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Shifting Gears – A 40 Minute Lifestyle Seminar

Shifting Gears – A 40 Minute Lifestyle Seminar

‘Shifting Gears’ is a 40 minute presentation that helps retirees make the transition from years of saving and accumulating to the new life of spending and enjoying! In retirement in addition to managing money wisely, retires also need to use their money wisely.

Sometimes we forget that money is only a utility – and it is only useful when it is used to help us achieve our goals.

If retirees don’t have a plan to use their capital wisely they lose an opportunity for greater enjoyment, and even worse, the larger estate that is left behind may cause more grief than happiness for their heirs.

In the seminar the following issues are addressed.

• How to shift gears from growing wealth to using wealth.
• How to clarify financial, lifestyle and estate goals.
• How to determine what is essential capital and what is surplus capital.
• The pros and cons of five options for dealing with surplus capital.
• Six reasons why you might want to give heirs an ‘advance’ on their inheritance.
• Why the study at Harvard of 4,000 millionaires concluded that it was best if the
parents gave the money away – so their children could make their own money.
• How philanthropy can increase happiness for both parents and children.
• How family meetings reduce the possibility of a dispute over the estate.
• Knowing the risk and the cost of trying to protect against all unlikely events.
• How to make big decisions that involve both financial and emotional elements.
• Why retirees should ‘treat themselves’ to a reliable source of happiness.
• Why ‘surplus’ capital is not talked about.
• Why 70% of wealth transitions fail.

For more information and seminar dates contact Warren MacKenzie at (416) 979-3820 or cell (416) 904-7781 or

These Recent Retirees Have Substantial Assets But No Real Game Plan

These Recent Retirees Have Substantial Assets But No Real Game Plan

After long and successful sales careers, Mark and Marlene decided in 2017 to retire from the working world early. He is 56, she is 58.

Now Mark wonders whether he will have to go back to work to support their goals, which include “significant travel” and leaving an inheritance for their two children, who are in their 20s.

Marlene and Mark have amassed substantial assets thanks to hard work, “being conscientious savers” and some successful real estate transactions. Neither has a work pension. Mark is a “do-it-yourself” investor who is beginning to worry a bit about the responsibility.

“My performance has been mixed at best,” he writes in an e-mail. “I get lured into buying high-flying growth stocks or [exchange-traded funds] without a proper plan of allocation and diversification.” With low interest rates and “the markets seemingly near the end of a bull run, I have become uncomfortable that we may not have enough saved to stay retired,” Mark adds. He’s thinking about hiring a discretionary investment firm “so I can reduce the amount of time I spend in front of the TV watching BNN [Bloomberg] and CNBC, like I have been lately.”

Mark is becoming keenly aware that he will have to draw up a comprehensive financial plan to determine if they have enough money, whether it is invested properly and how to draw on it in the most tax-efficient way. Their spending goal is $85,000 a year after tax.

We asked Warren MacKenzie, head of financial planning at Optimize Wealth Management in Toronto, to look at Mark and Marlene’s situation. Mr. MacKenzie’s most recent book is The Philanthropic Family: 5 Keys to Maximizing Your Family’s Happiness and Leaving a Lasting Legacy.

What the expert says

Mark and Marlene have to plan for a long retirement, Mr. MacKenzie notes. They would like to leave $500,000 (with today’s purchasing power) to each of their two children.

Mr. MacKenzie prepared his forecast based on the principles of essential, rather than surplus, capital explored in his new book. The capital required to achieve the stated goals, including the inheritance, is considered essential capital. Looked at this way, Mark and Marlene have nothing to worry about.

“They have a $1-million surplus that can be used to spend more, give to the children sooner rather than later, invest more aggressively or support their favourite charity.”

The forecast shows that with an average real or inflation-adjusted rate of return of 3 per cent (a 5-per-cent return with inflation of 2 per cent), they should be able to maintain their lifestyle and their current net worth of more than $3-million, Mr. MacKenzie says.

Given their long-time horizon, in order to have some inflation protection, a significant portion of their portfolio should be in investments that have the potential for capital gains, Mr. MacKenzie says. Dividends and capital gains are also tax efficient

As it is, they have about 45 per cent of their portfolio in equities, 20 per cent in fixed income and 35 per cent in cash. “This high allocation to cash suggests that they are not following a disciplined investment process. They should consider using some of the cash to increase their allocation to equities.”

By drawing up an investment policy statement and following a disciplined investment process, Mark will likely earn a better long-term rate of return “while spending less time watching and trying to time the market,” the planner says. The investment policy statement will help him rebalance the portfolio when necessary “in a non-emotional way.”

