“Your financial strategy needs to be in line with your goals,” says Natalie Gallagher, a consultant with Investors Group. “Your investments should get you where you want to go and your insurance needs to ensure that those earnings aren’t at risk.”
Protect your lifestyle
It’s important to protect the lifestyle you have while working toward the one you want, all while having a plan for maintaining it when life throws you a curve ball.
“There are many components to a financial plan and you need to look at the whole picture,” says Natalie.
The four cornerstones of a strong financial strategy are short-term items such as savings and day-to-day expenses, income protection in the form of insurance, planning for moderate goals like buying a home or paying for a child’s education, and long-term planning for the type of lifestyle you want in retirement.
But before you can create a plan, you need to understand what’s most important to you. “Plans aren’t identical because every person’s situation is different. You might want to travel the world when you retire. You might be a single parent who wants to ensure that your children are well taken care of if something happens to you. You might be in your first job and don’t know where to start. Wherever you are now and whatever your goals are, the most important thing is that you start and then we can review as often as needed.”
Natalie stresses the importance of insurance in a comprehensive financial plan. “Insurance will help you cope with the unexpected. It’s better to buy insurance 10 years too early than to try to get it 10 minutes too late.” The effects of a job loss, the death of a spouse, or a disability can all be tempered by various types of insurance like life insurance, critical illness insurance or disability insurance. I look at what you can commit to monthly and how that will help you to attain your goals.”
What many people don’t understand is how to optimally make investments and insurance work with their goals. It doesn’t take as much time as you might think to figure it out. “I can learn a lot about your financial situation in a conversation over coffee. Then your job is done and you can get back to your life while I spend the time to analyze your options and put together a plan that will get you from where you are now to where you want to be with the least amount of resistance.”
After that, Natalie will help you reassess your plan every six to 12 months to be sure it’s still meeting your needs. “The plan you build today might not work for you tomorrow. The plan we build today is a work in progress. Rome was not built in a day.”
Do you have the coverage you think you do?
Insurance is an important part of an investment strategy — does your plan cover what you think it does?
You want to have the insurance you think you have when you need it the most. Unfortunately, many people don’t know what they have because no one took the time to explain it to them.
Having insurance that doesn’t meet your needs can almost be as bad as not having any at all. “You might think that the insurance you have through your employer’s benefit plan is enough, but did you know that those often expire at age 65? And if you move to a new employer that doesn’t offer health benefits and your health isn’t great, you may not be able to get other coverage. It’s better to access even an inexpensive policy than none at all. You can start small, but you need to at least start.”
Mortgage insurance is another option that can be confusing. “With traditional mortgage insurance, your bank receives the funds. If you have your own policy, you can spend that money on your immediate needs which would include mortgage payments but maybe not your entire principal. Your mortgage also decreases over time, which means you don’t need to insure it forever.”
And in 2017, life insurance rules will change, says Natalie. “It’s going to take a higher death benefit to get the same cash value out of your policy. Everyone will need to take a good look at their plans to be sure they still provide what you want them to.”
RRSPs aren’t for everyone
While a Registered Retirement Savings Plan (RRSP) can be a good strategy for some, it may not be the best fit for everyone, says Natalie. “If you will receive large pension payments, an RRSP might not be the right fit for you. A Tax-Free Savings Account can also be used as a long-term vehicle for growth to get the most tax-free savings you can.
You also want to make sure you’re in line with your tax strategy. Natalie works with her clients accountants to ensure that your financial plan fits with your tax strategy.
Putting the puzzle together
Investors Group can help you pull together all of the pieces of your financial plan, says Natalie. “We can do mortgages, we can do full life insurance, we can do investments. We offer all that banks offer but we can do it from the comfort of your own home and we are extremely competitive. And we have a big network of mortgage, insurance and investment specialists that we can work with to devise a plan that works for you no matter how complex your needs and goals are.” Investors Group is 90 years old and manages more than $200 billion in assets.
Natalie understands that creating a financial plan is a long-term commitment. “We have to look at how it all interconnects. I work with you from the time you’re ready to get started through retirement and beyond. I review your plan every year and help you add the puzzle pieces until you have everything in place.”
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