Mutual Fund Fees do matter
Mutual fund fees continue to be scrutinized by the media. Many feel that the Management Expense Ratios (MERs) on mutual funds are too high especially given the fact that the last 10 years have been far from rewarding for investors.
So, are MERs really too high? Does a higher MER mean better returns or lower returns? The debate may forever continue as some advocates of low fee mutual funds and Exchange Traded Funds (ETFs) suggest that investors should first minimize fees as much as possible because they have the biggest impact on long term performance.
Others might reason that they would be willing to pay higher fees for higher returns. So how often will higher fees give higher returns?
I’ve done some ongoing research on mutual fund fees and the impact they have on performance for quite some time now. My first book, Mutual Fundamentals started my curiosity on the topic of fees and since that time, I’ve looked at the relationship between fees and performance 3 other times. The last time was in 2006
. Most recently, I looked at it again given the tough markets from 2000 to 2010.
Once again, I studied rates of return over 1 year, 5 year and 10-year periods to see how fees impacted returns over different time frames. I also looked at four different categories of funds: Bond Funds, Balanced Funds, Canadian Equity Funds and Global Equity Funds.
My findings were fairly consistent with my past research, which further solidifies my belief that fees do matter. My findings are summarized below:
· Over 1-year time frames, fees matter less because there is randomness and unpredictability in the markets over short time periods. There is very little correlation between fees and performance in the short term. For example, in the Canadian Equity Category, one year returns for the funds we looked at ranged from a low of 7.9% to a high of 124.8%. Fourty nine percent (49%) of the above average funds had high MERs and 51% had low MERs.
· Fees matter more over longer time frames. When you look at 5 and 10 year returns, there is a greater chance that the above average funds had lower MERs. For example, over 10-year periods, 72.5% of the best funds were lower MER funds and 27.5% were higher MER funds. For 5-year periods, 61% of the best funds were low MER funds and 39% had high MERs. It appears the longer the time frame, the higher the correlation between low fees and better returns.
· Low MER funds do not guarantee better returns. When I looked at low MER funds, 33% of low MER funds still had below average performance over 10 year periods. The relentless pursuit of the lowest-cost equity mutual funds is not a guaranteed strategy for success. Some low-fee funds have below-average returns over the past five years and some higher-fee funds have done considerably better than the average. What I found interesting was that 41% of those funds underperforming funds were index funds. In other words, don’t buy an index mutual fund and pay an MER because you will never beat the average. Here’s where a low cost ETF might be a better strategy.
· Fees matter more with fixed income funds than equity funds especially over the longer term. Over 10 year periods, 97.5% of all the top performing Canadian Fixed Income Funds had below average MERs. When I looked at 1-year returns, only 67% of top performing Cdn Fixed Income Funds had lower MERs. Although lower MERs in fixed income funds have a higher probability of outperforming over all time frames, there is still less correlation in the short term.
The bottom line
When choosing mutual funds, fees do matter but more over the long term than the short term. If you are the type that trades mutual funds regularly, fees should matter a lot less. At the end of the day, value equals benefit less cost. Look for funds that provide good value which means you will need to look at fees but don’t necessarily chase the lowest fee. Proper analysis of mutual funds requires a multidimensional approach where you look at many different criteria and not just fees or performance.
A Different Kind of Mutual Fund
One of the last things we need these days is another mutual fund.
When I started in the financial business some sixteen years ago, there were over 400 different mutual funds. Now there are over 5000 in Canada alone. But this is not another mutual fund, exactly.
Let me explain.
There are two tax structures that mutual funds are set up under. One is which most are established known as a mutual fund trust.
The second and newest type of structure is a mutual fund corporation. A fund company issues several classes of shares, call them funds, with each class of shares representing a different mutual fund. As an investor you are permitted to switch among the share classes without triggering a capital gain on the share class you previously owned. As long as your investment remains within the corporate share structure, capital gains earned on a specific class of share is deferred.
In laymans terms, if you bought an equity fund under a corporate structure and switched it for another equity or short-term fund under the corporate structure, then there is no tax or capital gain triggered.
Normally under a typical mutual fund there would be. I had a friend that wanted to switch out of a fund that she held for over ten years. The fund changed management and she wasnt comfortable with the funds new direction. Her options were to pay the capital gain of over $30,000 and switch to a new investment or leave it as is because she had such a large tax bill.
It now becomes a tax decision more than an investment decision. By establishing non-rrsp funds inside a corporate share structure, you are eliminating this problem down the road and can make sound financial decisions regardless of the tax.
A second example is this last years market downturn. If an investor wanted to switch to cash or a short-term fund because of a financial planning decision or maybe they were very uncomfortable with the volatility, then they can switch without any tax consequences.
A financial planning tip I would strongly recommend to look at is examine the non-rrsp funds you own, figure out the capital gains and losses on switching these funds around today, then imagine if they were all in corporate share structures, it would eliminate the taxes upon switching.
Several companies now offer corporate structures and most financial professionals usually only recommend corporate share funds for non-rrsp clients to save them taxes. If you dont own corporate funds outside your rrsp, now would be a good time to switch into them provided you examine the tax consequences first.
Understanding Mutual Fund Distributions
Christmas is fast approaching and with it comes the end of another calendar year. In the mutual funds industry, the end of the year brings something I call ‘distribution season’. Distribution season refers to a time when mutual funds are cleaning out their tax accounts and investors are faced with some important issues.
