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Borrowing against your life insurance policy is one option if you don’t want to touch your investments, but there are drawbacks.

Universal and whole-life policies last your entire life and pay out a benefit upon your death. These two types of policies have a cash value — an investment portion of the policy that takes time to build up — and can be borrowed against or drawn from. Financial institutions will lend as low as 50, but sometimes up to 90 per cent of the cash surrender value on a policy. An added advantage of borrowing as opposed to drawing the funds out, the loan against the policy is going to be tax-free.

Keep in mind that taking out a loan on your life insurance policy’s cash value the financial institution gets claim the proceeds first, and then what’s left would be paid to the beneficiary, reducing the total death benefit upon your passing.
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Should you borrow against your life insurance policy? It depends, but beware the risks Borrowing against your life insurance policy is one option if you don’t want to touch your investments, but there are drawbacks.

Now that kids are heading back to school, here is a lesson for parents and grandparents on the ins and outs of RESP accounts. A good RESP strategy goes beyond the basics and considers the type of account, the investment opportunities, and the tax and estate implications.

1. Group RESP accounts, known as scholarship plans, are heavily promoted to new parents. These accounts tend to have high fees, penalties for missing contributions, conservative investments with low returns, and restricted eligible post-secondary programs.

2. Open a family plan if you have two or more children, or a grandparent can open an account for their grandchildren. Family plans allow the subscriber to add future children after they are born. The primary advantage of a family RESP is that the government grants and income can be withdrawn for any beneficiary of the account. The withdrawals can be used disproportionately, depending on the needs of each beneficiary. A secondary benefit is only having to manage one account.

3. The investment selection should evolve as the children get older. When the children are young, you should pursue a more aggressive asset allocation for the investments. As a child gets closer to needing the money, your stock allocation should decrease — especially if they are within five years of post-secondary education.

4. A portion of the withdrawals from an RESP comes out tax free. When you take money from an RESP, you can elect to have some of it treated as a post-secondary education (PSE) withdrawal and some treated as an education assistance payment (EAP). A PSE represents the original contributions to the account. An EAP is the accumulated income and growth, as well as the government grants and bonds. PSE withdrawals are tax free and EAPs are taxable. The taxable withdrawals are reported by the student beneficiary and since their incomes tend to be low, they may not end up paying tax on the withdrawal. Especially given they can claim a tax credit for post-secondary tuition to reduce tax if their income exceeds the basic personal amount.

5. Naming a successor subscriber is an important proponent when opening the RESP account. This way the successor subscriber can take over a RESP account if the original subscribers die. Subscribers can also include a clause in their will appointing one. These designations are important — especially for grandparents who are more likely to die before an RESP account is depleted.
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Here's an RESP strategy for parents and grandparents that goes beyond the basics Now that kids are heading back to school, here is a lesson for parents and grandparents on the ins and outs of RESP accounts.

One simple, effective and scientifically proven prescription for better health is planting more trees. The idea of planting more trees in urban environments is so simple, affordable and effective that it’s hard to understand why we aren’t applying it more urgently, especially with mountains of evidence to show how much good trees can do.

While trees are beautiful and certainly benefit the environment, the most practical argument for planting more is that they provide a demonstrable public health benefit, both in the preventive and therapeutic sense.

Here are 10 ways planting more trees in cities makes people healthier:

- A meta-analyses showed that an increase in vegetation was significantly associated with two to three per cent lower odds of mortality from cardiovascular disease. These studies included data from 18 countries and over 100 million people.

- By improving health, trees reduce the cost of health care, allowing a strained system to take care of more people.

- Trees help reduce ground-level concentrations of urban air pollution, especially in areas with high pollution concentrations, as such improving air quality.

- Trees provide shade that cools hot urban environments, including buildings with no air conditioning. Less heat in summer means fewer premature deaths.

- Trees promote healing. A study in a Pennsylvania hospital compared post-surgery outcomes for gallbladder patients who recovered in rooms with a treed view to patients in rooms facing a brick wall. Those with a treed view had shorter stays and needed fewer pain medications overall.

- Trees improve mental well-being. A published study showed that people who walked 90 minutes in a natural setting experienced less repetitive negative thinking, or rumination, which is corrosive to mental health. Spending time in natural environments has also been shown to be helpful in alleviating the symptoms of post-traumatic stress disorder, anxiety, depression and anger disorder.

- Trees are an important element of outdoor environments that support physical activity.

