences. What are your goals – and how can you plan together to meet them?

Your kids – Your children don’t need to know how much you earn, but you can talk to them about wants versus needs and the elements of a budget.

Your family – Introduce new traditions like setting limits around gift-giving for birthdays and holidays, or chipping in for something the family wants to enjoy together.

Your friends – Don’t be afraid to let your friends know if something doesn’t fit your budget. Suggest cheaper (or even free) options for getting together that won’t break the bank.

Your advisor – A great person to open up to about money – he or she can help you understand the different aspects of your finances and work with you to put together a plan for success.

THE LAST TABOO Why it’s time to talk about money.

FINANCIAL MATTERS

WHEN YOU FIRST STARTED WORKING, you may not have given insurance a second thought. However, as you enter your peak earning years, you have a lot more to protect. It’s likely that you and your family depend on your salary for the lifestyle you enjoy – and life, critical illness and disability insurance can help protect that lifestyle if you are unable to work.

Life insuranceLife insurance is important for everyone, especially if you own a home, have children or are responsible for other family members. How much you need depends on factors such as your debts (e.g., your mortgage), education goals for your children and other income needs. Here are two of the most common types of life insurance:

Permanent life insurance (also known as whole life and universal life) provides protection for life, as long as your premiums are paid. In some cases, you can accumulate a tax-advantaged investment or cash value that may increase the amount you leave to your beneficiary.

Safeguard your family’s

lifestyle with insurance.

Protecting what you work for


WINTER 2015/2016 21

Term life insurance provides protection at a guaranteed rate for a specific period of time, typically 10 or 20 years or to age 65. The policy is renewable at the end of the term, though the rate will be higher. This type of insurance is often used to cover a financial obligation that will disappear in time, such as a mortgage.

Critical illness insuranceEven though survival of heart attacks, strokes, cancer and other critical illnesses is increasing, recovering from such setbacks often requires weeks or months away from work. Extra costs, such as alternative treatments and accessibility modifications to your home, may not be covered by your provincial health plan.

Critical illness insurance provides a one-time cash benefit if you’re diagnosed with one of the conditions defined in your contract.1 This benefit can help support the day-to-day needs of you and your family while you take the time to access treatment, get well and return to work.

Disability insuranceRelatively common conditions such as depression or osteoarthritis may prevent you from working for a period of time. So can a serious car crash or back injury.

Disability insurance provides monthly benefits to help replace your salary or wages after an accident or illness. This type of protection is especially important if your job is your family’s primary source of income or if you run your own business.

Three in oneCombination insurance provides all three types of insurance – life, critical illness and disability – in one solution. It’s often structured to provide a pool of money – your

amount of insurance – that you can draw on whether you qualify for benefits from the life, critical illness or disability component. It’s a cost-effective choice that’s also simpler to manage than three stand-alone policies.

Do you have enough coverage?Keep in mind that, even if you have insurance through a benefits plan at work, it may not be enough to maintain your family’s current standard of living in the event of your death, critical illness or disability. An individual policy can help top up your benefits – and stay with you if you change jobs.

Speak with your advisor to help determine which types of, and how much, insurance you need.

1 The cash benefit is paid if you meet the eligibility criteria set out in your contract.

CALCULATE YOUR RISKWhat are the chances you’ll need to

draw on the benefits from life, critical

illness or disability insurance before

age 65? The answer may surprise

you! Calculate your own risk, or the

combined risk for yourself and your

partner, at insureright.ca – and discuss

the results with

your advisor.

results with results with

r advisor.

WINTER 2015/2016 23

FEATURE

Take charge of saving in your

There’s no time like

the present to get

serious about finances –

so start implementing

a plan to achieve

your goals for the future.

4Os

It’s a commonly asked question. Maybe it occurs to you as you’re celebrating a significant milestone in life or in your career. Or perhaps it hits home when a survey asks your age and you find yourself ticking the next box down. Suddenly, you realize you’re in your 40s, and perhaps you don’t have the savings you’d like to have by this point in your life.

Now, it’s time to take action – because, in your 40s, there’s still time to have a significant impact on your savings. The key is to focus your efforts in three key areas: building a plan, repaying debt and maximizing savings. By tackling these areas, you can start making steady progress towards your goals, one manageable step at a time.

BUILDING A PLAN

Imagine you’re about to set off on a family trip to somewhere you’ve never been. You bundle everyone into the car, rev up the engine and head for the open road. But you don’t have a map and you haven’t packed anything at all: no food, no clothes, no money. You’ll likely be fine for the first few hours – but what then?

Few would choose this kind of family adventure – yet, surprisingly, many people travel through life without a financial map or financial “supplies” like short-term and long-term savings to help them buy what they need along the way, and an emergency fund and insurance to protect them from the unexpected. In short, they haven’t created and implemented a financial plan.

A financial plan identifies specific goals and the strategies to meet them. It’s a clearly marked path leading from where you are now to where you want to be. And it can help to answer the questions that keep many of us up at night: What can I afford today? When can I retire? Will I run out of money?