Having dealt with many individual investors, mutual fund distributions can be one of the most confusing and misunderstood items in the mutual funds industry. I will try to tackle this issue as best I can.
Mutual funds distributions does not equal profits
One of the biggest misunderstandings is that many investors think mutual fund distributions are simply profits of the fund. I think this happens because many investors relate the distribution of a fund to the dividend of an individual stock. The two are very different.
Any income earned by a mutual fund is subject to tax. If the income remains in the fund, the fund will have to pay the tax. Mutual funds have to pay tax at the highest marginal tax rate so the mutual fund company prefers to distribute the tax to the investors who may pay tax at a much lower tax rate. It is in everyone’s best interest to have the mutual fund pay a distribution.
As a result, the mutual fund distribution is really a function of tax more than profits. It is possible that a mutual fund will grow in value but there will be no distribution and no tax to the investor. It is also possible that a fund does not grow in value and there can be a taxable distribution to the investor. So be very careful in thinking that a distribution is the same as a profit. Remember that distributions are not an indicator of fund performance. There is NO link between the amount of the distribution and performance of that fund.
Understanding how distributions affect the price of the fund
Many investors get concerned about buying or selling a mutual fund before or after the fund makes its distribution because they think they are buying the mutual fund at a higher or lower price. Buying a mutual fund before or after a distribution can make a difference in the amount of tax that you pay, but it will not affect the performance of your fund. This is best illustrated through an example:
Let’s say you own 100 units of a mutual fund and the price is $10 per unit. That means you have $1000 in total. Let us further assume the mutual fund is issuing a distribution of 50 cents per unit. Some investors might think that they should buy the fund before the distribution so they can make the extra 50 cents per share. What actually happens after the distribution, is the unit price of the fund drops from $10 per unit to $9.50 per unit you have 100 units, then you will have a distribution of $50.
If the distribution is reinvested, then the $50 will buy 5.263 units at $9.50 per unit. In total, you will have 105.263 units at $9.50, which remains a total of $1000.
If the distribution were paid to you in cash, then you would have 100 units at $9.50 per unit, which totals $950. This makes sense given that you were paid $50 in distributions.
RRSP or TFSA versus non-RRSP purchases
If you are buying a mutual fund in a Registered Retirement Savings Plan (RRSP) or Tax Free Savings Account (TFSA), then you do not really have to pay much attention to mutual fund distributions because the RRSP defers any investment income as long as the funds remain registered. All investment income in a TFSA is tax free.
However, if you are purchasing mutual funds outside the RRSP or TFSA, it is very important to be aware of the potential for mutual fund distributions. At this time of the year, if you buy a mutual fund outside the RRSP or TFSA prior to the distribution, you will have to pay tax on that distribution even though you did not own the mutual fund for the entire year.
Not all funds will have big distributions at the end of the year so make sure you know ahead of time whether the mutual funds you want to buy are going to issue distributions. You may be better off just waiting until after the distributions before you buy.
My two cents
Mutual fund distributions can be very complicated and confusing. My main point is to make sure that you do not associate distributions with performance. They are not the same. It is very hard to try to explain distributions in 700 words or less so I encourage you to speak to your financial advisor for further clarification.
Three Things to Consider When Buying a Life Annuity
In last weeks article, we introduced the life annuity as a potential income option for conservative investors. Before you buy an annuity, there are some key decisions that have to be made. Before we get into these decisions, it is important to clarify the term annuitant. The annuitant is the person for which the life of the annuity is based on.
1. Single life or joint life
Step one is to consider the differences between a joint life annuity and a single life annuity. The single life annuity is based on one life. If that person passes away, the life annuity ends. A joint life annuity is different in that the longevity of the annuity is based on two lives instead of one. If one of the annuitants passes away, then the annuity will continue to the surviving annuitant. The annuity only ends on the death of the last annuitant.
For a joint annuity, there is an added decision of whether to have the income reduced on the death of the first annuitant. The best way to illustrate this is to give you a sense of numbers to apply to the theory. Let’s look at Jennifer and Bob.
Jennifer has $100,000 and is age 65. A single life annuity would pay her $649.17per month. Her husband Bob is also 65. If she elected a joint life annuity, they would only get $581.15 per month. Why? When you add the second life to the contract the likelihood of paying income for a longer period of time increases. If you put a 60% continuation (the income will drop to 60% after the first death), the income will go up to $661.73
For joint annuities, you can determine a primary and secondary annuitant so the income will drop only if the primary annuitant passes away. As you can see, there are many variations and combinations and each combination will come with a different income.
2. Guarantee period
Another big decision that must be made is to decide if you want to add a guarantee period to the annuity. A basic annuity is sometimes called a Life Annuity Guaranteed zero years. This means that when the annuitant passes away, the annuity ends no matter when death occurs. In the example above, what if Jennifer buys a $100,000 single life annuity and she dies one year after purchasing the annuity? Jennifer will have received $649.17 per month for 12 months (or $7790.04). In this example, the annuity would stop and the remaining money would go to the annuity company.
One of the ways to alleviate this risk is to attach a guarantee period to the annuity. For example, let’s say Jennifer decides to add a 15-year guarantee. What she is doing is adding an option to the base annuity that will ensure the annuity will pay out at least 15 years of income no matter what. Sounds great but the catch is that adding a guarantee will cost money. In fact, for Jennifer, adding the 15-year guarantee will drop her income from $649.17 per month to $608.95 per month. If you do the math, $608.95 for 15 years is $109,611 of total income on a $100,000 of capital. If Jennifer dies after one year, her beneficiary will get the remaining income for the balance of the guaranteed 15 years. If Jennifer lives longer than 15 years, the income will continue. The annuity is still for life no matter if she lives longer than the guarantee period.
