What our Specialized Software
The environment we live in is complex. Income tax is tricky enough, however when we factor in compound interest and inflation, RRIF/LIF/LRIF rules, loans, CPP/OAS, life insurance, RESPs, real estate... and especially the complex way tax interacts with the various forms of capital, the problem of integrating them into a single cash flow model is daunting. It requires serious computing, far beyond the ability of most financial planning software.
The problem is simple to explain. We are creatures of habit; and while we want a smooth predictable net income (lifestyle) from year to year, our gross income is very erratic. For instance, things such as salary or loan payments go up, down, sideways, and after a period of time they go away. Likewise for pension or entitlement income (CPP/OAS). Then we have future income from a capital gain such as selling a home or business, or an inheritance. These gains come in big chunks at various times.
What our Specialized Software
If you set your net income target (lifestyle) too high, your funding will run out too soon. If it is set low enough, you will have a comfortable retirement or a large estate to pass on. This is the balancing act that our Specialized Software
No "shortfall/deficit", no "average tax rate", no "come back next week"!
The tax (T1) treatment is 100% inclusive, there are no approximations. Registered, non-reg (tax accrued) and equity (tax deferred) funds are fully differentiated, tax-wise. The tax on non-reg funds is EXACT. The principal portion of non-registered income is tax-free, only the growth component (differentiated as to dividend, capital gains and interest income) is taxed. This accuracy in the tax treatment is absolutely unique! (Hint... the tax is actually more current than your latest T1 program, since it is based on the UPCOMING year rather than last year!) All tax brackets (fed and provincial) are fully indexed as per the spring 2000 budget!
This is the "math" that our Specialized Software
The beauty of this application, apart from the accuracy, is that the data which drives the program comes from the subject's own knowledge base.... lifestyle need, current capital, loans, expected salary/pension, future inheritance/capital gain, etc... This doesn't require the consultant to make any subjective decisions since it is data which anyone can quantify. The process is as simple as:
| "I earn $65,000 and plan to retire in 10 years. I have $50,000 in my RSP, $25,000 in non-registered capital and I plan to downsize my home in 15 years, realizing a $200,000 capital gain. Can I acheive a retirement lifestyle of $30,000 and have my capital just run out at age 90? and how should I invest/save/live pre-retirement in order to get there? Or, instead of just dying broke, how do I ensure I pass on a specified (net) estate?" |
Of course you will make subjective decisions about future interest rates, the consumer price index, when you plan to retire, pay off your loan, or whether or not CPP will continue to exist; after all, this is the nature of financial planning. One thing stands out however; the program is 100% consistent. This is why it is so effective.
If you took the above scenario to two different consultants, as long as the interest rate, province and Consumer Price Index assumptions are the same, those two consultants will create exactly the same cash/tax projection. Not the case with most software programs which require many subjective decisions by the consultant.
This is the same as having two accountants prepare a tax return. As long as the financial data (T4, T5s, etc) supplied by the client is the same for both, and they are applied similarly by the accountant, the tax returns produced will be consistent.
SPREADSHEET-BASED software just will not solve the above plan!
| For a limited time we offer this sophisticated analysis of your retirement and estate income scenarios at No Cost to allow us to introduce our full range of new financial, life planning and travel programs to you. This is open to any qualified individuals or couples approaching 50, with sufficient assets or income, and options available, to them to make the analysis meaningful. They should also have a genuine interest in beneficially shaping their post age-55 retirement years and future estate(s). We welcome all enquiries. |