Working with an advisor, you can build a written plan that works for you. Challenges may come along – an illness, a job loss, a divorce – but with a financial plan you’ll be in a better position to leap the hurdle and get back on course.


Where did the time go?

WINTER 2015/2016

REPAYING DEBT

The ratio of household debt to disposable income in Canada reached a record 163.3 per cent in the last three months of 20141 – up from 66 per cent in 1980.2 A significant amount of this is mortgage debt – a recent survey found that Canadian homeowners with a mortgage are carrying an average outstanding balance of $190,000.3

A plan to repay debt is an essential component of your financial plan. Setting a schedule can help you eliminate all debt by the time you retire. That’s important because in retirement, on a fixed income, it can be more difficult to manage the extra expense of interest and of paying down debt. There’s also the risk that interest rates may rise in the future, adding to the cost of carrying debt.

To start tackling your debt, consider:

Working with your advisor to integrate debt management into your personalized financial plan

Consolidating loans into one account with a lower interest rate to reduce the cost of debt

Putting a specific monthly amount towards debt to make repayment a habit

Reducing unnecessary expenses and paying with cash to avoid adding to debt

If you have multiple debts, paying down those with the highest interest rate first

Need extra motivation? As soon as you’re debt free and don’t have to make any more principal or interest payments, you will have more money available to add to your savings.

Set and regularly increase

automatic deposits into

retirement and other savings

accounts. If the money goes

directly into investments, it’s not

available for spending.

Establish a waiting period of

at least 24 hours before buying

anything over $100 (or another

amount you choose). This gives

you time to consider whether

you really need it and whether

it’s worth the cost. If you don’t

buy, consider investing the

money instead.

Track your spending for a

month and then multiply by 12

to estimate how much you spend

annually. This annual perspective

can help you decide if, for

example, you’d prefer to spend

$2,500 a year buying lunch at

work ($10 per weekday over 50

weeks) or invest $2,500 a year

towards your long-term goals.

25

THREE WAYS TO HELP BOOST YOUR SAVINGS

1 business.financialpost.com/personal-finance/debt/canada-household-debt-ratio-hits-new-record-of-163-3 2 Statistics Canada, Household debt in Canada, www.statcan.gc.ca/pub/75-001-x/2012002/article/11636-eng.htm (accessed June 2015). Reproduced and distributed on an “as is” basis with the permission of Statistics Canada. 3 The Manulife Bank of Canada poll surveyed 2,372 Canadian homeowners in all provinces between ages 20 and 59 with household income of $50,000 or more. The survey was conducted online by Research House between February 10 and 27, 2015. National results were weighted by province, income and age. www.manulifebank.ca/debtresearch.


MAXIMIZING SAVINGS

The financial planning industry often emphasizes the importance of starting to save when you’re young. Does that mean that at 40-something you should give up on saving for retirement? Of course not!

In your 40s, you may have to work harder at building your savings but you still have time on your side. Start by crunching the numbers with your advisor. Together, you’ll answer questions such as:

How much have you saved so far?

How much income do you expect to receive in retirement from government and workplace pension plans?

How much income do you need to sustain your lifestyle throughout retirement?

Next, to help make saving a priority, set specific saving goals – as much as you can afford – and check in every year to see the progress you’ve made and to fine-tune your plan if necessary. See the sidebar on page 25 for three ways to help boost your savings.

It’s also critical to maintain a long-term perspective, since you may have 20 years or more of saving and investing ahead of you before you retire. To help with that, here’s a refresher on some timeless principles of investing.

1. Always diversify

This year’s top performer isn’t likely to be next year’s. One of the most effective ways to reduce investment risk is to diversify – across asset classes (e.g., stocks and bonds), geographic regions (e.g., Canadian and international investments), and product solutions (e.g., mutual funds and guaranteed investments). Your advisor can help you select the strategy appropriate to your tolerance for risk.

2. Be rational, not emotional

In good times, investors are excited; they may want to invest more and often “buy high.” When markets turn negative, investors sometimes become fearful and decide to cut their losses; they “sell low.” Stay disciplined and committed to your long-term investment plan to avoid riding the emotional rollercoaster.

A financial plan identifies specific strategies to meet them.

3. Stay invested

Jumping in and out of the market increases the chance that you will miss the days when investments perform best. By staying fully invested, you can help ensure that you capture those best days, which can add significantly to your long-term returns.

4. Focus on the long term

Markets move through cycles but, if you’re investing for the long term, longer-term trends are what count. Keeping that in mind, and measuring your performance over time rather than overnight, will help you stay the course through market crises and opportunities.

5. Turn market ups and downs to your advantage

Investing a fixed dollar amount every week or every month helps to keep you on track towards your saving goals. It also means that fixed dollar amount will buy more units when prices are low and fewer units when prices are high – a benefit that is often described as dollar-cost averaging.

OLDER AND WISER

You may not be fresh out of school and at the start of your career – but that’s an advantage both in life and in investing. As you move through your peak earning years, you have a tremendous opportunity to build your savings by creating and following a financial plan designed to meet your needs and achieve your dreams.

