Watson Investments is proud to celebrate our Managing Partner, Jennifer Watson, recipient of the Cogeco Business Leader Award presented by the Oakville Chamber of Commerce.

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Case Study

Retired widower revising his financial plan

Their situation

Age: 80 year old

Overview: A retired widower, with two adult children and three grandchildren. Considering relocating to be closer to family.

Net Worth

$3.5 million

Assets

Home: valued at $2 million Other: $1.5 million

Liabilities

No debt

Their Goals

  • Ensure estate plan is updated with clear and efficient asset distribution, according to their wishes.
  • Revisit the financial plan with updated cashflow plan and budget.
  • Determine how much they can afford to gift to their children.

Watson's Solutions

1
Revisited Will and Power of Attorney (POA)
  • Updated the will to reflect changes in beneficiaries and the executor.
  • Ensured life insurance payouts and retirement funds aligned with current wishes.
  • Reviewed and updated beneficiary designations on RRIFs, TFSAs, and life insurance policies to match the will.
2
Redid Financial Plan with New Situation
  • Reassessed financial goals, considering options such as downsizing or moving into a retirement home.
  • Updated the retirement plan to reflect a single income, inflation, market risks, and changes in pension or investment income.
  • Assessed income sources (e.g., pensions, RRIFs withdrawals, life insurance) to cover expenses and maintain living standards.
  • Adjusted withdrawal strategies to minimize taxes.
  • Revised personalized budget to include new expenses, like healthcare, and planned for increased cash flow needs later in life, with the goal of staying in the home with assistance if necessary.
3
Reviewed Early Gifting Strategies for Children
  • Assessed pre-inheritance gifting strategies to efficiently transfer wealth before the inheritance stage, maximizing tax efficiency and the value passed to heirs.

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FAQ

Cash Flow

Will my cash flow be disrupted?

An Education Savings Plan in Canada supports your child’s student education plan with tax benefits and CESG grants. A Registered Education Savings Plan (RESP) offers tax-sheltered growth with a $50,000 maximum RESP contribution limit, while a TFSA provides additional savings for education in Ontario and beyond, reducing financial stress when tuition payments begin.

Combine RESP savings, TFSA contributions, and family gifting options to maximize grants and grow funds tax-efficiently.

It’s best to start as early as possible to take advantage of compounding returns, RESP grants, and long-term growth.

A solid education plan includes RESP contributions, CESG maximization, gifting options, and effective budgeting to meet education costs.

Tax Efficiency

How can I effectively save and gift for my children's weddings while minimizing tax impact?

An Education Savings Plan in Canada supports your child’s student education plan with tax benefits and CESG grants. A Registered Education Savings Plan (RESP) offers tax-sheltered growth with a $50,000 maximum RESP contribution limit, while a TFSA provides additional savings for education in Ontario and beyond, reducing financial stress when tuition payments begin.

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