Charitable Giving Takes on a New Look

Charitable gifting is about to change. As you may know, currently you can donate cash and receive preferential tax treatment.

Superhero or Superhuman?

Unfortunately, unlike many of our childhood heroes, we aren’t invincible… we can’t all be Superman or Batman, yet we still pretend like we are. The thought of an injury is the last thing that’s on our mind; yet we still have no problem helping a friend move, playing sports on the weekend, or doing chores around the house from the never ending “Honey Do- List”.

But what if we were to become injured off the job? What if we could no longer pay our mortgage, bills, and overhead? Being disabled inhibits our ability to work, which in turn inhibits our ability to afford our lifestyles.  We have no issue insuring our house, and our car; yet we don’t always see the importance of insuring our biggest asset… which is OURSELVES. Disability Insurance allows you to protect YOUR income in the event YOU become disabled.


This is a question we come across a lot, and often times the client is right. They are covered through their work plan.  However, the problem with work plans are: They typically don’t pay nearly as much as your current income, the definition of “Disability” is somewhat of a grey area, and the length of time you are actually covered for is far less than the actual need. Work plans can sometimes be confusing to understand what you’re covered for, so we assist you in putting a policy in place that compliments your work plan, and gets you the coverage you need.

The risk of Disability is far more common than you think –

Disability in Canada:

About 4.4 million – or one in seven Canadians – have a disability. That number is expected to grow to ONE in FIVE in the next generation.  (Participation and Activity Limitation Survey, 2006)

Disability types measured by Statistics Canada: In Statistics Canada’s 2012 Canadian Survey on Disability, the top 10 disability types captured are seeing, hearing, mobility, flexibility, dexterity, pain, learning, developmental, mental/psychological, and memory.

Often time’s people will associate an injury with being disabled; yet as mentioned above, there are many types of Disability that can occur over our lifespan.


Unfortunately, when applying for Disability, past injuries may be excluded from your policy. This is why it’s important to put a plan in place that suits your needs, and covers you from any unforeseeable injuries before they happen. This will give you peace of mind when doing all those enjoyable “Honey Do-Lists.”

Mortgage or RRSP?

This is the question I have been asked the most in my financial career: Should I pay down my mortgage or put money into my RRSP?

The answer I give is: It depends! I know it’s probably not the answer you were looking for, so let me provide some rules of thumb and opinion on how to walk this through.

Rules of Thumb:

  1. If your mortgage interest rate is expected to be higher than your RRSP rate of return – pay off your mortgage.
  2. Likewise, if your RRSP expected rate of return is higher than your mortgage interest rate – put it into your RRSP.

Hybrid Option:
The option I like, and the one my wife and I used, was putting money into the RRSP and then using the tax refund to pay down the mortgage. This allowed us to benefit from both worlds, including some retirement and some debt reduction.

The role of emotions:
Sometimes when there are two good options (increase savings or pay down debt), the numbers at a certain point become less relevant. Sometimes going with the option that makes you feel less stressed is the best option even if the numbers point to the second option. After all, both options are moving you in the right direction.

It’s a Win-Win. Regardless of which option you choose, both choices move you down the right road of financial stability.

  • So, if debt stresses you out – pay down your debt. No sense in losing sleep over money.
  • If you aren’t what we call a “disciplined saver,” consider setting up an automatic withdrawal for your RRSP contributions. When the tax refund arrives put it on the mortgage. Automation of good habits can help simplify good financial choices.
  • Having a regular review with a financial professional can help ensure you are doing the right steps to help you move forward.

Empire Life has a simple to use Mortgage vs. RRSP Calculator that allows you to enter your current mortgage and financial information and see what makes sense for you.

Give us a call if you would like to explore your unique situation to figure out what makes the most sense for you!