“Should I contribute to an RRSP or a TFSA?”  That is the question.  As is often the case, the answer is “it depends on the circumstances.”
 
Whenever you’re paying tax at a marginal rate of at least 40% and can afford it, you should contribute to both. If you’re paying tax at a lower rate, you’ll need to estimate what rate the RRSP will be taxed at when it’s withdrawn.
 
You should still consider contributing to both if your marginal rate of tax is in the 30 – 40% range. It could also depend on your age. If you’re in your early 30s and contributing to an RRSP, it will generate income on a tax-free basis for close to forty years before anything has to be withdrawn! Relatively small amounts have to be withdrawn annually after you turn 71, with the remaining balance continuing to earn income on a tax-free basis. By comparison, the income earned in a TFSA will always be earned on a tax-free basis, but there’s no tax break when you contribute.
 
What should you do if your marginal rate of tax is at least 40% and you don’t have the means to contribute the maximum amount to both your RRSP and TFSA?  Consider contributing as much as you can to your RRSP, take the tax savings and contribute it to your TFSA. Both an RRSP and a TFSA are essential to building a healthy retirement plan.

Not many people have spent enough time considering whether the executors they’ve selected have the right skill set and are age appropriate!

Consider replacing executors from your generation and moving to the next generation. I suspect that by the time your estate needs an executor, other than your spouse, people from your generation will either not be capable of acting, or not want to act, as executors.

Some of the characteristics I’d look for when selecting executors are whether they’re trustworthy and honest, organized and responsible, discreet and have sufficient time.

Avoid people who would have a conflict of interest. Get professional advice before appointing a non-resident executor. Don’t appoint too many executors. Evaluate the skills needed. Consider family dynamics. Choose an alternate executor. Don’t rule out a corporate executor e.g. a bank. Check the people you select will accept the role.

I’ve written before about managing personal risk. In my view, the world has become a much crazier place over the last few years.

I recently decided to increase the liability insurance coverage my wife and I have personally from $2MM to $5MM. The cost of increasing our coverage was minimal. You should consider increasing your personal liability insurance coverage, as there are people who won’t hesitate to sue you for a significant amount, regardless of whether they have a strong case.

I’ve seen more people addressing the need to have current wills and powers of attorney over the last couple of years. However, they’re not keeping a current list of the names they use to access accounts and the relevant passwords. Should a sudden death or incapacity occur, the person’s executors/trustees might not be able to access their accounts if an up-to-date list isn’t maintained. Once the list has been produced, maintaining it on an annual basis is a very simple task. Obviously, the list should be kept in a safe location and not emailed due to security issues.

People have become more flexible in their work lives. The days of a job for life are in the distant past. Staying with an employer for more than five years is the exception, rather than the norm.

When employees had the same employer for a significant part of their careers, they’d know what benefits they’d be entitled to e.g. life insurance, disability insurance, health care. By changing employers frequently, people leave themselves exposed to their new employer’s benefit package. These packages vary significantly from employer to employer.

What is the life insurance coverage? What medical and dental costs are covered? Is the disability income you’d receive sufficient? If you’re changing positions frequently, you’re dependent on your future employer’s plan.

Consider buying your own coverage. By doing this, you won’t need to worry about the benefits at your new employment. Setting up a plan at a young age could mean locking in coverage at low rates. As gold has historically shown a negative correlation with other asset classes, investing in gold can add a significant degree of portfolio diversification. Because the price of gold tends to rise with rising costs of living, it has historically been a good hedge against inflation. Trying to set up a plan in your fifties can be a very expensive proposition.

BE CAREFUL OUT THERE!  This saying was used by the desk sergeant at the beginning of each episode of Hill Street Blues – for those of you who are old enough to remember the show.
 
I’ve been a strong proponent of investing outside the traditional equity and bond markets over the last few years. Amongst other investments, this includes mortgage funds, mortgages on land, private equity funds, real estate development funds/projects, private reits, long /short funds, factored receivable funds, etc, etc. I haven’t changed my view. When making any investment, you need to do your due diligence. With low interest rates here for the foreseeable future and equity markets at historic highs, the pursuit of yield by investors has become a challenge.
 
Inevitably, in circumstances like these, unscrupulous characters appear on the scene. Besides this, the pressure on well run businesses to source products for their investors, might result in them not being as diligent as they’d been in the past. You need to be more cautious than ever when making investments. That’s why you NEED TO BE CAREFUL OUT THERE!