You can choose any guarantee period. They are usually done in increments of 5 years.
For all life annuities, you can apply an indexing factor where the income will increase every year by a certain factor. This is typically done to account for increases in cost of living. Indexing can appear to be a very costly option to add to a plan. If we consider Jennifer again, her income would drop 17% to $538.56 if she added a 2% indexing option. This means that her income would increase by 2% per year every year.
Life annuities can get pretty confusing. Once you start considering guarantee periods, multiple annuitants, reduction factors, and indexing options, it gets increasingly difficult to make the right decision. If you are baffled about the annuity options, get help. Most financial advisors and life insurance agents can help you make decisions about life annuities. However, make sure you shop around. It’s a competitive world out there and different companies will offer different incomes for your business. In any case, annuity income can vary by as much as 10%.
How much money will $100,000 pay you in retirement?
Many financial calculators spit out a number to answer the question ‘how much is enough?
’ Those that know me know that I wonder whether there is really such thing as enough?
The problem is retirement is not a number
. Whatever the number is, it does not really solve our problems. In fact it just leads to more questions. One of those questions is “How much income will I get from my investment?”
Using withdrawal rates
One of the ways to ballpark the amount of income you can take from your portfolio is to use a withdrawal rate. The debate over what is a safe withdrawal rate will continue and change but let’s use an example of 4%. If a withdrawal rate is 4%, then on $100,000 you could expect $4000 per year from the portfolio.
Obviously, this approach is a little simplistic and depends on the rate of return you can expect on the portfolio. As safe withdrawal rate assumes a retiree should be in a safe, conservative portfolio
. and is meant to ‘annuitize’ the total asset. If you invested in a balanced portfolio and achieved an average return of 4%, then your $100,000 capital would be preserved. The greater the returns, the greater the potential risk in the portfolio and therefore, the greater the variability of returns. When this happens market volatility can really destroy portfolios
that are paying out an income because the math works against you.
It all depends
So let’s get back to the question “How much will $100,000 pay you in retirement?” the answer is what is so often is “It depends”
The income off a portfolio depends on many different factors:
· when are you going to retire and take income?
· when are you going to die?
· what rate of return will you get?
· how much volatility is there in the portfolio?
· do you want to preserve capital?
If you look at this question from a purely mathematical perspective, it really boils down to 2 things – how long will you live and what rate of return can you expect on your money.
In our retirement workshops
we use a little table with these two variables to help answer the question. Here are some different outcomes for different scenarios
· If you are retired and plan to live 21 years and will make 5% on your money, $100,000 will pay you $7800 per year or $650 per month
· If you are 70 years old and plan to use your money over 10 years and will make 3% on your investment, that same $100,000 will pay you $11,720 per year or 977 per month
· If you are 55 and plan to live 30 years but hope to make 7% on your investment, every $100,000s will pay you $8060 per year or $672 per month
· If you plan to live 25 years of retirement but are optimistic about earning 10% on your investment, that same $100,000 will now pay you $11,020 per year
As you can see, the range of outcomes can vary dramatically depending on how many years you will receive income and what return you will earn on your investments. We all want a simple answer and often default to the ‘safe withdrawal rate’ but that method is overly simplistic.
You can download a little cheat sheet that I use to help estimate a safe withdrawal rate based on these two variables.
Another way to figure out how much $100,000 will pay you is to use some free online financial calculators. I’ll share a couple that I use.
The Money-Zine Withdrawal Calculator
is a really simple calculator. It’s a US calculator so if you put $0 for pension and social security, you just have to punch in data for 5 other boxes and you can get a sense of how much monthly income a lump sum will pay you.
The Retirement Withdrawal Calculator
does much the same thing as the Money-Zine calculator but it allows you to account for inflation on your income as well as preserving a lump sum amount of your asset.
Creating Retirement Income with Buckets of money
Interest rates have played a big role in changing the retirement landscape
. I’ve always said, the best time to retire was back in 1981 when interest rates
were at the peak. If you retired back then, you could take all of the money you saved and plunk it into a good old-fashioned GIC and earn 12% to 21%. If you think about it, most retirees could easily live off the interest and keep their capital 100% secured. Unfortunately, those good old days are long gone.
Since 1981, we have seen a massive decline in interest rates and today retirees can get 1%, 2% or 3% if they really shop around. It’s tough now for the retiree to live on less than 3% interest in a safe environment. So instead of low returns in a safe environment, most investors have moved money to riskier places in a quest to do better. If you think about it, this has created a new set of problems for the retiree or the soon-to-be-retiree.
How many of you know people who delayed their retirement because of the stock market and what a correction did to their portfolio? How many of you know people who retired but then had to go back to work because a stock market correction caused them to lose too much money?
Variable returns can work against you
One of the problems of return projections in the financial industry is that most of the math is modeled on a straight line. For example, the math on a 7% average return really assumes that you make 7% per year each and every year.
The real problem is most portfolios don’t move in a straight line anymore. Instead the move up and down with peaks and valleys. What if you did the math of withdrawing income on and investments that fluctuates with variable returns as opposed to an investment that moved in the path of a straight line? Would the results be different?
Avoiding the risk of bad timing.