Next, Mr. MacKenzie looks at the couple’s retirement cash flow. They plan to start taking Canada Pension Plan benefits at the age of 65. But since they don’t need the money, “if they are in good health and expect to live well into their 80s, they should consider delaying the start of CPP until age 70,” the planner says. This would increase their monthly benefits by 42 per cent.

Between now and the time they begin drawing government benefits, they should each make annual withdrawals from their registered retirement savings plans sufficient to bring their taxable income up to about $42,000 each a year, Mr. MacKenzie says. This will allow them to take advantage of their comparatively low current income-tax rates, so they’ll end up paying less income tax in the long run. They may also avoid the clawback of their Old Age Security, which begins at an income of about $76,000 a year.

Finally, “if they want to simplify their life, make a guaranteed return, be tax efficient and also guarantee that their children receive a $500,000 inheritance each, they should look into tax-exempt whole life insurance,” Mr. MacKenzie says. In one respect, an investment in tax-exempt insurance is similar to an investment in their tax-free savings accounts (TFSAs) in that it would allow them to move a portion of their invested capital out of a taxable account and into an insurance policy where it could accumulate tax-free. The key features of this type of insurance is that there is no stock market risk and no income tax on the growth in value of the policy. The eventual death benefit is received on a tax-free basis by the beneficiaries, in this case the two children.

Client situation

The people: Mark, 56; Marlene, 58; and their two children, 23 and 25

The problem: Figuring out whether they’re well-set financially to achieve their goals.

The plan: Sit down with an investment counsellor and draw up an investment policy statement to keep themselves on track and make rebalancing easier.

The payoff: No more fretting in front of the TV set watching the business news.

Monthly net income: No income, cash flow drawn from savings and investments as needed.

Assets: Cash and short-term investments $255,000; GICs $100,000; stocks $375,000; mutual funds $25,000; real estate investment trusts $376,000; his TFSA $60,000; her TFSA $65,000; his RRSP $685,000; her RRSP $450,000; locked-in retirement accounts $92,000; residence $1-million; cottage $350,000. Total: $3.8-million

Monthly outlays: Property tax $540; home insurance $70; utilities $265; maintenance, garden $125; car insurance $185; fuel $335; oil, maintenance, parking $255; grocery store $750; clothing $110; gifts $180; charity $170; vacation, travel $750; other discretionary $500; dining, drinks, entertainment $465; personal care $135; club membership $15; pets $200; subscriptions $50; cottage, boat expenses $400; health care $90; life insurance $200; phones, TV, internet $210; TFSAs $915. Total: $6,915

Liabilities: None

Warren MacKenzie is Head of Financial Planning at Optimize Wealth Management


4 Key Tips to Ensure Your Bank is Giving You a Deal

4 Key Tips to Ensure Your Bank is Giving You a Deal

People are often quite loyal to their financial institutions – they usually decide to have all of their credit cards and financial products under the same bank. Initially it seems like the most convenient option, but you may not be acquiring the best deal. Shop around and keep the following in mind:

1. Be Mindful of the Hidden Fees

Banks offer a plethora of information online and in physical documentation regarding their fees. Make yourself aware of those fees. Some banks charge $2 to get a statement by mail. There is a dormant fee (when the account has remained inactive for so long). The idea is to find a bank that doesn’t take on so many fees or offers free services.

For example, a free checking account that includes bill payments, email money transfers, debit purchases, etc. may be something to consider. You can access the bank to withdraw money, cash a check that doesn’t include a long hold, etc.

2. Start looking elsewhere

If you notice your bank consistently raises its fees or your fees, you may want to do some shopping around to find a financial institution that offers a lower rate. If you do find a better rate than what your bank is offering you, bring it to them and see if they can match it. Give them an ultimatum, and if they can’t match it, then leave.

Too often, people go to a bank and accept the offers they are presented with without taking the time to really look at them. People need to do some research about their rewards programs, monthly fees, review customer comments, etc. to ensure their getting the best deal.

3. Look at Your Services

Talk to the bank about your current model. What kinds of accounts do you have? What are they offering? Confirm with them whether or not you’re existing accounts are fulfilling your needs and if you’re getting the best deal.

It’s important to look at your statement and investigate if you’re being charged reasonably. If there are unnecessary charges in your account, talk to your bank and outline to them that you’re being left with no choice but to seek another financial institution.

4. Talk to an Advisor about Your Portfolio

Regular updates and feedback is an important factor in building a good foundation with your advisor. Talk to your investment advisor about your portfolio and set how conservative or aggressive you want your investment strategy. As well as locking in risk tolerance, you should also look at the various other factors that come in to play like income and liquidity needs, time horizon, etc.