Now, it’s time to get started. Meet with your advisor to discuss your personal situation. Together, you can design strategies to help eliminate debt and build savings through extra contributions and appropriate investment choices. With a comprehensive financial plan in place, and updated regularly, you can have confidence that your finances are heading in the right direction to achieve your goals for the future.

goals and the

STAY MOTIVATED! As anyone who has ever started an

exercise or diet regime can tell you, the

key is to follow through day after day,

and year after year. These ideas may

help you sustain the momentum and

reach your saving targets:

Find inspiring pictures that represent

the future you want to build, and display

them where you will see them every day.

Write down all the reasons you want

to achieve your goal – how it will benefit

your lifestyle, broaden your children’s

choices and enhance your confidence in

your future.

Set intermediate goals – for example,

paying off a certain percentage of your

debt or accumulating a certain amount

of savings – and reward yourself for

achieving them.

Plan what you will do if you experience

a setback, so that it doesn’t stop you but

becomes a detour.

Talk to others about your goal, your

successes and your challenges – because

everyone needs a support system to stay

on track.

WHAT KEEPS YOU MOTIVATED?

Share your ideas on the @Manulife

Twitter or Facebook page with the

hashtag #BuildingMySavings or email

[email protected].

2727WINTER 2015/2016


SMALL BUSINESS

AS A SMALL BUSINESS BECOMES ESTABLISHED, there are typically fewer ups and downs. Growth stabilizes, sales become more regular and predictable, and the focus often shifts from acquiring new clients to retaining existing ones. Generally there’s less need to hire new staff and more emphasis on retaining existing employees.

The most significant shift may be that, as a business owner and manager, you can be less reactive and more strategic in your planning. Instead of chasing challenges, you can prepare for them. And instead of scrambling to keep up with growth, you can manage it. With this broader perspective comes a tremendous opportunity to set the business up for future success.

Investing in growthAn established business may be enjoying consistent profitability right now – but that can change if it becomes complacent. To continue to thrive and remain a step or two ahead of competitors, it’s important to:

Stay on top of industry trends – analyze the market and keep close tabs on the competition

Exploit growth opportunities – build market share, move into new geographic areas and perhaps diversify into related businesses

Build customer loyalty – market in traditional ways (e.g., advertising and public relations) and innovative ways (e.g., search engine optimization so your business appears at the top of internet search results and social media)

YOU’VE MADE YOUR MARK – BUT HOW DO YOU SUSTAIN IT?Positioning established businesses for long-term success.

WINTER 2015/2016 29

Increase efficiency – negotiate favourable terms and volume discounts from suppliers, streamline operations and implement productivity-enhancing technologies

Business and financial plans must remain dynamic and flexible. These plans should help you promptly access additional cash flow when needed. They should also address the common risks facing a business and its owners.

Rewarding your teamA stable workforce, with low turnover, can operate efficiently and build valuable institutional knowledge. There are many ways to encourage employees to remain for the long term. For example, established businesses may want to:

Encourage professional development – build job-related and leadership skills, as well as capabilities with new technologies, through a variety of training initiatives for employees

Help employees achieve work-life balance –

provide flexible working hours, work-from-home options and a mix of paid vacation, sick days and personal days

Build loyalty with group plans – offer health benefits, retirement savings plans and profit-sharing plans that show you value your employees’ health and wealth needs

A coordinated employee attraction and retention strategy will help to ensure that your business can count on the commitment of the people within the organization who make success possible.

Speak with your advisorAn advisor can help your established business:

Access innovative banking solutions that enable growth, such as flexible financing arrangements, acquisition loans and cash-flow management solutions

Protect critical elements of the business with key person insurance, business loan protection, buy-sell funding and capital gains tax funding (see sidebar for more details) Build a meaningful retirement savings plan that supports long-term employee loyaltyEducate employees about budgeting, debt management and planning for retirement

Watch for the next edition of Solutions, where we’ll explore strategies that support business owners as they prepare to transfer ownership or sell their business.

PROTECTING YOUR BUSINESS As a business grows, there is more to

protect. Without appropriate insurance, the

company can be extremely vulnerable to

risks that can affect its profitability and even

sustainability today and well into the future.

Talk to your advisor about cost-effective

solutions that can provide:

Key person insurance to help a company

recover following the death of an owner

or executive

Business loan protection to cover a

company’s debts, especially personally

guaranteed loans, in the event of the

owner’s disability or death

Succession planning through buy-

sell funding that covers the financial

obligations and tax implications of

a partner’s death

Capital gains tax funding to pay tax

liabilities on death


SMALL BUSINESS

AS SMALL BUSINESSES GROW from start-ups to established companies, they experience a wide range of opportunities and challenges. Through every transition, the strategic guidance of advisors who specialize in the small business market can provide tremendous benefits. We spoke to two business owners about their paths to entrepreneurship and the value of partnering with skilled advisors.

