Umang B Parekh MBA, CFA -IG Wealth Management

Umang B Parekh MBA, CFA -IG Wealth Management Consultant, Investor Group Securities Inc.

Permanently closed.
09/20/2021

4 Ways of Paying Off Your Mortgage Faster:

Firstly, by reading the topic, you’d wonder why I should pay my mortgage faster when I can put my excess money in RRSP/TFSA and make more as opposed to paying mortgage, Honestly, I have the same opinion but when thinking emotionally, I have come across lot of people who would want to pay off their mortgage as quickly as possible.

So, I will be writing about few strategies, which could dramatically reduce the interest payments you make on your mortgage plus reduce the amortization period you currently have.

For the purpose of illustration, we will take an example of having a mortgage of $500,000 with interest rate 4% with an amortization period of 30 years. You’d wonder why I took 4% instead of the current low interest rates, this is because over time inflation kicks in and you pay an average of 4% over the next 30 years.
As you know, initially your mortgage consists more than 50% of interest payments and less of principal payments so with the mortgage mentioned above, your monthly mortgage comes around $2,377 and the interest you pay in the next 5 years is $94,652 and $48,003 as Principal. You can see that you pay almost double the interest in the initial years of mortgage. So, let’s talk about the

1. By making accelerated weekly payments- This strategy means you making a bit more of weekly payments for example if you are making a weekly payment of $548, by making extra payment of $46 or $594, you could save $56,609 in interest cost over your mortgage term plus you could payoff your mortgage 4 years earlier. A small price to pay to get some significant benefits.

2. Additionally, Monthly Lumpsum Payments-Option one is mostly suitable to all but if you would like to payoff your mortgage quickly, by paying an additional $250 a month in addition to your mortgage payment could save you over $68,000 in interest payments and will cut the time of your mortgage by 5 years.

3. Additional Annual Lumpsum Payments-Many of you would be getting one lumpsum payment annually in the form of bonus, tax refunds etc, so if you choose to put $5,000 towards an annual lumpsum payments, which could save you an interest cost of $95,000 and will cut the time of your mortgage by 7 years.

4. Adjust Amortization Schedule- I often see people not changing the amortization schedule when their mortgage is due for renewal, for eg, if you have taken 30 years mortgage and after 5 years when it comes for renewal, most of you would renew it again for 30 years so that your payment comes down, but we fail to realize that if you keep renewing for the same term, you will never get rid of your mortgage.

So if your goal is to pay off your mortgage quickly, these are the potential strategies you could follow. Please be sure to run the numbers with your mortgage guy which will give you a brief idea on what strategy is most suitable for you.

Happy Learning!

08/09/2021

Losing a loved one is the most challenging time and thinking about money and CPP benefits are the last things on the list. Hopefully, you have someone, who could apply for you for these benefits but most importantly, this information helps you in making you aware about the benefits available to your disposal.

1. Death Benefit- Flat $2,500 to the surviving spouse. If the deceased spouse has made one payment towards CPP, the surviving spouse would receive a onetime benefit of $2,500.

2. Child’s benefit-This is the benefit your child would receive if they were below 18 or in between 18-25 years and are enrolled in a post-secondary education. There is a flat $257 per month to children if they meet any of the two criteria.

3. Survivor Pension- This is an ongoing benefit to the surviving spouse and especially the most important benefit you would be looking for. The benefits are defined based on your age:
a. If your spouse passes away when you are under age 65- You will collect 37.5% of the deceased spouse CPP benefit plus a flat benefit of $199.31. For example, if the deceased spouse was collecting $1000, you will collect $375+$199.31 survivor pension per month throughout your life over and above your own CPP.
b. If your spouse passes away when you are over age 65- You will collect 60% of the deceased spouse CPP benefit. For example, if the deceased spouse was collecting $1000, you will collect $600 survivor pension per month throughout your life over and above your own CPP.

One downside of it is, your CPP and deceased spouse CPP cannot be more than the maximum CPP amount, which is $1,203.75 for 2021. For example, if your deceased spouse was getting $1,000 as CPP, you would receive survivor pension of $600, however if your CPP benefits comes to $800, you will receive only $603.75, which totals up to $1,203.75.

Happy Learning!

