STYLUS estate planning information session may 2016 ppsx

STYLUS Asset Management
Welcomes You To Our

2016 Information Session
Tax Planning for your Estate

 Richard Rizzo, Bateman MacKay
 Brennan Carson, STYLUS Asset Management


Agenda
1.
2.
3.
4.

Financial & Investment Planning
Cash Flow Optimization
Tax Planning
Wealth Transfer


Making Plans

Financial Plan
Ensuring your cash flow meets your spending needs

Investment Plan
Ensuring your investments can meet your cash
flow needs

Financial Planning

Current Financial Picture
Snapshot


Personal Balance Sheet: Assets
What are your assets?
(Net of Liabilities)
•
•
•
•
•

Cash
Taxable investments
Registered investments
Real Estate
Insurance policies


Personal Balance Sheet: Asset Analysis
1. What is their purpose:
growth, income, lifestyle, estate?
2. What is the expected
appreciation of those assets?
3. What are the tax implications of
those assets:

•. Ownership
•. Cost of liquidating


Personal Income Statement
Expenses:
Annual &
Capital

All Sources of Income
Not all income is
taxed the same!


Investment Planning


Investment Planning
At STYLUS we incorporate two important factors into
your investment plan:

•
•

TIME HORIZON
PERSONALITY


Investment Planning: Investment Time Horizons
The Buckets Approach

Longest Time
Horizon
Medium Time
Horizon
(3-5 Years)

Shortest Time
Horizon
Immediate
Needs
(Next 12 months)

(1-3 Years)

(5+ Years)


Tolerance for Volatility
(aka ‘personality‘)

Investment Planning: STYLUS Funds
Momentum
U.S. Blended Equity
Growth
Value with Income
Wealth Protection

Time Horizon

Cash Flow Optimization


Cash Flow Optimization

Investible Assets

Required cash flow


Cash Flow Optimization
Tax Deferred Investment Accounts: RRSP & RRIF

DECISION #1: Contributions
• How much to contribute?
• When to stop contributing?

Plan Ahead!


Cash Flow Optimization

Read your STYLUS
newsletters!


Cash Flow Optimization
Tax Deferred Investment Accounts: RRSP & RRIF

DECISION #2: Timing of Withdrawals
• When will you pull money from RRSP/RRIF?
• How much will you need?

Timing and amount determines
investment planning


Cash Flow Optimization

RRSP Rule of Thumb

RRSPs are most efficient when your tax
rate at withdrawal is lower than when
you contributed.


Cash Flow Optimization

Preparing For RRSP Withdrawals
Setting up a Bucket-ed investment plan


Cash Flow Optimization: STYLUS Funds

“I don’t need
any money
from my
RRSP for 10+
years”

Tolerance for Volatility

RRSP Case Study: Client #1

FUND
ALLOCATIONS
Momentum

50%

U.S. Blended Equity 50%
Growth
Value with Income
Wealth Protection

Time Horizon


Cash Flow Optimization: STYLUS Funds
“I don’t need
any money
from my RRSP
for 10 years
and prefer a
lower volatility
profile”

Tolerance for Volatility

RRSP Case Study: Client #2

FUND
ALLOCATIONS
Momentum

25%

U.S. Blended Equity 50%
Growth
Value with Income
Wealth Protection

Time Horizon

25%


Cash Flow Optimization: STYLUS Funds

“I will start
drawing from
my RRSP in 3
years at 5%
per year”

Tolerance for Volatility

RRSP Case Study: Client #3

FUND
ALLOCATIONS
Momentum

25%

U.S. Blended Equity 30%
Growth
Value with Income
Wealth Protection

Time Horizon

25%
20%


Cash Flow Optimization: STYLUS Funds

“I will start
drawing from
my RRSP next
year at 5% per
year”

Tolerance for Volatility

RRSP Case Study: Client #4

FUND

ALLOCATIONS
Momentum

20%

U.S. Blended Equity 30%
Growth
Value with Income
Wealth Protection

Time Horizon

20%
20%
10%


Tax Savings Opportunity!
• Between ages 65-71
• Partial RRIF conversion from RRSP
• $2,000 per year withdrawn tax-free
via Pension Income Tax Credit
• SUGGESTION: Roll that money into a
TFSA (i.e. move from taxable to non-taxable)
• Benefit to estate planning

RRIF

TFS
A

Cash Flow Optimization
Tax Deferred Investment Accounts: RRSP & RRIF

DECISION #3: Structure of Withdrawals
• How do I start withdrawing money to support my cash
flow requirements?
You need to know how much cash flow you require


Cash Flow Optimization

How do I maximize
my cash flow on an
after-tax basis?