From start-up to expanding business: Peasant’s Pantry scales upIt was four a.m. and Joseph Crocker still had hours of work ahead of him making specialty meats and charcuterie – pâtés, sausages, ham and bacon. A professional cook with nearly two decades of industry experience, he had started Peasant’s Pantry in the fall of

2011 with a focus on high-quality, locally raised meat and nose-to-tail butchery. “I decided to go into business because I didn’t see people doing some of the things

I was interested in, like old-school head cheese and different fermented meats,” he explains. “And there’s a big [charcuterie] boom in the States, so I thought it was a good time to branch out and invest my time in myself.”

On that late night in the spring of 2014, Crocker realized it was time to graduate from being a one-person start-up. “You can’t grow a business by yourself; employees are your business,” he emphasizes.

SMALL BUSINESSES SHARE THEIR INSIGHTSThese two companies are charting their own courses towards success.

WINTER 2015/2016 31

He moved out of his home-based processing facility and opened a deli in New Ross, Nova Scotia, that summer. One year later, Peasant’s Pantry had two full-time employees, three part-timers and three revenue streams – fresh and specialty meats, butchery services for farmers and the eat-in or take-out deli.

Expanding the business required financing, and Crocker worked with two advisors to secure it. Looking back, he admits one thing he might have done differently was to arrange sources of financing well in advance: “When I first started the business, we had access to our savings and so I thought, ‘That’s enough. We have enough to get started so we won’t worry about it.’ But then, once you’re in the business, it’s really hard to find more funding.”

The advisors steered him towards financing options that met his needs, and also helped him put life and disability insurance in place to protect his household and his business. He adds, “It was good to talk to them about the business plan.”

Crocker has since expanded to wholesaling to a growing restaurant market. Looking ahead, he is exploring the prospect of opening delis in other rural towns. What advice would he give to other start-ups? “Have confidence, work hard, believe in what you’re doing and be consistent.” Peasant’s Pantry started small, but it’s thinking much bigger these days.

Established and still growing: Codefusion Communications Inc. protects its assetsA “downsizing opportunity” led Jeff Brodie from a

career at a large corporation to a one-person consultancy in 1993 – and, out of that, Codefusion Communications Inc. was born. Now, 19 years after the company was incorporated, Codefusion helps Canadian businesses make

the most of information technology by analyzing their needs, consulting on strategy and assisting with budgeting. Zero Problem Computing, the company’s newest brand, aims to eliminate technology challenges within an organization.

“I realized that the corporate work I had done was really what small and medium businesses needed. They needed the structure. They needed the vision. They needed the planning,” Brodie says. “We provide all [types of] IT services, from a chief technology officer (CTO) down to the desktop technicians.”

By 2009, Codefusion had gained momentum. It felt like a turning point – and Brodie knew it was essential to keep key employees. “One of the challenges a small organization faces is that of staff retention,” he notes. “We started observing our seasoned staff seeking employment opportunities even if it meant a cut in remuneration. When we asked why, we learned our employees were seeking security.”

He met an advisor experienced in group benefits and insurance planning through a networking group. She recommended an affordable hybrid package that includes a group Registered Retirement Savings Plan (RRSP), health benefits and a health spending account with critical illness insurance coverage that lets employees set their own priorities.

“No organization is too small to start thinking about protecting its business and protecting its assets,” says Brodie. “The number-one asset for any business is its employees. So I think that having a really good security plan in place for your most important asset is key to any long-term growth and success.”

As the number of staff approaches 20, Brodie will continue to draw on the specialized knowledge of his advisors. “The organization is shifting and I need a different level of thinking and a different level of expertise on my team to help me transition to that next level.”


TAX CORNER

NOBODY LIKES TO PAY MORE TAX than they have to – but when was the last time you checked to make sure you’re taking full advantage of all the tax-saving opportunities available to you? These come in two forms:

Deductions that reduce your taxable incomeCredits that reduce your taxes payable

This article describes some of the most common deductions and credits. Speak with your accountant or tax specialist about which ones apply to you and how you can minimize your family’s tax bill.

DeductionsDo you make RRSP contributions?

When completing your tax return, contributions you made to your Registered Retirement Savings Plan (RRSP) can be deducted (up to your contribution limit).1 But they don’t have to be. RRSP deductions can be:

Carried forward indefinitely (even after the RRSP is closed)Spread out over several years

That means you can make a strategic decision about when to take the deduction – for example, deferring it to a future year when you anticipate your income will be higher.

BEING TAX-SAVVY HAS ADVANTAGESKeep these deductions and credits in your back pocket to help lower your tax bill.

1 Your final RRSP contribution must be made by December 31 of the year you turn age 71.

WINTER 2015/2016 33

Do you have investment expenses?

You can deduct fees paid to manage or administer your non-registered investments. You can also deduct interest paid on money borrowed to earn income from non-registered investments or from a business.2

Are you paying for daycare?

You can deduct qualifying child care expenses paid so you or your spouse3 can earn income, go to school or conduct research. You can include amounts paid to a child who is age 18 or older to look after siblings who are age 16 or younger.

