Want to kick off the New Year on the right financial footing? This time of year is a perfect opportunity to take a fresh look at your finances, much like you might do with your health and wellness habits. Reviewing your financial goals – and whether you’re on track to achieving them – can help to ensure you’re setting yourself up for financial success in the long run.
We asked Mary Lou Miles, Head of Wealth Management at Genus, to share some of the strategies she uses with her clients at this time of year. Here’s what she suggested:
Review your tax slips and portfolio performance reports
The beginning of a new year is a good time to start gathering your tax slips and checking your portfolio performance reports. Be sure to review new contribution limits and deadlines for your RRSP, RESP, TFSA and FHSA contributions for 2023, Miles says. “By getting everything organized now, you know you’ll be less stressed come tax deadline time.”
It’s also a good idea to book a check-in with your portfolio manager so you can review your goals and overall investment strategy. “This is often the only time of year clients will look at their portfolio,” she says. “When the calendar year starts, you can do a year-over-year performance comparison.”
Consider new contribution limits
Did you know that the contribution limit for the TFSA has been increased from $6,500 in 2023 to $7,000 in 2024? The larger it gets, and the more accumulated contribution space you have, the bigger your opportunity to take advantage of tax-free gains.
Analyze your cash flow for longevity
This time of year is also a good opportunity to review your overall financial situation, and particularly your cash flow. “We spend a lot of time going through a cash flow analysis with our clients,” Miles says. “They want to know whether their money will last through retirement, whether their investments are working for them given their withdrawals, and finally, whether they’ll be able to leave a legacy for their family. So we have a lot of conversations around that.”
Set up your legacy plan
Miles says that when it comes to legacy planning, many clients are interested in looking at scenarios for the best way to build a family legacy, including gifting money to their children, or incorporating philanthropy into their plan. “They need to assess how much money they’re able to spend, and work with planners, accountants and lawyers to align their plans.”
She cautions about avoiding the common pitfalls here, including joint investment accounts with the kids, fairness among siblings and cases where divorce settlements may factor in. “Some people loan their kids the money interest free,” she says, “but it’s simpler to just gift it.” Always check with your portfolio manager to discover the best scenario for you.
Revisit your investing policy
While Genus develops client investing policies designed for a long-term investment approach, these may occasionally need adjusting, particularly in the case of big life changes such as the receipt of an inheritance, the onset of retirement or a major purchase. If your year has included major financial changes, make a plan to revisit your investing policy with your advisor to ensure it reflects your current financial situation.
Interested in exploring how you can get your financial future on the right track? Contact a Genus advisor today.