3 Red Flags That Could Affect You Living Comfortably During Retirement

3 Red Flags That Could Affect You Living Comfortably During Retirement

Retirement… your plan may be well-thought out, but there could always be an unforeseen event that could derail your journey. You could live a lot longer than you anticipate, have more financial health problems or suffer from a rise in inflation. But, there are certain measures you can take to ensure your money outlasts you.

Know when to Downsize

Retirees who did not save enough and want to live in their home may need to consider their reality. If it costs more to stay in your home than you can afford, you may need to be honest with yourself and make the hard decision to downsize. Your home is an asset, but if it’s too much, it could become a liability and ultimately a financial burden. An overly large home isn’t a necessity in retirement, but money is.

Helping Your Children Way Too Often

All parents want to help their children, but many of them give them way too much money too quickly. This can hurt their only financial affairs. It’s a good idea to set up an estate that you can dip into when needed, but should you not, your children can benefit later on.


If you spend an excessive amount of money in the early part of your retirement, you won’t have enough to live on as you age. Be cautious of focusing all of your money into saving vehicles like GICs and cash. Whilst it may seem like the safest option, you may be missing out on opportunities and even lose money after you pay taxes and factor in inflation. This, along with overspending, means you’ll need to make some major lifestyle choices if you don’t want to suffer financial ruin.

Retirement is an uncertainty in life, but what you do to prepare for it can make or break you in the grand scheme of things. Don’t make the mistakes that will affect how good you could live during retirement.

Welcoming Industry Veteran and contributor to The Globe and Mail, Warren MacKenzie as our new Head of Financial Planning

Welcoming Industry Veteran and contributor to The Globe and Mail, Warren MacKenzie as our new Head of Financial Planning

We are pleased to announce that Warren MacKenzie has joined Optimize Wealth Management as our new Head of Financial Planning.

Warren brings with him over thirty years of experience in the financial services industry. Warren is well known for his advocacy for investor education and his fixation on bringing transparency and objectivity to the financial planning industry. An educator at heart, in 2004, Warren launched Weigh House Investor Services where he provided unbiased investment advice to his clients, which focused on uncovering hidden investment costs while still optimizing their specific financial picture. Warren is the author of The Unbiased Advisor, Zen and The Art of Wealth, and co-author of the New Rules of Retirement and The C.A.R.P. Financial Planning Guide. He is a regular contributor to various media publications such as The Financial Facelift in the Globe and Mail as well as the Money Saver magazine. Warren is a Chartered Accountant, a Chartered Professional Accountant and also holds the Certified Investment Management Analyst Designation (CIMA), and the Chartered Investment Manager Designation (CIM).

Warren has always been passionate about delivering advice rooted in sound investment principles to help clients achieve their specific financial goals and looks forward to continuing this tradition at Optimize. In this role, Warren will continue to work directly with clients and their financial planning needs in addition to being in charge of the overall financial planning direction which Optimize Wealth Management takes.

With Warren’s passion and dedication to always do the right thing for his clients along with the Full Suite of Financial services and solutions that Optimize Wealth Management offers we will continue to ensure everyone succeeds and prospers together. He will make a tremendous role model for our employees and his advice will be invaluable to our current and future clients.

 Please join us in welcoming Warren to the Optimize Wealth Management Team.

5 Strategies to Retain Financial Health

5 Strategies to Retain Financial Health

With the summer now officially over, I thought it would be a good idea to get back to the basics of saving and compile a list of techniques that, when used diligently over time, will reward your wallet and bank account.

Prioritize Spending

The first and most important thing is to determine what you consider necessary. What is most sought after? Do you want to eat out and spend time with friends? Would you rather buy a vehicle or own a home? Whatever is essential to your quality of life, focus on them and cut out any unnecessary purchases that don’t fulfill you.

Work Together on Finances

When it comes to household finances, both parties should be involved in the process. In many cases, one person is left to do it all, totally absolving the other from any responsibility. This can lead to problems when things are not monitored closely, or the person holding that responsibility can feel resentful about having to take care of it all. Collaborating and regularly talking about finances can alleviate stress in a relationship, stabilizing any bad spending habits.

Early Retirement Isn’t Likely

Many people would love to retire early from work which is attainable, but you need to save for a long time and make some sacrifices. Make sure to add 10 or more years into your working life and realize that the more money you add to the savings, the less years you’ll spend using it to live.

Avoid Using Credit for Back-Up Plans

Credit cards and a line of credit should only be used in cases of emergencies. It may help you through when you’ve lost your job and haven’t gotten another, but you’re still going to have to pay that money back.

Slowly Pay Back Your Debt

When tackling your debt, do it steadily. You’re going to be faced with challenges, but make sure the goal is something you can actually reach.