Generally, only the spouse with the lower net income (even if it is zero) can claim these expenses. However, under certain circumstances the spouse with the higher income may be able to claim them, for example, if the lower-income spouse was enrolled in an educational program.

Have you relocated for work or school?

You can claim moving expenses if you moved at least 40 kilometres closer to:

A new place of work A school where you enrolled as a full-time student

These expenses can be deducted only from taxable income earned at the new location or the taxable amount of scholarships, fellowships, bursaries, certain prizes and research grants – but you can carry forward unused amounts until you have enough eligible income to claim them.

CreditsAre you a first-time home buyer?

If you purchased a home, and neither you nor your spouse owned another home in the

calendar year of the purchase or in any of the previous four calendar years, you may qualify for the First-Time Home Buyers’ Tax Credit – worth up to $750. Either spouse can claim the credit, or you can share the credit.

Do you have medical expenses?

You can claim eligible medical expenses for yourself, your spouse and dependent children under age 18 that were not paid for by a provincial or private plan. You can also claim the premiums you pay for a private plan.

2 The Income Tax Act (Canada) provides the basic criteria for interest deductibility. In Quebec, the deduction for investment expenses is limited to the amount of investment income earned during the year. 3 Throughout this article, “spouse” includes a spouse or common-law partner as these terms are defined in the Income Tax Act (Canada).

STAY ORGANIZED THROUGHOUT THE YEAR Keep the information you will need to file

your taxes in clearly labelled file folders

and you won’t have to scramble to find the

appropriate paperwork in April. In addition

to the categories in the attached checklist,

you may want to add file folders for other

important financial information, such as:

Bank account statements

Investment account statements

Insurance policy documents

Credit card statements

Mortgage statements

Other loan statementsloan statements


The lower-income spouse should generally claim the credit, assuming he or she has to pay taxes, because the credit is reduced by a percentage of net income.

Do you give to charity?

Donations over $200 receive a more generous credit, so it may make sense for spouses to pool their donations and for only one spouse to claim all donations during the year. You can also carry forward donations for up to five years to maximize your tax savings.

Keep in mind that donating stocks, mutual funds or segregated fund contracts directly to a charity results in a donation receipt for the fair market value and eliminates tax on any capital gain.

Are you a student?

If so, you may be able to claim:Post-secondary tuition costs over $100An education amount for each month you’re enrolled in a qualifying programA textbook amount for each month you’re enrolled in a qualifying program

Any amounts you can’t claim on this year’s return can be transferred to a spouse, parent or grandparent, or carried forward so you can use them in a future year.

In addition, students may be able to claim most of the interest paid on student loans in the current tax year

and/or the preceding five years – they can also carry forward this credit for five years.4

Do you have children enrolled in

extracurricular activities?

The Arts Tax Credit applies to up to $500 in eligible fees for an “artistic, cultural, recreational or developmental activity.” Either parent can claim this credit. You can’t claim the same expenses under this credit and under the child care expense deduction.

Do you use transit?

If you have a monthly (or longer) pass that gives you access to local buses, streetcars, subways, commuter trains, commuter buses or local ferries, you or your spouse can claim the cost for yourself, your spouse and dependent children under 19.

Do you receive pension income?

The first $2,000 of eligible pension income qualifies for the pension income tax credit. What’s eligible changes depending on age at the end of the year. Under 65, the credit applies only to income received directly from a pension plan or received from other registered plans or an annuity because of a spouse’s death. At 65 and above, the credit also applies to income from other registered plans such as Registered Retirement Income Funds (RRIFs), annuities purchased from an RRSP or deferred profit sharing plan (DPSP), as well as the taxable portion of an annuity contract, including a

guaranteed interest contract (GIC) from an insurance company. Any unused portion of the credit can be transferred to a spouse.

Pay tax-deductible or tax-creditable expenses before year-endA variety of expenses can only be claimed as a deduction or credit on your tax return if the amount is paid by the end of the calendar year. If you will be paying a tax-deductible or tax-creditable expense early next year, consider paying the amount by the end of this year in order to get the benefit on this year’s tax return.

4 Loans must have been received under the Canada Student Loans Act, Canada Student Financial Assistance Act or a similar provincial or territorial law for post-secondary education.

CAN YOU “SPLIT” INCOME TO LOWER YOUR TAX BILL? In some cases, you may be able

to “split” income among family

members – effectively moving

some income from a higher

income earner to a lower

income earner. With pension

income splitting, for example,

spouses can elect to deduct up

to 50 per cent of eligible pension

income from the higher-income

spouse and include it on the

tax return of the lower-income

spouse. Speak with a tax advisor

about what makes sense for

your family.

WINTER 2015/2016 35

*Source: Parachute. (2015). The Cost of Injury in Canada. Parachute: Toronto, ON Your coverage will be subject to the terms, conditions, exclusions and other provisions set forth in the policy contract. Such limitations and exclusions can be fully explained by your advisor.