- People who live among trees and other greenery get more sleep, which directly benefits physical and mental well-being.

- Playing regularly in green spaces is linked to milder symptoms for kids with ADHD (attention deficit hyperactivity disorder).

- Adding trees is strongly associated with reduced crime, while removing trees is strongly associated with increased crime.
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Bringing forests to the city: 10 ways planting trees improves health in urban centres The idea of planting more trees in urban environments is so simple, affordable and effective that it’s hard to understand why we aren’t applying it more urgently, especially with mountains of evidence to show how much good trees can do.

Lower interest rates and a weaker U.S. dollar could set up the Toronto Stock Exchange to have a strong second half of the year.
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Video: TSX set to shine in second half of year Lower interest rates and a weaker U.S. dollar could set up the Toronto Stock Exchange to have a strong second half of the year.

With these six strategic tips, discover how you can maximize vacation benefits for better productivity and well-being.

1. Plan Ahead for Maximum Anticipation
2. Avoid the Binge: Opt for Shorter, More Frequent Breaks
3. Stay Active
4. Choose Experiences Over Things
5. Set Realistic Expectations
6. Integrate Vacation Elements Into Everyday Life

Understanding how different vacation lengths and activities impact restoration and productivity can help you plan more effectively. Whether you prefer short, frequent breaks or longer, occasional vacations, mindful planning and prioritizing enriching experiences are key. Doing so can maintain high performance and well-being.
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6 Scientific Ways To Maximize Vacation Benefits And Well-Being With these six strategic tips, discover how business leaders can maximize vacations' benefits for better productivity and well-being.

Youth unemployment jumped to 13.5% in June, a level not seen since September of 2014, excluding the pandemic. Since June of last year, youth unemployment jumped by 2.1 per cent. Brendon Bernard, economist with Indeed Canada, says deteriorating business sentiment and a population boom is driving this spike in unemployed young people. Bernard noted in his summer jobs report, that overall job postings as of early May are down 23 per cent compared to 2023 and down 39 per cent from 2022. The number of job postings have now returned to levels seen since before the pandemic and in some cases, below pre-pandemic levels. This could be attributed to businesses coming to grips with the slow economic situation and the gradual fallout of a high interest environment.

Canada welcomed 1.3 million newcomers in 2023 and the 15–24-year-old population cohort grew by an estimated 335,700 people since last June, according to Statistics Canada. Statistics Canada reported job vacancies were down significantly in the first quarter of 2024 across a wide variety of industries, with year-over-year decreases in manufacturing and utilities (-35.3 per cent), sales and service (-33.7 per cent), natural resources and agriculture (-29.3 per cent), trades and transport (-22.6 per cent), art culture and recreation (-24.2 per cent) and business and finance (-15.1 per cent).

A lot of those new Canadians are youth in the 20s-30s age, so there is far more competition for the existing jobs. In the long-term, increase in new Canadians can lead to further economic opportunity and new businesses, but in the short-term it certainly means more competition.
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Jobless summer: Why youth unemployment is at a decade high Youth unemployment jumped to 13.5% in June, a level not seen since September of 2014, excluding the pandemic.

Leaving Canada without prudent planning could see assets taxed at rates of more than 50 per cent.

Determining residency status mainly comes down to time spent outside of Canada and residential ties to Canada. Someone can become a non-resident without becoming an emigrant. This is called a factual tax resident of Canada which is in essence a Canadian living abroad. Factual residents of Canada normally avoid departure tax, but have other considerations. Their global income is subject to Canadian tax. They normally receive a credit for taxes paid in other countries, but must still pay any shortfall difference to Canada.

Conversely, an emigrant is considered to have severed ties with Canada. When you become an emigrant, you can face a departure tax on Canadian assets, which can be significant. On the date of departure, they are deemed to have disposed of applicable assets at fair market value. This is referred to as the departure tax, though it is really triggering a tax on unrealized capital gains. There is potential to defer tax on deemed dispositions until the assets are sold, but this can be challenging to implement. The types of assets that are deemed sold upon departure are non-registered investments, shares of a private corporation (CCPC), partnership interests and non-Canadian real estate. Assets that are usually exempt include Canadian real estate, registered investments (such as registered retirement savings plans (RRSPs), tax-free savings plans (TFSAs) and pensions), employee stock options, life insurance policies (excluding segregated funds) and qualified Canadian business properties. An emigrants global income is typically only subject to tax in the new country.
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Thinking about leaving Canada? Here are the financial considerations you need to know Leaving Canada without prudent planning could see assets taxed at rates of more than 50 per cent.

