To ensure their children's financial security after they're gone, an Alberta couple seeks expert advice on optimizing their substantial assets and planning for the future. With a wealth of resources at their disposal, including investments and insurance policies, Russel and Janice aim to craft a comprehensive plan that balances retirement goals with long-term support for their dependents.

Empowering Your Legacy: Secure Your Family’s Future with Strategic Planning

Navigating Wealth Management for Long-Term Security

Russel and Janice have amassed significant financial resources over the years. After selling their health practice, they now possess over $8 million in their jointly owned professional corporation, alongside substantial RRSPs and IPPs. Their investment portfolio is diversified, with 70% in stocks and equity-based ETFs and 30% in fixed income. The couple aims to provide each of their two adult children, who face unique health challenges, with approximately $5,000 per month after tax.Russel, currently earning $120,000 annually part-time, and Janice, who has effectively retired, are seeking clarity on how to achieve this goal. They work with a financial advisor but need a more detailed understanding of their options. By leveraging their considerable assets, they hope to ensure their children can live comfortably without financial strain.

Evaluating Insurance Policies for Optimal Coverage

Russel holds a $2 million term life insurance policy that matures soon and comes with a steep renewal cost. He has been advised to consider a corporate whole-life insurance policy but remains uncertain about its benefits. Evaluating these options is crucial. A fee-only planner can provide comprehensive projections that incorporate personal and corporate investments, ensuring all aspects of their financial strategy align with their long-term objectives.The couple also owns a home valued at $800,000 and maintains various savings accounts, including TFSAs and RESPs. Their youngest child qualifies for an RDSP, while their oldest does not. Exploring programs like Alberta’s Assured Income for the Severely Handicapped (AISH) could offer additional support for their youngest child.

Strategic Asset Allocation for Sustainable Income

To generate sustainable income, Russel and Janice should adopt an asset allocation strategy that balances risk and return. An overall strategic mix of 60% equity and 40% fixed-income can help mitigate volatility while ensuring steady returns. Transitioning to this mix over the next few years will allow them to gradually adjust their investments.Their TFSAs should be fully invested in equities to maximize growth potential. Corporate funds should be structured to produce regular monthly income, enabling quarterly dividends from the company. As GICs mature, transitioning into aggregate bond ETFs can provide consistent interest distributions. Cash reserves should be placed in high-interest savings accounts or money market ETFs to earn interest while deciding on a long-term strategy.

Planning for Retirement and Beyond

Russel and Janice must decide when to claim Canada Pension Plan (CPP) and Old Age Security (OAS) benefits. Consulting a tax accountant alongside a financial planner will ensure accurate assumptions and corporate taxation. Comprehensive projections mapping their lives to age 95 will reveal the assets available to support their children.If life insurance coverage is deemed necessary, a corporately owned policy might be more cost-effective. The financial plan will also strategize the most tax-efficient way to draw money from their corporation and personal assets. By carefully planning their retirement, Russel and Janice can ensure their children's financial security while enjoying their golden years.

Building a Legacy of Financial Independence

Ultimately, Russel and Janice want peace of mind knowing their children will be financially secure. Working with a retirement planner can help them navigate complex financial decisions and optimize their resources. Through meticulous planning and strategic asset management, they can build a legacy that supports their family for generations to come.