Personal Accident Disability Insurance and Cash Hospital plans are underwritten by

The Manufacturers Life Insurance Company (Manulife).Manulife and the Block Design are trademarks of The Manufacturers Life Insurance Company and are used by it, and by its affi liates under licence. © 2015 The Manufacturers Life Insurance Company. All rights reserved. Manulife, P.O. Box 4213, Stn A, Toronto, ON M5W 5M3.

Full time. Part time. Retired. At school. Running a business.

No matter how you spend your day, you never plan on having an accident.

Yet every year thousands of Canadians* are involved in disabling accidents that prevent them from spending their time doing the things they take for granted every day. That’s where Personal Accident Disability Insurance from Manulife can help. Personal Accident Disability Insurance can provide you with a monthly benefi t to help make up for lost income or cover unexpected expenses while you recover from an accident. The plan is available to anyone between age 5 and 80 and renewable up to age 90. Anytime, anywhere in the world.

Call your advisor to learn more about Personal Accident Disability Insurance.

WINTER 2015/2016 37

FROM COAST TO COAST, AND SOUTH TO NORTH, Canada offers winter travellers an opportunity to explore new landscapes, try new activities and celebrate our plentiful snow and ice. Here’s a sampling of what you and your family can find to do in each province and territory this season.

Newfoundland and Labrador’s breathtaking parksStrap on snowshoes or cross-country skis and set off along the groomed trails of Gros Morne National Park, Terra Nova National Park, Notre Dame Provincial Park or Butter Pot Provincial Park. Keep an eye out for rabbits, foxes and other wildlife as you go. www.newfoundlandlabrador.com

Prince Edward Island’s world-class snowmobile trailsTiny PEI has 650 kilometres of groomed and patrolled snowmobile trails, including the Confederation Trail from Tignish to Souris, with clearly marked offshoots to other towns. Stop for a hot drink at one of 17 clubhouses managed by snowmobilers. www.tourismpei.com/pei-snowmobiling

Nova Scotia’s mouth-watering Chowder TrailSeafood, fresh vegetables, herbs and cream – chowder is the ultimate winter comfort food. Get off the beaten track and explore local cafés and inns on a road trip that will warm you from the inside out. www.novascotia.com/explore/road-trips/chowder-trail

FUN IN THE SNOWEmbrace winter with a made-in-Canada vacation.

LEFT: Heli-skiers swoop down a B.C. mountain.

TOP: A dogsled team speeds across the snow in the Yukon.

ABOVE: Wildlife abounds in Newfoundland’s parks.

TRAVEL


New Brunswick’s icy adventuresThey call snow “white gold” in New Brunswick, and winter activities are plentiful. There’s even an annual White Gold Festival in Miramichi. Try your hand at ice fishing in Campbellton’s Restigouche River or ice climbing at Parlee Brook. www.campbellton.org/camp2/FactsFigures.asp www.trailpeak.com/trail-Parlee-Brook-Ice-near-Sussex-NB-2166

Quebec’s festive Winter CarnivalQuebec City hosts the largest winter carnival in the world – more than two weeks of parades, snow sculptures, ice canoe and dogsled races, and dancing to live music under the stars. Looking for a unique place to stay? North America’s only ice hotel, the Hôtel de Glace, is a 15-minute drive from downtown. carnaval.qc.ca/en www.hoteldeglace-canada.com

Ontario’s glittering Rideau Canal SkatewaySee Ottawa from the water, as you glide along the Rideau Canal Skateway’s 7.8 kilometres of ice. With skates and sleighs available to rent, change huts on the ice and hot chocolate on offer at snack stations along the way, there’s no excuse not to enjoy this quintessentially Canadian activity. rcs.ncc-ccn.ca

Manitoba’s polar bear expressThe two-day train trip from Winnipeg to Churchill covers 1,700 kilometres through picturesque landscapes. When you arrive in what’s been called the “polar bear capital of the world,” head out to see one up close from the safety of a tundra vehicle or wilderness lodge. At night, look up: this is one of the best places to see the northern lights. www.everythingchurchill.com

Saskatchewan’s thrilling skijoringSkijoring in Saskatchewan can make for a memorable adventure: ride cross-country skis towed by a running dog or horse. Or head out on an overnight excursion that teaches you how to handle a dog team equipped with a more traditional sled. www.tourismsaskatchewan.com > Things to Do > Winter

WINTER 2015/2016 39

Alberta’s relaxing hot springsBathe with a view. Nestled in the Rocky Mountains are pools of naturally heated water that steam even when the snow is falling. Lift your face towards the sky and let a snowflake land on your nose while the rest of you remains cozily warm in Banff Upper Hot Springs. travelalberta.com > Things to Do > Hotsprings

British Columbia’s adventurous heli-skiing and cat-skiingSki where few have gone before by hopping on a helicopter or snowcat and heading to remote runs. Carve your own tracks through deep powder surrounded by spectacular mountainous terrain. www.hellobc.com > Things to Do > Winter Activities