One of the new risks that retirees face is the risk of bad timing. What happens if you retire just as the market is correcting? What happens if you retire and then the market corrects shortly thereafter? Some have coined this the retirement risk zone
To prevent yourself from changing your timing of retirement because of something you can’t control or predict, you can use the bucket strategy to creating retirement income.
What is the Bucket strategy to retirement income?
Basically what you do is set up your investments in hypothetical buckets like in the diagram. In one bucket you fill it with investments that are safe so that you can pay your self the necessary income you need from your portfolio for at least 5 years. Then you fill another bucket with investments that might be a little riskier but with a time frame of 5 to 10 years in mind. This might include some fixed income investments or even some income paying investments like REITS or Blue Chip Dividend paying investments.. The last bucket might contain some riskier investments to help combat inflation
over the long run.
When the short-term bucket drains down because of income to the retiree, then you can fill it up with the next bucket. And then the 5 to 10 year bucket drains down, you can fill it up with the last bucket. In theory, the older you get, the more conservative your portfolio becomes.
The main idea of the bucket strategy is that short-term volatility in the markets does not affect your ability to create income in the short term. The bucket strategy can take away some of the stress of market swings.
A Lesson in Record KeepinThe Income Tax Act requires you to keep all documents supporting your business activity; in an audit, the CRA will demand them.Keep Everything
According to the Income Tax Act, taxpayers must keep “records and books of account ... together with every account and voucher necessary to verify the information contained therein” for a period of six years following the last taxation year to which they relate. For corporations, the start of the six-year period is the fiscal year; for individuals, the calendar year.Show Us the Proof
The recent appeal ruling in Tibilla v. The Queen before the Tax Court of Canada, July 3, 2013, reinforces the need to maintain documentation. In summary here is what led to the ruling:
1. Mr. Tibilla (the taxpayer) acquired a rental property for $172,000 November 14, 2002, and sold it on December 18, 2007, for $285,000 but declared no capital gain in his 2007 tax return.
2. In 2010, the Canada Revenue Agency (CRA) advised the taxpayer that his return for 2007 was under review and that he was required to provide copies of the contract of purchase and sale, a statement of the capital cost allowance claimed over the years the property was owned, a list of any expenses related to the purchase and sale as well as the receipts for those expenses.
3. In a late filing of his 2008 tax return, the taxpayer declared a capital gain of $41,571.64 and a taxable capital gain of $20,785.82 (i.e., 50% of the capital gain). The taxpayer said he was declaring the capital gain in 2008 because, despite having signed the sale agreement in December 2007, disagreements with the new purchaser made the sale “uncertain and incomplete” until March 2008, when the disagreements were amicably settled.
4. Included in the taxpayer’s capital gains calculation was $52,810 in renovation expenses claimed to have been incurred before he actually acquired possession of the property (i.e., between April and November 2002). (The addition of this amount to the adjusted cost base would have reduced the capital gain when the property was sold.)
5. The CRA rejected the renovation expenses because the taxpayer provided no vouchers. The taxpayer said he had stored the receipts in his basement but they had been lost in a flood in 2008. He was unable to explain why the existence and loss of these receipts had not been brought to the attention of the CRA during the audit, discovery or the appeal. The taxpayer said he had made no insurance claim for the loss because he did not want to increase his future insurance premiums. He therefore also had no documents from the insurance company attesting to his loss.
6. The appeals judge ruled that the sale had taken place in 2007 since it had taken place by deed of sale before a notary on December 18, 2007, and had been registered in the official land registry the next day.
7. The judge also ruled that the period between the date of purchase (November 14, 2002) and the date of sale (December 18, 2007) was not six years and, in any case, the Income Tax Act required the taxpayer to keep records of any claims until the expiry of the appeals process, which the taxpayer had not done.
8. The appeal was dismissed with costs to the taxpayer.
The burden of proof for deductions lies with the taxpayer.Lessons
Referring to other cases, the judge emphasized that, since our tax system is based on personal selfmonitoring, the burden of proof for deductions and claims lies with the taxpayer. Just keeping notes is not enough; documents are required. If Mr. Tibilla had been able to produce records of his renovation expenses (and if they had been accepted by the CRA), he would have saved himself a significant amount in taxable capital gains and legal costs. The addition of the claimed $52,810 in renovation expenses to the $172,000 purchase price would have given him an adjusted cost base of $224,810. His capital gain would have been $60,190 ($285,000 - $224,810) to give a taxable capital gain of only $30,095. Instead, he incurred a capital gain of $113,000 ($285,000 - $172,000) of which $56,500 was taxable. Mr. Tibilla’s inability to produce his expense records cost him $26,405 ($56,500 - $30,095) in taxable capital gains.What about Your Past?
Prior to February 22, 1994, there existed a cumulative capital gains exemption of $100,000. If this amount was not fully used by the February 22, 1994, deadline, taxpayers could use any unused amount to revalue capital property. Effectively, the taxable capital gain on any taxable capital property sold thereafter would be reduced by the election amount of 1994. Documentation to support 1994 valuations may be required. Consider the following types of transactions that may need to be substantiated with adequate documentation years after they have occurred:
1. If you purchase shares of a corporation from a third party, the adjusted cost base (ACB) of those shares will not be the paid in capital on the balance sheet. Shares could be purchased at different times for different amounts.
2. If you have investments in income trusts, part of the monthly payments are usually return of capital which reduces the ACB of the investment.
3. When calculating the ACB of a partnership, you have to take into account the partners’ taxable income, which is often different from the accounting income.