It takes time and attention to look after other people – and ourselves. And there are so many distractions to overcome.

Almost everything worthwhile requires time and attention, and if we want to build a better life, we need to receive more and we need to give more. We obviously need to offer more time and attention to our loved ones – really speaking and listening to each other rather than conducting conversations while looking at a screen. And obviously we need to spend more time on, and pay more attention to, the things we love to do. The problem is that we know these things, but we struggle to do them, because we do not seem able to give ourselves – specifically our minds – the time and attention we deserve.

It is difficult and painful to be in true contact with the vulnerable, hungry, in-need parts of our children – and even more so with these parts of ourselves. It is emotionally demanding to try to understand this experience and stay with it, to allow those feelings into our minds, perhaps even to feel overwhelmed by them for a time, to give voice to them and attempt to put them into words as best we can.

It is hard work, the development of a discipline and an emotional capacity, and it matters. Because out of time and attention can grow all the other things that make life and mental health better: the capacity to listen, to care, to try to understand.
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If you care about someone, show them – and put away your phone It takes time and attention to look after other people – and ourselves. And there are so many distractions to overcome.

Income splitting is the idea of shifting income from the hands of one family member to another, who will pay tax at a lower rate. The challenge? If you simply give your spouse assets that generate income, the attribution rules in our tax law will generally cause any income earned on those assets to be taxed in your hands.

1. Transfer money for a business. If you give or lend your spouse money to earn income from a business, the income won’t be attributed back to you.

2. Make a spousal loan. It’s possible to lend money to your spouse, charge the prescribed rate of interest, and have your spouse earn income on the money with no attribution back to you.

3. Lend for second-generation income. If you don’t want to charge interest on the loan to your spouse, try lending the money for a period of time – say five or 10 years – and charge no interest. The attribution rules will apply to the original loan amount every year, but you can take the income earned each year and move it to a separate account for it to grow. This is called second-generation income, and is not subject to the attribution rules.

4. Give capital dividends to your spouse. If you own a corporation that has a capital dividend account (CDA) balance, you can pay that amount to yourself as tax-free capital dividends and make your spouse a shareholder in the corporation too by giving your spouse some shares.

5. Pay the household expenses. If you’re the higher income earner, consider paying most or all of the household expenses. The attribution rules won’t apply to income earned by your spouse on his or her own money.

6. Swap assets with your spouse. It’s possible to transfer income-producing assets to your lower-income spouse. The attribution rules won’t apply if your spouse pays you fair market value for those assets.

7. Pay your spouse a salary. If you own a business, you can pay your spouse for work he or she performs in that business. It’s a deduction to the business and taxable to your spouse.
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Splitting income with your spouse can save big tax dollars if done properly Income splitting is the idea of shifting income from the hands of one family member to another, who will pay tax at a lower rate.

Take a pause, whip out your smartphone and run this calculation before you make a purchase. The rule is simple, take the cost of something, divide it by the number of times you’ll use it, and if it’s less than $1 per use, buy it!

This “powerful pause” only takes a minute to effectively shift you from spending on autopilot into take-control mode. When you sprinkle in a cost-per-use calculation, not only will you be in complete financial control mentally, you’ll have concrete math to guide your decision-making.

Now there are plenty of experiences that won’t fit perfectly into a cost-per-use formula (concert tickets; travel experiences; tutoring for your kids; campsite bookings; etc.). Prioritize experiences that are going to be most valuable and meaningful to you. If driving lessons will change your whole life, and possibly your career, you’ll probably choose that over tickets for a show. If travelling through France is a lifelong dream, choose that one big trip over a series of mini-getaways you’re not that excited about.

The $1 rule is all about stretching your hard-earned money as far as it can go. It’s going to prompt a mental-prioritization exercise, which is an important financial skill.
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The $1 rule can turn your life around. Here’s how it works Take a pause, whip out your smartphone and run this calculation before you make a purchase.

We have the makings of a retirement doom loop in the economic disruption caused by inflation and high interest rates. Inflation stretched household budgets, and then high interest rates piled on. People know they should save for retirement but can’t. They feel hopeless and either disengage or make sketchy plans such as relying on their home equity or working longer.

Here are some questions to work through in assessing your retirement prospects, with thoughts on how to move things forward even in challenging times.