Yukon’s international dogsled raceEvery February, up to 50 teams of mushers and dogs travel 1,600 windswept kilometres from Whitehorse to Fairbanks, Alaska. If you’re not up for the 10- to 16-day Yukon Quest race yourself, cheer the teams on and then stay in town for the family-friendly Yukon Sourdough Rendezvous Festival.www.yukonquest.com www.yukonrendezvous.com

Northwest Territories’ exhilarating kite-skiingSkim across the frozen surface of Great Slave Lake on cross-country skis, feeling the tug of a kite in the breeze. A short lesson will get you up to speed with a relatively small four-line kite – or invest a little more time to master a full-size foil kite. www.spectacularnwt.com > What to Do > Winter Adventure

Nunavut’s dynamic floe edgePlan ahead for a spring trip to Nunavut. Starting in April, the floe edge (“sinaaq” in Inuktitut) attracts polar bears, walruses, seals, narwhals, whales and a wide variety of birds. A floe edge tour can lead you safely to the edge of the ice, with mountains and icebergs as a spectacular backdrop. www.nunavuttourism.com > Things to See and Do > Floe Edge

TOP LEFT: Bonhomme waits to greet you in Quebec City.

BOTTOM LEFT: Hot springs steam in Banff, Alberta.

TOP RIGHT: Ottawa’s Rideau Canal is a winter playground.

MIDDLE RIGHT: Northern lights shimmer above Churchill, Manitoba.

BOTTOM RIGHT: Unleash your inner snowmobiler in Prince Edward Island.


HEALTH, FUN AND FOOD

YOU’VE HAD YOUR FLU SHOT, stocked up on hand sanitizer and have been taking daily doses of vitamin C – you’re ready for flu season. But while you were preparing your defences to battle the latest bug, did you consider the flu-fighting weaponry in your fridge?

Believe it or not, the difference between spending a week on the couch with a box of tissues and surviving cold and flu season could come down to diet. “The medicinal value of food for warding off illness has been acknowledged for thousands of years,” says Kirsten Hartvig, a naturopathic doctor. “More recently, scientific research has discovered hundreds of beneficial nutrients in the foods we eat. By applying our knowledge of these nutrients and how they work to our diet, we can eat foods that boost our immune system and so help protect ourselves against a host of ailments.”

So which foods will help keep you clear of the common cold? These six are just a few good places to start.

Sweet potatoes More than just a Thanksgiving staple, this vibrant root vegetable is also a sweet way to strengthen your immunity. Sweet potatoes are abundant in beta carotene, an antioxidant found in orange-fleshed foods like pumpkin and carrots that gets converted into vitamin A. This vitamin is a key player in warding off illness, as it helps your skin and the mucous membranes in your nose and mouth stay healthy.1 These are your first lines of defence when harmful bacteria try to invade your body.

FLU-FIGHTING FOODSStay healthy this winter with the help of these immunity-boosting foods.

1 www.umm.edu/health/medical/altmed/supplement/vitamin-a-retinol

WINTER 2015/2016 41

2 www.askdrsears.com/topics/feeding-eating/family-nutrition/foods-to-boost-immunity/4-habits-weaken-immune-system; articles.mercola.com/sites/articles/ar-chive/2014/07/16/processed-foods-immune-system-gut-health.aspx

Try it: Swap regular potatoes for baked sweet potato wedges, with a drizzle of olive oil and fresh rosemary.

KaleYou’ve heard plenty of buzz recently around the nutrient power of kale, but this trendy superfood is more than a fad when it comes to immunity. A cup of raw kale provides more than 100 per cent of your daily value of vitamin C, a nutrient that has long been synonymous with keeping colds at bay. Also, Hartvig says, kale contains bioflavonoids, disease-fighting antioxidants that stimulate immune function.

Try it: Not a fan of kale? Hide the taste by tossing it in smoothies and soups.

Kefir Did you know? Approximately 80 per cent of our immune cells are located in the gut. This connection between digestive health and immunity is why kefir, or fermented milk, and other foods that offer probiotic benefits play a key role in keeping you clear of the common cold, says holistic nutritionist Joy McCarthy, CNP, RNCP. “Fermented foods help to nourish the good bacteria that call your gut home.” And here’s a bonus benefit: If you do get sick, a healthy balance of good bacteria from regularly eating fermented foods will help lessen the severity and shorten your time on the sofa.

Try it: Kefir is delicious on cereal or in smoothies. It comes in a variety of flavours, such as strawberry or vanilla, and is available in the dairy aisles of most major grocery stores.

BeansYou may have hidden them in your napkin as a kid, but it’s time to start embracing beans if you don’t want to catch your kid’s cold. Lentils,

chickpeas and other legumes are host to an arsenal of nutrients that offer immune protection, says Hartvig, specifically folate, vitamins B6 and B5, zinc and iron. Aim for a half-cup serving per day, such as three-bean salad for lunch or some hummus at snack time.

Try it: Combine beans with a source of vitamin C (think tomatoes, kale or broccoli) to increase the amount of iron your body absorbs by 50 per cent.