4. Corporations that incur a non-capital loss may apply to reduce all types of income in the three taxation years prior to, and the seven taxation years following, the loss (10 years for taxation years ending after March 22, 2005). It would appear from the Tax Court ruling that application of non-capital losses 10 years back would subject the applicant to another six years of record keeping in the event that CRA wished to audit the taxable years.
As a result of the 2013 Tax Court rulings, individual and corporate taxpayers should consider the following:
· Locate the original documentation pertaining to any capital property.
· Review the record destruction policy to ensure you are retaining pertinent records.
· Contact your lawyer, accountant, real estate advisor, appraiser or other professional to determine whether they have copies of any of your records that may be required. If possible, get the originals and leave them copies.
· Keep in mind that professionals change firms, die, or sell their business to others. If your professional is no longer available, review past tax returns and statements to determine whether there are any issues that may require documentation held by their predecessors. Ask your current professional if they have documentation for the years in question.
· Consult with your professional about losses and their applicability to prior years’ taxable income to determine whether the time and cost of a potential CRA audit is worth the dollars that may be recovered.
· Establish a relationship with a CPA firm. Your CPA will be attentive to maintaining historical information.
· Maintain originals of all documents. After all, as noted above, it is your responsibility to produce the necessary documents to support your claim(s).Get It All Together
As you approach retirement and plan to sell the company or transfer ownership to others, you will need to have documentary evidence of past transactions to ensure any tax liability is kept to a minimum. Owner-managers should make reviewing the past and gathering the required information a priority
What’s new for this tax-filing season?
Did you know?
You may be eligible for new or improved tax relief measures and services when filing your 2013 income tax and benefit return.
- First-time donor’s super credit – This new credit for first-time donors gives an extra 25% credit for cash donations when you claim your charitable donations tax credit. This means you can get a 40% federal credit for up to $200 in donations and a 54% credit for the part of donations that is over $200 but not more than $1,000. This is in addition to the provincial credit. For more information, go to www.cra.gc.ca/fdsc.
- Family caregiver amount – If you have a dependant with an impairment in physical or mental functions, the additional amount you may be able to claim has increased to $2,040 when calculating certain non-refundable tax credits. For more information, go to www.cra.gc.ca/familycaregiver.
- Pooled registered pension plan (PRPP) – The PRPP is a new retirement savings option for individuals, including those who are self-employed. For more information, go to www.cra.gc.ca/prpp.
- Adoption expenses – The period to claim adoption expenses has been extended for adoptions finalized in 2013 and later years.
- Investment tax credit – Eligibility for the mineral exploration tax credit has been extended to flow‑through share agreements entered into before April 1, 2014.
- Tax-free savings account (TFSA) – The annual TFSA dollar limit increased to $5,500 on January 1, 2013, for the 2013 contribution year, and remains at that amount for the 2014 contribution year.
Canada Revenue Agency (CRA) online services make filing easier and let you get your refund faster
The CRA’s online services are fast, easy, and secure. You can use them to file your income tax and benefit return, make a payment, track your refund, and more. Sign up for direct deposit too! Your refund and any benefit or credit payments owed to you will be deposited directly into your account, putting your money in your pocket faster. For more information, go to www.cra.gc.ca/getready.
Isotonix® Daily Essentials Kit
Price Can$163.24|Price Can$155.08
What Makes the Isotonix Daily Essentials Kit Unique? Theres nothing more important than taking care of yourself on a daily basis. With the Isotonix Daily Essentials Kit, you can be sure that youre giving your body the essential vitamins, minerals..
Isotonix® Daily Essentials Kit
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A good quality vitamin and mineral supplement creates a sound micronutrient foundation to accompany a balanced diet. Vitamins and minerals help to support a healthy immune system, promote the conversion of food into energy, support a healthy cardiovascular system, support strong bones, promote mental clarity, maintain normal metabolic functioning, promote healthy growth and repair of tissues, help maintain normal blood pressure, and help maintain water and electrolyte balance in the body.
· Why should I take calcium?
According to the Surgeon General, taking a calcium supplement daily is key to preventing and treating calcium deficiency, and to helping reduce the risk of osteoporosis. Clinical studies indicate that women and many aging men are likely to become susceptible to osteoporosis.
Everyone needs calcium. Practically no one ingests enough calcium in their daily diet. Besides being helpful in supporting and maintaining bone integrity, calcium serves a dynamic role as a mineral. It's very important in supporting the activity of many bodily enzymes and maintaining proper fluid balance. Isotonix Calcium Plus also promotes the normal contraction of skeletal and muscle.
· Are there any warnings or contraindications for the products in the Isotonix® Daily Essentials Kit?
Isotonix® OPC-3, Isotonix Multivitamin, Isotonix Advanced B-Complex and Isotonix Calcium Plus are vegetarian products, and contain no wheat, gluten, soy, yeast, artificial flavor, starch, salt, preservatives or milk.
· If you are currently using any prescription drugs, have ongoing medical condition, or if you are pregnant or breastfeeding, you should consult your healthcare provider before using these product.
Control your Christmas spending
“Gifts are thoughtful but not always necessary.” – POB Bismark
I’m not entirely sure where this year has gone. It seems as though only last week it was September and now suddenly the malls, cities and houses are all decked out in their holiday finest and people are busy making their lists and checking them twice. It’s certainly a magical time of year and some of the magic lies in the ability of stores to whisk far more of our hard-earned money out of our pockets than we originally intended. It’s the season of Christmas spending.