1. How much will I save for retirement in 2024?
2. What have I saved so far?
3. When can I save in the future?
4. What does my employer offer to help me?
5. Can I work past age 65?
6. Can I use my home equity?
7. Can I earn more?
8. Do I need professional help?
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An eight-step plan to help you stop feeling bad about your retirement outlook in these tough times Here are some questions to work through in assessing your retirement prospects, with thoughts on how to move things forward even in challenging times.

Investors can still look to tilt their portfolio in certain ways to position themselves for possible longer-term gains. Keep in mind that the rate move was very much widely anticipated. Stocks and the market have a good way of pricing in expectations well ahead of time. Thus, we would certainly not suggest doing anything dramatic to a portfolio since the rate cut is likely already reflected in the valuations of securities.

Dividend stocks
Now, a rate cut won’t help all companies. Those with fundamental problems will still have them. But it should be positive for dividend stocks in general.

Mergers and acquisitions
Canadian stock market valuations remain low (sigh) and lower rates will encourage buyers to make a move while prices are cheap. We would expect a lot more M&A activity this year as confidence returns to the market now that the inflation-boogey man has been put back in the closet.

GICs
Rates for one-year terms are currently about 5.5 per cent if one shops around. That may not sound like much, but with zero risk, it’s not bad. It beats the year-to-date return of the S&P/TSX composite, at least.

Long-term bonds
The bond market has been horrible now for several years. Bonds are highly sensitive to rates, and when rates spiked upward, bonds got crushed. But bonds can quickly react to rate cuts, and we certainly would expect a better return from bonds over the next five years than has been achieved during the past five years.

Growth stocks
The pain of 2022 is still fresh in our minds. We saw hundreds of companies report great earnings growth, only to have their stocks crushed. It was disheartening. That’s what higher rates and higher inflation do to growth stocks, but growth stocks should continue to improve as rates continue to fall. As a bonus, growth stocks are also often the subject of M&A activity.
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5 ways to prepare your portfolio for more rate cuts Investors can still look to tilt their portfolio in certain ways to position themselves for possible longer-term gains.

Despite the fact that millennials and gen Z people are keeping their finances top-of-mind, this demographic is not considering one essential pillar of financial security — life insurance.

Here’s what you need to know about how to financially protect yourself and your loved ones down the road.

What is life insurance?
Life insurance is a contract between you and your insurer in which the insurer agrees to pay a specified lump-sum, amount to the person or people named as beneficiaries in the event of the insured person’s death.

I’m a young person; what can life insurance do for me?
Being young and healthy can make it easier to get approved for coverage, at the same time the cost is going to be lower.

When should I start thinking about getting life insurance?
If you want to keep the costs low, the sooner the better. Most people when they start to accumulate debt, such as mortgages would be better of purchasing a policy on themselves personally instead of the mortgage coverage that the banks offer.

How long does life insurance last?
There are two types of policies that are available for purchase. The first and generally cheaper option is a Term. Typically term policies are in place for 10 or 20-years, your premiums remain the same throughout term. Your policy renews at the end of the term at a new higher rate.
The second is a permanent policy (Whole & Universal) these policies never expire and offer the added option of building a separate investment portion called Cash Surrender Value (CSV) that can be built into the monthly costs. The CSV can be accessed if you wish to down the road or it can be utilized as a collateral to finance a major purchase. Additionally, the death can become a pillar as part of your estate planning.

How much coverage do I need?
It's important to understand how much money your loved ones would need if you were to pass away. Consider factors such as lost income, outstanding loans and debts, your children’s education costs, and your family’s lifestyle.

So, how do I know which type of life insurance is right for me?
The first step is formulating a detailed needs analysis to find out what amount of coverage is suitable for you. Secondly the type of policy (term/permanent) would have to depend on what this coverage means to you financially and also what monthly cost is affordable. There are a range of options even within these two different types of policies and it's always good to speak with a licensed life insurance advisor.
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Life insurance isn’t just for your parents. Here’s what young adults need to know Despite the fact that millennials and gen Z people are keeping their finances top-of-mind, this demographic is not considering one essential pillar of financial security — life insurance.

As a parent, securing your child’s financial future is a top priority, and deciding when to buy insurance is a key part of this process.