08/03/2021

Four RRSP Mistakes you should avoid:

1. Not naming a Beneficiary- It’s so important to name a beneficiary especially if you have a spouse/common-law partner as it can save significant taxes upon your death. In Canada, your RRSP/RRIF can be rollover to your spouse/common-law partner without any tax implications. Taxes are only applied once the second spouse passes away. Therefore, make sure you have a beneficiary listed in your RRSP/RRIF.

2. RRSP Contributions without planning-At any time, you put money into an RRSP, you should focus on long term/ retirement planning unless you have a plan to buy your first home or going back to education. Money you put into RRSP consider it gone until your retirement or years without employment or income. Another important thing to consider is if you pull money out of your RRSP without, your contribution is lost forever unlike TFSA.

3. Over contributing to your RRSP-You have a limit for how much you need to contribute to your RRSP. If you go over that limit, there is a steep penalty, which is 1% per month on over contribution. However, there is a lifetime limit of $2,000 overcontribution on which there will be no penalty.

4. Blowing your Tax Refund- I often see people getting a refund from RRSP contribution, which is not used at its full potential. If you are getting a tax refund, make sure you contribute back to your RRSP or taking an advantage of your TFSA to compound your net worth. Another strategy is to payoff any high interest debt with your tax refund to simplify your financial life.

Happy Learning!

People often have a misconception of what a financial plan looks like. The graphical illustration aptly sums up the ingr...
07/26/2021

People often have a misconception of what a financial plan looks like. The graphical illustration aptly sums up the ingredients of what we call a robust financial plan.

With IG Living Plan, a planning software, which provides strategies so that you save on taxes now and in the future, clients often appreciate the true value of advice we provide.

Contact me if you wish to have a comprehensive plan of your own.

It was an absolute honor to be one of the sponsors and of course a player of one of the biggest cricket tournaments held...
07/26/2021

It was an absolute honor to be one of the sponsors and of course a player of one of the biggest cricket tournaments held in Calgary. 8 teams and over 500 spectators were involved in making this event a huge success.

06/21/2021

I and Vishal presented a webinar on how to finance your retirement. With 22 attendees and many questions asked. It was an exciting webinar, having talked about various strategies and accounts to finance your retirement. Multiple questions were asked but to be respectful of time, we went through only couple of them. However as promised, we will be following up on the unanswered questions in a more personalized manner with you all next week. Thank you again for making this webinar worth remembering.

The webinar really all comes down to answering these two important questions people often have: How much m...
06/10/2021

The webinar really all comes down to answering these two important questions people often have:

How much money do I need in retirement?
Am I going to be financially ok in retirement?

Please join us on Thursday, June 17th at 7:00PM (MDT) for a FREE Financing Your Retirement webinar presentation from the comfort of your own home.

Please free feel to share this link with your family & friends who may benefit out of this webinar. You can Click here to register: shorturl.at/fpBDY

Regards,
Umang

Is retirement keeping you up at night?Every year you prepare to please the CRA, but have you prepared to please yourself...
06/09/2021

Is retirement keeping you up at night?

Every year you prepare to please the CRA, but have you prepared to please yourself during retirement?

Have you ever thought how much income do you need in retirement? And how long?

When was the last time you checked your financial pulse? Do you have a plan in place?

Remember, we don't plan to fail, we just fail to plan.

If any of these questions are important to you, join us for a free hour long webinar from the comfort of your own bed on 17th June 2021 at 7 PM MST. And start planning. Register here:http://shorturl.at/fpBDY

What’s your retirement number? 50%, 75% or 100% of your pre-retirement income? Confused? Please join us as we provide in...
06/08/2021

What’s your retirement number? 50%, 75% or 100% of your pre-retirement income? Confused? Please join us as we provide insights on how one plan in order to have a secured retirement income along with tax efficient strategies now and in retirement.

Please join us on Thursday, June 17th at 7:00PM (MDT) for a FREE Financing Your Retirement webinar presentation from the comfort of your own home.

Please free feel to share this link with your family & friends who may benefit out of this webinar. You can Click here to register: shorturl.at/fpBDY

Address

5113-333 96 Avenue NE
Calgary, AB
ABT3K0S3

Telephone

+14036143539

Website

Alerts

Be the first to know and let us send you an email when Umang B Parekh MBA, CFA -IG Wealth Management posts news and promotions. Your email address will not be used for any other purpose, and you can unsubscribe at any time.

Shortcuts

Featured

Share

Category