When talking to prospective patients or engaged in consultations you probably spend a lot of time clarifying what you do. People see NDs because they’ve heard good things about the profession, or have a friend who had good results.
Regardless of the positive feedback, there’s still some confusion about what role an ND can play in a patient’s overall health. When it comes to your own financial health and well-being, there may be some confusion too. You didn’t study all those years to become a financial whiz, but like many health issues, it’s important to set a goal and develop a plan for a healthy financial future. If you’re a little confused about retirement planning, you’re not alone.
Traditionally, we are most familiar with the Registered Plan (RRSP), Defined Contribution Plan, Defined Benefit Pension Plan, and Group Retirement Savings Plan. The most recent addition to deferred income plans is the Pooled Registered Pension Plan (PRPP). BC’s PRPP is voluntary and optional. It was implemented to reduce the administrative burden, transfer the fiduciary duty and responsibility from the employer and provide tax and cost savings for employers and self-employed individuals.
When offering a PRPP funds are contributed directly to the pension plan, thereby providing a key cost saving advantage over other plans. There are no payroll taxes, i.e., CPP, EI, and WCB. This plan suits small businesses offering a workplace savings plan.
Incorporated self-employed business owners also have the option for an Individual Pension Plan (IPP). An IPP has features with significant benefits upon retirement. It works like a defined benefit pension. The company pays 100 per cent of the contribution, and the pension plan is funded to provide a defined benefit. The contribution is a tax deductible expense. Administration and management fees are also tax deductible. One strategic advantage for a profitable company is upon retirement of the shareholders: The pension plan may be topped up from the proceeds of the sale of a clinic or practice and the contribution to the plan is tax deductible, thereby reducing the tax payable on sale of the business.
BC is the only province which does not require the company to meet an annual minimum deposit in funding the plan. This type of arrangement is suitable for practitioners over the age of 45, T4 income of $75,000 or greater, with past service or RRSP contribution room.
A June 2014 Conference Board survey found that while many Canadians are saving for retirement, the majority are concerned that they haven’t saved enough. Sixty per cent of respondents felt they haven’t saved enough to comfortably retire. Women and those with lower levels of household income were even less likely to have put money aside. However, there’s some good news in the survey.
A larger number of younger Canadians are beginning to prepare for their financial situation after they stop working. About 34 per cent indicated that planning for retirement is a priority for them, while 24 per cent said that they have made a plan for their eventual retirement. Based on these results, how would you rate your retirement planning confidence on a scale of one to five, if one was the lowest? Are you like some people who find the whole topic very confusing?
What would it take to overcome your fear and finally start investing in your future? Similar to starting a treatment plan, a diet or quitting smoking, it usually takes a shock to your system to make critical behavioural changes. For example, maybe your parents or grandparents had to keep working past their ideal retirement age because they didn’t save enough or suffered investment losses. They’re likely scared and feeling desperate. “That’s not going to be me,” you tell yourself even though you’re afraid it just might be.
Put your money where your emotion is. Before hitting your financial rock-bottom, why not decide to put your money where your emotion is? You can set up a plain and simple saving plan that is so automatic, you won’t even notice you’re saving. One easy option to consider is to contribute to your BCNA retirement savings plan.
Part of the pay-yourself-first concept: Your contributions are made automatically through pre authorized debit plans, so it’s virtually painless. If you don’t have it, you won’t spend it.
Tax savings: Your contributions are tax deductible. This means you’re lowering your taxable income and your contributions can grow, tax-deferred. Employer contributions: Depending on the features of your plan, you may also contribute for your employees. This could provide an incentive for key employees to stay.
Choice of investment options: You may have access to a variety of investment options that have been carefully selected by experts.
Lower investment/No transaction fees: Take advantage of group buying power, lower investment management fees and no front-end, back-end or deferred sales charges.
Speak to an investment advisor: Finding the right fit for your retirement
plan will depend on your company structure, tax deductibility,
marginal tax rate, family assets and net worth.
Home buyer/life-long-learning possibility: You may be able to use
some of your savings, as a first time home buyer, to purchase a
house or return to school.
Portability: You have the option of transferring your plan to another
investment vehicle or savings plan.
Meet your fears head-on: There’s so much information about retirement
saving, that it’s easy to feel overwhelmed and to avoid it. Instead, try to meet your fears head-on. Make regular retirement saving your goal and you’ll end up changing your financial future for the better.
Posted in BCNA Bulletin Articles