I’m pretty confident that most people reading this will have seen or experienced this particular brand of magic at some time in their lives. It’s the reason that we find ourselves coming home from a shopping excursion with far more in our hands than we planned and far less in our wallets than we’re happy with. It’s a phenomenon that’s especially evident if you happen to find yourself in a mall on Christmas Eve, when getting swept up in a whirl of last minute panic combined with beautifully highlighted options inspires us to take temporary leave of our senses when it comes to sticking to the gift budget. Retailers and advertisers know exactly what to do in order to increase our Christmas spending. They carefully lay a trail of tempting commercials, bargain pricing and time-sensitive offers, all designed to lure customers, boost sales and help us spend more. As savvy money managers though, we have a responsibility to ourselves to build our immunity to this Christmas spending and to make sure our hard-earned money keeps working for us rather than our favourite retailer or financial institution.
Make a List and Check it Twice
It sounds simple but there is plenty of scientific and anecdotal evidence to suggest that people who make lists (and stick to them) spend less than those who don’t. It doesn’t matter whether it’s for groceries or gifts; writing a list forces you to consider the whole picture and challenges you to really look at your list and then decide if there’s any way to make it smaller. Just because you’ve bought gifts for certain people in the past doesn’t automatically entitle them to a place on your list this year. In my family for example, my brother, sister and I still buy gifts for our parents but we no longer buy gifts for each other. Instead, we make a point to go out for dinner together at some point over Christmas. Not only does this cost less but it also allows us to spend some time just hanging out which rarely happens at any other time of year. I buy gifts for my niece and nephew because they’re still young but rather than spending a huge amount, I buy them just one or two smaller gifts and then contribute the money I would have spent on a larger gift to their savings accounts. I figure that, 10-15 years down the road, when they’re heading off to university or wanting to buy a house, they’ll thank me more for the investment dollars than for the super-sparkly must-have toy that has long since been discarded and forgotten about!
Set a Gift Budget… and then cut it in half
If the commercials on TV and in the media are to be believed, then showing the appropriate amount of appreciation for the significant people in our lives carries a price tag of hundreds (possibly thousands) of dollars. Jewellery, electronics, power tools, an array of all-singing, all-dancing gadgets… there are a myriad of ways to show the people in your life just how much you love them (and an abundance of ways to finance that purchase if you choose to). I’ve commented before on how materialistic our society has become and this is never more evident than during the run up to the holiday season. So many of the people I talk to feel an enormous amount of pressure to make this “season of giving” all about the gifts that can be wrapped in shiny paper.
Christmas spending or making memories
In truth, the real spirit of the season is found in sharing the gifts of time and making memories with the people who matter most in our world. We buy into the myth that, without a beautifully decorated home, a fridge that is overflowing with food and a big pile of gifts under a stunning tree, we are somehow depriving the people we love of the true festive experience. In reality, when we look back on our own childhood memories of Christmases past, there’s a good chance that the most treasured memories involve the experiences of the season rather than the gift unwrapping. I know that I can only remember a very small percentage of the gifts that I received as a child (and some of them I remember only because they were so awful I can’t forget them!) but I do have a ton of memories involving hanging out with my family and friends, staying up late and enjoying the fact that my dad had two or three days off work.
This year, why not focus on finding ways to make the season special for those you love without committing a huge amount of money and Christmas spending. This may not make your favourite retailers terribly happy but you may be surprised at how it increases your enjoyment of the holiday season.
Make Claims for Children’s Programs in Year Paid
Claims for the Children’s Arts and Children’s Fitness tax credits are based on when the payment is made, not the year in which the activities are scheduled.
If you register your children — or your spouse’s or common-law partner’s children — in an artistic, cultural, recreational or developmental program that starts in January 2014 but you pay for it in December 2013, you can claim the non-refundable Children’s Art tax credit on your 2013 income tax return. You can claim up to $500 per child under the age of 16.
The same goes for the Children’s Fitness tax credit if you enrol a child under 16 in an eligible program of physical activity. For both credits, if the child is disabled, an additional amount of $500 can be claimed if the child is under the age of 18 and at least $100 is paid for the program.
Evelyn Jacks: Take Only What is Necessary – Lessons from Ancient Tax Law
With all the political shenanigans of late (both federal and local), the respect – or lack thereof – of the taxpayers’ dollars emerges on front page news daily. If this is particularly irksome to you, you might be interested in a little history of taxation in Canada.
It has been customary for tax policy to be developed to promote economic and social goals as well as to collect taxes and administer the tax system. Many of those goals had noble beginnings.
When Canada was founded, we needed to attract investors and immigrants to grow our economy, not unlike today: post-financial crisis and with an aging demographic which affects productivity and the size of our tax base. Budget speeches from Confederation until 1917 were focused on attracting immigrants by maintaining low taxes.
Canada’s early political leaders decided that attracting new taxpayers could be best achieved through the maintenance of low taxes vis-à-vis the Americans. For decades after confederation, our nation valued – and in fact advertised – our low tax advantage over our neighbours to the South. A recent excerpt from new book by Mark Milke called Tax Me I’m Canadian! A taxpayer’s guide to your money – and how politicians spend it, published by Thomas & Black 2013, traces this tax competition well. Since then, Canada has been, in fact, significantly influenced by U.S. taxation policies. Over time, the United States began taxing more aggressively than Canada did in the early twentieth century. It was the first to establish a central bank, an income tax and a capital tax, as well as setting the precedents of gasoline, property, and corporate tax. This journey is well described by Chris Edwards, director of tax policy studies at the Cato Institute and editor of www.DownsizingGovernment.org, in his article "We Can Cut Government: Canada Did". What does all of this have to do with current political misbehaviours? Just this: in the U.S., 71 percent of total government spending is federal and 29 percent is state-local. The opposite is true in Canada, where 38 percent is federal and 62 percent is provincial and/or local.
