Are you in the habit of a mid-year financial check-in? I’d recommend it. Here’s what you should pay attention to for the rest of 2020.


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Review your will

I’m not trying to be morbid, but the pandemic has caused Canadians to think about what happens when they, or their partner, passes away.

You need a will if you have children, any material assets — like a home, investments or a business — or a substantial amount of debt. Establishing a will forces you to think about your wishes after you die, such as how your assets are to be distributed, to whom and, for parents, it identifies a legal guardian for any minor children. Without a will, you die “intestate,” which means the court decides these things for you.

Updates to your will need to be made if your wishes have changed and/or if you’ve experienced a major life event; birth, marriage, separation or divorce, inheritance, illness, business ownership and the like.

Review your life, disability and critical illness insurance

Chances are you have (or have recently had) life, disability and critical illness insurance through work, or independently through your bank or one of the major Canadian insurers. But, in my experience, oftentimes coverage is insufficient or dependent on still being employed (insert the pandemic unemployment rate and tens of thousands of people are now without any coverage).

I can’t stress enough that insurance matters; especially if you have a spouse, kids or financial obligations within a business. Not having proper coverage could be financially catastrophic for those who depend on you if you pass away or become disabled or ill.

As a part of your mid-year review, book a virtual meeting with your insurance specialist. If you don’t have one, contact one of the major insurers in Canada or get a referral from a friend. Your goal is to understand what coverage you do have and if you have gaps in coverage.

PS: Coronavirus is a new condition and it’s important that you check with your provider to determine if the virus is covered.

PPS: Insurance companies have modified their application process, too. There are certain exclusions they are now making because of the virus.

Review your beneficiaries and power of attorney

For investments, your will and insurance policies, double confirm whom you have selected to benefit from your wealth and insurance coverage, and who will be in control of your finances if you happen to still be alive but unable to make decisions.

Review investment performance and fees

This might be one of the strangest years in our market’s history, which makes monitoring your investments even more important. Extremely long-term historical North American returns have ranged between seven and 11 per cent (after fees), so how do your long-range returns (eight to 10 plus years) measure up? And what steps are being taken in the short term to protect you, and/or to help you capitalize on the yo-yo’ing market?

Next, take a look at your fees. Common fees are management and trading fees, but there can be others. Anything under one per cent is very inexpensive. And if your fees creep over 2.25 per cent, your fees are on the higher end of the spectrum.

Now put the two pieces together. The sweet spot is when you achieve above average performance with below average fees. If you’re below average in performance and paying higher fees, you need to make changes to your portfolio and how it’s being managed.

A really good financial planner will meet with you twice per year to go through these details, tweak your asset allocation, suggest changes and update your long-range plan. If you’re doing self-directed planning, you’ll need to make these updates yourself twice per year.

Plan out your giving and retirement top-ups

Certainly this is not available to everyone at the moment, but if you’re working and want to be strategic with your giving and retirement savings, figure out what portion of the remaining year’s income you’d like to put toward charity, your TFSAs and RRSPs. All of these strategies save money on taxes.

Plan out your health and flexible spending accounts

If you have access to these accounts through your work or benefit company, inventory what you’ve spent to date and how much you have left. Do your best to schedule in your remaining needs, like ordering contact lenses, before the end of the year.

As always, maintaining your monthly household budget is key to your financial health. But it wouldn’t hurt to do a deep dive as part of your mid-year review to see if there are further improvements you could make.

Eric Lidemark, CLU, CFP, CHS profile photo
Eric Lidemark, CLU, CFP, CHS
Certified Financial Planner
Lidemark Financial Group Inc.