When starting a family, one of the most challenging aspects is financial planning. Regardless of how sound a financial plan is, adding a new family member can complicate the entire process. With the current housing market, interest rates, and other factors, it is crucial for new parents to get in touch with their financial advisor to help plan for the best possible scenario.
RESPs
The Registered Education Savings Plan is one of the best accounts clients can set up for their children. Parents can open an RESP account for their kids as soon as the child is issued a social insurance number. The funds in the RESP can be used for all expenses related to post-secondary education such as tuition, books, rent, etc. The Canadian Government will also match RESP contributions by 20% up to a maximum of $2,500 every year.
Childcare Deductions
Deductions are another helpful tool clients can use to cut costs related to family expenses. For children below the age of six, the parent with the lower income can deduct $8,000 per year per child. From ages seven to fifteen, this amount drops to $5,000.
Life Insurance
Establishing a solid life insurance policy is a great way for clients to protect their spouses/children against any unforeseen circumstances that may develop later in life. There are many different types of life insurance, and a financial advisor can help clients choose the best policy for their families.
Wills
While the topic of preparing a will is not a pleasant conversation to have, it is an extremely important aspect of financial planning. Roughly 60% of Canadian adults do not have a will set up. Constructing a will can help alleviate a lot of the financial and legal stress involved in estate planning, and it is a great way to ensure the client’s family is secure should anything happen to the client.
For more information on financial planning for new families, follow the link below:
https://www.theglobeandmail.com/investing/globe-advisor/advisor-news/article-what-to-expect-financially-when-youre-expecting/