As Chris Edwards, notes: “. . .unlike U.S. states, Canadian provinces can freely borrow and spend without having to balance their budgets each year. During the 1990s many provinces trimmed their budgets and enacted reforms such as cutting welfare. Spending as a share of GDP fell. But over the past decade spending has risen again. Ontario, for example, has a spendthrift premier who has driven the provincial debt up to 37 percent of provincial GDP.” Accountability by all levels of governments, therefore, is very important.
Wilfred Laurier, Prime Minister from 1896 to 1911, was a strong advocate of spending restraint, low taxes, free trade, and civil liberties. He saw Canada as a decentralized federation that supported individual liberty. Even before Laurier, Sir Richard Cartwright’s 1878 budget speech noted:
“All taxation is a loss per se. It is the sacred duty of the government to take only from the people what is necessary to the proper discharge of the public service; and that taxation in any other mode, is simply in one shape or another, legalized robbery.”
It’s Your Money. Your Life. Taxpayers need to take charge of their after-tax affairs to control future wealth and build economic clout. The privilege to vote prudently for responsible stewards of tax dollars, is an important component of that success.
Ontario Gives Relief to Small Businesses
The Supporting Small Businesses Act recently passed a second reading in the Ontario Legislature. Also known as Bill 105, the object of the legislation is to provide relief from the Employer Health Tax to small businesses, charities and not-for-profit entities.
The Bill, if reviewed again and passed before the House recesses for holidays in December, will increase the exemption from the Employer Health Tax for private sector employers from $400,000 to $450,000, beginning January 1, 2014. It is estimated that the effect of this legislation would be 60,000 employers paying less Employer Health Tax, each saving up to $975 annually, while 12,000 employers would no longer pay the tax at all, not to mention the savings of not having to file such a return.
The legislation would also eliminate the exemption currently in place for employers with over $5 million in payroll. Therefore, the larger employers paying the additional tax would effectively offset the cost of exempting smaller businesses from Employer Health Tax. Each year the Employer Health Tax raises about $5 billion in revenue for the province of Ontario.
IOS 7 Tip : 8 Typing tips you need to know
Wish you could send a text message in ALL CAPS? Can’t find the em dash key? Tired of your iPhone or iPad constantly fixing your typing, even when it doesn’t need to be fixed? Read on for eight iOS 7 typing tips you need to know.
1. Turn on caps lock
Sending a text message or an email IN ALL CAPS is usually considered yelling—but hey, sometimes yelling is called for, right? And even if you’re not in a yelling mood, you might need something ASAP, or maybe you’re just LOL.
Just double-tap the Shift key to enable All Caps mode.
Here’s the trick to turning on caps lock on the iPhone: just double-tap the shift key. When the key turns dark gray, the caps lock is on; tap it again to turn caps lock off.
2. Turn off auto-correct
Had enough of those little pop-up bubbles that correct your misspellings, abbreviations, proper names, or anything else you don’t want corrected? You can always tap the bubble to dismiss it, or you can simply deactivate the iPhone’s auto-correct feature altogether.
To do so, tap Settings, General, Keyboard, then switch “Auto-Correction” to off. (And if you find you miss auto-correct after awhile, don’t worry—just turn it back on.)
While you’re at it, you can also keep the iPhone from capitalizing the first word of each new sentence by switching off “Auto-Capitalization,” or have it quit checking your spelling by turning off the “Check Spelling” setting.
3. “Long-press” your way to an em dash, a bullet, a “curly” quote, or an ellipsis
Can’t find your favorite symbol on the iPhone keypad? Maybe it’s just hidden. Tapping and holding a specific key (or a “long-press,” as it’s often called) will sometimes reveal a series of additional keys.
Who doesn’t love an em dash?
For example, while typing the body of a message, you can find the em dash (“—”) by jumping to the symbols keyboard (press the “123″ key) and pressing and holding the dash key.
Within a second or so, the pop-up “-” will expand with more options, including an em dash, a mid-size dash, and a bullet. Slide your fingertip up to the button you want, then release. Presto!
Press and hold the period, and you’ll get a pop-up for an ellipsis (“…”). Tap and hold the exclamation or question marks for their inverted versions (“¡” and “¿”).
And for a variety of “curly” quotes, tap and hold the quote key. Keep long-pressing other keys, and you’ll find even more options.
4. Add a “.com,” “.net,” “.org,” or other dot-somethings
When you’re tapping an Internet or email address into the iPhone’s browser or the “To:” line of an email message, you don’t have to type in “.com,” “.net,” or “.org” every time.
Don’t want to type “.com” over and over in Safari? Just long-press the period key.
Instead, just tap and hold the period key (or the “.com” key when you’re using the web browser), and a pop-up will appear with all manner of dot-somethings.
Hint: Want to select “.com”? Since .com is selected by default in the “dot-something” pop-up, you can just long-press the period key, then release.
5. Create keyboard shortcuts
Tired of typing out your street address over and over, or wish there was a quicker way to ask your instant messaging buddies if they’re around?