THE WEAKEST LINKS Prone to colds? One of these offenders

could be weakening your immune system.2

Sugar. Even before you pump up

the amount of immune-boosting

foods in your diet, consider

reducing your intake of the sweet stuff.

“Sugar lowers the infection-fighting ability

of your white blood cells,” says McCarthy.

Start by minimizing juice, pop, sweetened

cereals and desserts.

Processed foods. The more

ingredients on the label, the

harder your immune system has

to work to tolerate “foreign” ingredients

versus nutrients, says Hartvig. “A simple rule

of thumb to use when eating for health is

to eat things as close to their natural state as

possible.”

Alcohol. A couple of libations on

the weekend probably isn’t going

to hurt you, but excess alcohol, like

sugar, hinders your white blood

cells’ ability to multiply and fight off viruses.


Brazil nutsCraving a snack? Reaching for a few Brazil nuts could keep you from using up sick days. “Brazil nuts are one of the richest natural sources of selenium and vitamin E,” says Hartvig, “two powerful antioxidants working synergistically, each improving the performance of the other to boost immune-system function.” She adds that these nuts also deliver omega fatty acids and zinc, both of which have been linked to a stronger immune system.

Try it: Snacking on just two Brazil nuts a day is enough to boost selenium levels by up to 65 per cent, according to a study in the American Journal of Clinical Nutrition.3

SalmonSalmon and other oily fish are excellent sources of vitamin D. And when it comes to cold-combating vitamins, a growing body of research suggests vitamin D is the new C. A study published in the Archives of Internal Medicine found that participants with the lowest levels of vitamin D were the most likely to catch colds.4 “Vitamin D is a powerful nutrient because it enhances your immune system response,” says McCarthy. “This means your body is better able to identify and then destroy bacteria and viruses.”

Try it: If you’re vegetarian, you can get your daily dose of vitamin D from whole eggs and fortified dairy products. Vegan? Look for mushrooms grown in conditions using ultraviolet light.

Getting vaccinated and being diligent about washing your hands are excellent practices for helping you fight the flu, but don’t discount the immunity-boosting potential of everyday foods. Just be sure to get the green light from your doctor before making changes to your diet. We all get sick now and then, but good nutrition is always a prescription for feeling better and staying healthy.

INGREDIENTS

1 handful kale

1 frozen banana

2 tbsp. raw cacao powder

2 tbsp. almond butter

1 scoop vanilla protein powder

2 cups almond or coconut milk

DIRECTIONS

Blend all ingredients until smooth.

Recipe courtesy of Joy McCarthy, Joyous Health (joyoushealth.com).

Solutions is not intended to provide legal, accounting, tax or financial planning advice. Readers should not rely solely on Solutions, but should seek the advice of a qualified professional. E & O E. No liability is accepted by Manulife or its officers and employees for the consequences of any errors and omissions or for the nature and content of this or any other referenced pages. © 2015 Manulife. You are free to make copies of this magazine (or individual articles) and to distribute it, either in paper form or electronically, as long as you identify the source and do not change or remove any part of this work. All other uses are prohibited. Distributed Winter 2015/2016.

Any amount that is allocated to a segregated fund is invested at the risk of the contractholder and may increase or decrease in value. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. The indicated rates of return are the historical annual compounded total returns including changes in share or unit value and reinvestment of all dividends or distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Manulife is a trademark of The Manufacturers Life Insurance Company and is used by it, and by its affiliates under licence.

CHOCOLATE FLU-FIGHTERWard off illness with this tasty shake.

3 ajcn.nutrition.org/content/87/2/379.full 4 www.webmd.com/cold-and-flu/news/20090223/low-vitamin-d-levels-linked-to-colds

43WINTER 2015/2016

EXERCISE YOUR BRAIN!Can you find the 10 differences in these two pictures?

ANSWERS (from top to bottom and left to right): The orange needle-nose pliers have black tips; the number 100 on the ruler is blue; the large pliers’

handles are red and blue; there is an additional screw in the saw handle; the marker is missing from behind the protractor; a nail was added in the wall;

the orange handle of the chipping hammer is longer; the drill bit package is blue; a paintbrush is missing; there is a drill bit package beside the oil can.

Young Entrepreneur? You’ll need cash for that.

Manulife Bank has added over 800 Manulife Bank ABMs in select Mac’s and Couche-Tard convenience stores across Canada. The Manulife Bank ABMs are part of THE EXCHANGE Network which provides clients with convenient, surcharge-free banking at over 3,300 locations from coast to coast.

Visit manulifebank.ca/abm to find an ABM near you.

Fiserv EFT is the owner of THE EXCHANGE® trade mark and its associated rights. Fiserv EFT has granted FICANEX® the exclusive right to use, market and sublicense THE EXCHANGE® trade mark and the intellectual property rights associated with the operation of THE EXCHANGE® Network throughout Canada. Manulife Bank of Canada is an authorized user of the mark.Manulife, Manulife Bank and the Block Design are trademarks of The Manufacturers Life Insurance Company and are used by it, and by its affiliates under licence. CS2652 09/2015

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