Scott Edgington
Nov 19, 20203 min
Our next Money Monday will be on December 7th from 10 to 11:00 EST, via webinar. On the 7th, we will have a speed-dating style presentation from six of our carriers. Each carrier will have 10 minutes to share the sweet spots of their products and funds. We’ll also have some fun and give away some prizes. We hope this will help prepare you for 2021. Click here to register.
Thanks to everybody who commented about last week’s email. We’re hoping to have a divorce specialist present in January. Stay tuned.
Before we get started, here is an interesting article about segregated funds and 2020.
Year-end is quickly approaching so here are six ideas to help you strengthen your client relationships:
Set up a Mini-RRIF for your clients between the ages of 65 and 71
Crystallize and capital losses in non-registered accounts
Set up or make an extra deposit to a GMWB in order to get the bonus for 2020. Empire is still allowing up to $25,000 additional deposits to Class 2.1 GMWBs.
Set up or make and deposit to an RESP in order to receive the 20% grant. Remember grants are not pro-rated.
Lock-in growth using the reset feature
Make TFSA withdrawals
Set up a Mini-RRIF for your clients between the ages of 65 and 71
Take advantage of the Pension Tax Credit by establishing a Mini-RRIF for your clients over 65. For your clients 65 years old or older and less than 71 and do not have other eligible pension income, you can take advantage of the pension income tax credit by electing to set up a mini RRIF. For example, for a 65 year old, why not transfer $12,000 to an RRIF and draw out $2,000 annually for the next 6 years. This will maximize the pension tax credit. In Ontario, that could be a tax credit in excess of $400.
Crystallize and capital losses in non-registered accounts
Clients with non-registered accounts may have some funds that are in a loss position. While this is not the goal of investing, it is a reality that investments do go up and down. For funds that are in a loss position, why not lock-in these losses so that they can be used to offset capital gains in 2019 and beyond. Simply switching the losing fund to a new fund crystallizes the loss and the capital loss will be reported on your client’s T3. This loss can then be used right away or saved to be used in the future against a capital gain. The net result is your client will pay less in taxes.
Set up or make an extra deposit to a GMWB in order to get the bonus for 2020
This is an obvious one. Remind your clients and prospects to get their account opened or make additional deposits by year-end in order to get the notional bonus for 2020.
Set up or make and deposit to an RESP in order to receive the 20% grant
This is the same logic as the GMWB bonus, let’s get clients to open or make additional deposits to RESPs in order to receive the government grants. This one of the best deals going, where else can you get a 20% bonus on deposits?
Lock-in growth using the reset feature
Check to see if their market values are ahead of their guaranteed values. If so, and it makes sense, exercise the reset option. This is a great sales generation activity. You get to call your client with good news and ask if they’d like to make any additional deposits or have any other financial planning needs they may need.
TFSA withdrawal
As you are aware, withdrawals from TFSAs can be re-deposited to a TFSA in the following year. If you have clients who were thinking about make a TFSA withdrawal in January, suggest they do this withdrawal before the end of the year. This way they won’t have to wait to 2021 to make the re-contribution.
As always, we look forward to your comments.
Scott Edgington
Regional Manager, Wealth, Ontario
416-786-4140
Rick Gallant
Regional Manager, Wealth, Atlantic Canada and Quebec
1-902-316-0232