You can create keyboard shortcuts that will replace a few letters with full words or even entire phrases—perfect for, say, quickly tapping “ut” for “You there?” or “myadd” for your home address.
Tap Settings, General, Keyboard, and then scroll down to the Shortcuts section.
6. Add emoticon and “emoji” keys
Want to add a smiley, a frowny face, or a pout to your messages, all without having to remember and type out a bunch of colons, dashes, and parentheses?
When a simple “:-)” isn’t enough, there’s always the iOS emoji keyboard.
All you have to do is dive into the iPhone’s international keyboard settings and add the “Emoji” keyboard.
(“Emoji,” by the way, is a Japanese term for emoticons and tiny, often elaborate pictures in digital messages; think of them as emoticons on steroids.)
Here’s how to do it:
- Tap Settings, General, Keyboard, then tap Keyboards on the next screen.
- You should see a list of all the virtual keyboards supported on the iPhone, along with an “Add New Keyboard” button; go ahead and tap that last button.
- Scroll down the long list of keyboards until you find “Emoji,” then tap it.
- Now, close the Settings app, go back to your Messages or Mail app, and begin composing a new message. In the bottom-left corner of the keyboard, you’ll see a key with a globe icon stamped on it; tap that key.
- Your default keyboard will disappear, and in its place you’ll see a bunch of emoticons and emoji; swipe the keyboard, and you’ll find more. For even more choices, tap the tabs at the bottom of the screen.
- Ready to go back to your regular keyboard? Just tap the globe key again.
Having a hard time typing on your iPad? Try this: tap, hold and drag the keyboard apart.
7. Split the keyboard
Wish it were easier to type on your iPad while holding it in both hands? You can try, sure, but good luck stretching your thumbs across the screen.
Here’s a nifty trick, though: if you tap and hold either side of the keyboard and pull your fingers apart, the keyboard will split in two.
8. Type characters with accent marks
Yep, you can type letters with accents—everything from acute (“á”) and grave (“à”) accents to umlauts (“ä”) and tildes (“ã”).
Just tap and hold the letter you want to add an accent to; in a moment or two, a pop-up with a range of accent marks will appear.
Slide your fingertip to the accent you want, then release
Canada Pension Plan (CPP) ChangesFlexibility is Key in Canada Pension Plan Changes
The federal and provincial governments started to make changes to the Canada Pension Plan (CPP) in 2011 to give more options to those who want or need to receive the CPP before the age or 65 and to those who want to postpone taking their pension until after the age of 65. The changes are being phased in gradually from 2011 to 2016. Adjustments have been made to improve the flexibility of the CPP, and to adapt to the different ways that Canadians are approaching retirement these days. For many, retirement is a gradual process, rather than a single event. Personal circumstances, from employment opportunities, or lack of them, health, and other retirement income, affect the timing of retirement, and the gradual adjustments made in the CPP may make it easier for individuals, at the same time keeping the CPP sustainable.What is the Canada Pension Plan?
Changes to the Canada Pension Plan
The CPP is a Canadian government pension plan and is a joint federal-provincial responsibility. The CPP is based directly on workers' earnings and contributions. Nearly everyone over the age of 18 who works in Canada, outside Quebec, and earns over a basic minimum, currently $3500 a year, contributes to the CPP. Contributions stop at the age of 70, even if you are still working. Employers and employees each make half the required contribution. If you are self-employed, you make the full contribution. CPP benefits can include a retirement pension, a post-retirement pension, disability benefits, and death benefits. In general, the CPP is expected to replace about 25 percent of your pre-retirement earnings from work. The rest of your retirement income can come from the Canada Old Age Security (OAS) pension
, employers pension plans, savings and investments (including RRSPs
The following changes are in the process of being implemented.
CPP monthly retirement pension started after age 65
Since 2011, the CPP retirement pension amount has increased by a larger percentage when you start taking it after the age of 65. By 2013, your monthly pension amount has increased by 8.4 percent for every year after 65 up to age 70 that you delay taking your CPP.
CPP monthly retirement pension started before age 65
From 2012 to 2016, your monthly CPP retirement pension amount will decrease by a larger percentage if you take it before age 65. The monthly reduction for taking your CPP early will be 2013 - 0.54%; 2014 - 0.56%; 2015 - 0.58%; 2016 - 0.60%.
Work Cessation Test has been dropped
Before 2012, if you wanted to take your CPP retirement pension early (before the age of 65), you had to either stop working or significantly reduce your earnings for at least two months. That requirement has been dropped.
If under 65 and working while receiving a CPP retirement pension, you and your employer must pay CPP contributions.
These contributions will go to a new Post-Retirement Benefit (PRB), which will increase your income. If you have an employer, the contributions are split evenly between you and your employer. If you are self-employed, you pay both the employer and employee contributions.
If between 65 and 70 and working while receiving a CPP retirement pension, you have a choice about whether you and your employer pay CPP contributions.
You do have to complete and submit a CPT30 Form
to the Canada Revenue Agency to stop making contributions however.
General Drop-out Provision Increases
When your average earnings over your contributory period are calculated, a percentage of your lowest earnings are automatically dropped. Beginning in 2012, the provision was increased to allow up to 7.5 years of your lowest earnings to be dropped from the calculation. In 2014, the provision allows up to 8 years of lowest earnings to be dropped.
These changes do not
apply to the Quebec Pension Plan (QPP). If you work or worked in Quebec, see the Régie des rentes Québec
IndexCanadian Government PensionsPension Income Tax Slips