Factors To Consider When Buying Insurance for Children:
- Child's Age (lock in low rates at early ages)
- Child's Health (little to no health issues at early stages)
- Family Financial Situation (long-term expense needs to be budgeted for)
- Future Financial Goals (permanent policies can be used for major purchases later in life)
- Reputation of the Insurance Company (secure your investment with a company that has longevity)

Optimal Timing For Different Types Of Insurance:

Life Insurance (generally the earlier the better)
- At Birth
- During Early Childhood
- During Adolescence

Health Insurance (living benefits)
- At Birth
- Before starting school

Education Insurance
- Early Childhood (allows investment portion of the policy to compound its growth, can also provide tax advantages)
- Pre-Teen Years (making larger contributions allows you to catch up for lost time)

Deciding the best time to buy insurance for your children involves careful consideration of various factors such as the child’s age, health, and the family’s financial situation.

To navigate these decisions effectively, consult a financial advisor . They can provide personalized guidance based on your family’s financial situation, goals, and needs. They can help you understand the various insurance options, assess the best timing for your purchases, and ensure that your financial plan aligns with your long-term objectives.
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When Is The Best Time To Buy Insurance For Your Children? Learn key considerations and the optimal timing for buying insurance for children. Explore the pros and cons of early insurance.

Assuming that the capital gains tax proposals will become law as the government has promised, what should Canadians do to prepare? Since we’re at the ninth hour and heading toward June 25, here are some ideas.

Corporate owners: The changes stand to impact those with corporations more than anyone else. Unlike individuals, corporations will face tax on two-thirds of all capital gains (there is no $250,000 threshold below which the 50-per-cent inclusion rate remains intact as with individuals). This will impact the “capital dividend account” (CDA) of a corporation. The CDA is increased by the tax-free portion of capital gains realized, and this CDA balance can be paid out as tax-free capital dividends to shareholders. This amount will be significantly reduced starting June 25, 2024, when just one-third (the tax-free portion) of capital gains will be credited to the CDA. This will have a greater impact on taxes paid overall than the increase in income taxes to the corporation from the proposals.

Investors: If you have any securities that have appreciated in value and that you expect to dispose of in the next few years, consider selling them to realize the capital gain prior to June 25. It’s the settlement date, not trade date, that matters, so make sure settlement takes place prior to June 25.

Seniors: The older you are, the more sense it could make to trigger capital gains before June 25, particularly once you approach age 90. The reason is simply that it may not be that many more years before you’ll be deemed to have sold your assets at fair-market value upon passing away. When assets transfer to children or an individual other than your spouse, there could be tax to pay on a capital gain.

Family members: Going forward, it could make sense to share ownership of assets so that the capital gain realized by each family member remains at or below $250,000 when an asset is sold. Speak to a trusted adviser about this first since you may give up control in this case, and you’ll want to avoid the attribution rules if your spouse is going to be an owner.
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Consider these last-minute planning ideas before capital-gains tax changes arrive Assuming that the capital gains tax proposals will become law as the government has promised, what should Canadians do to prepare? Since we’re at the ninth hour and heading toward June 25, here are some ideas.

Ontario earns an A for its decision to require high school students to score 70 per cent or better on a financial literacy test in order to graduate.

Here are some key questions to consider for the test, with some thoughts on why they’re relevant.

1. What is a credit score, and why is it important? The score that sums up your history as a borrower is increasingly being used not just by people selling mortgages, credit card and loans, but also insurance companies, prospective employers and landlords.

2. Name the biggest benefit and risk of owning a credit card. The biggest benefit is that using a card responsibly helps build a good credit score, while the big risk is that you overspend and end up paying 20 per cent interest.

3. How can you tell if you can afford to rent your own place? An old rule says your rent should take up 30 per cent or less of your gross annual pay.

4. How much money do you need to buy a home? You have to cover a down payment of at least 5 to 20 per cent, depending on the cost of the home, plus monthly payments for your mortgage, property taxes, insurance, heat, electricity, water and internet.

5. What’s the difference between saving and investing? Saving is money you want to keep safe because you might need it within five or so years and you don’t want to run the risk of losing any of it. Investing is where you take on some risk of short-term losses in order to have a higher return in the end.

6. What’s the key to investing success? Three boring things – adding money to your investment accounts regularly, committing to your investments for the long term and having a good mix of investments so that you can ride it out when one or more of your holdings disappoint.

7. How would you describe the role of banks? Banks are retail stores selling financial products.

8. What’s the connection between social media and spending money? Social media connects people, sometimes in ways that make them feel they are missing out or not measuring up to their friends.
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This is the personal finance test high schoolers should have to pass before graduating Here are some key questions to consider for the test, with some thoughts on why they’re relevant.