When you come to Planswell, you answer several questions and then see your plan. What you don’t see are the millions of calculations we make in the background to optimize your investments, insurance and mortgages for your goals.
These calculations are based on two types of variables:
Until recently, financial planners would take a mix of facts and estimates and build a plan for the rest of your life. The problem with this approach is that the facts will change and at least some of the estimates will turn out to be wrong. The difference with Planswell is that we enable you to quickly update your plan whenever you want. We recommend twice a year. These small but regular adjustments greatly improve the chance of reaching your goals.
No adjustments
Regular adjustments
This document will give you insight into the facts and estimates that we use to create your financial plan. If you have any questions – or even ideas to make your financial plan better – we would love to hear from you.
Every plan is unique but there are certain basic assumptions that apply to just about everyone. Here the major ones.
Your investor profile sets your overall limits for risk and return and any investor should complete a full investor KYC before proceeding with any investment. In addition, your plan is designed to minimize your overall tax bill. One of the ways we can do that is by determining the best timing and amount when you invest in a Registered Retirement Savings Plan (RRSP), Tax-Free Savings Plan (TFSA), or taxable (non-registered) account. We make these determinations based on your current tax rate and estimated future tax rate.
Whether you’re investing for school or retirement, the main principles remain the same, invest in an appropriate portfolio, suitable to your risk tolerance.
The role of insurance is to replace the income that would be lost if you or someone in your family were no longer able to work. The goal is to make sure that, even if there is a negative health event, you and your family will not suffer a lower standard of living now or in retirement. If you are over age 60, we will not automatically recommend insurance as part of your plan, but will discuss your needs with you on an individual basis.
Your plan may include three types of insurance:
Term Life Insurance pays a tax-free lump sum if the insured person passes away. We design your plan with the expectation that this amount will be invested according to the risk tolerance of the surviving spouse in order to produce ongoing income.
Critical Illness Insurance pays a tax-free lump sum if you are diagnosed with one of several common illnesses including cancer and heart disease. This amount is designed to cover lost income as well as a variety of medical expenses that are not covered by public health plans.
Disability Insurance pays a monthly tax-free benefit if you become temporarily or permanently disabled and cannot work at your current occupation. Studies show that an accident or illness will cause about one person in three to be disabled for 90 days or more in their lifetime.
At Planswell, our goal is to prevent you from paying unnecessary interest costs. That’s why we’ll recommend ways to minimize your debt costs while you invest, or even before you can start investing.
Here are the three main debt solutions that may be included in your plan:
Refinance your debt. If you have credit cards, loans, lines of credit, or other debts and also have home equity of 20% or more, we may advise you to pay off your debts with a new home mortgage in order to free up cash flow for investing and insurance.
Pay down your debt and invest at the same time. If you have debt with an interest rate lower than your expected investment returns, we may advise you to work on paying it off while also adding to your investments.
Pay down your debt before investing. If you have high-interest debts that cannot be refinanced, we will advise you to work on paying them off, starting with the highest interest rate first. Once this is done, we’ll get your investments started.
The world’s best financial plan is the one that actually gets you to your goals. That’s why we’ll ask you to log in to your Planswell dashboard every six months and spend a few minutes updating your plan. This will help make sure that your plan reflects the most up-to-date facts and estimates, and that you have the best possible picture of where you’re heading financially.
This document is regularly revised in response to many factors – from changing market conditions to tax law updates and the real-life situations of clients like you. Please note, the assumptions on your plan might change after your plan is tailored by an expert to better suit your needs. If you have any questions or would like to suggest ways to improve your plan, please let us know. hello@planswell.com
