The Companion Advisor:
General Interest
Revisit your financial plan when you
inherit
From the Canadian Association of Insurance and
Financial Advisors (CAIFA)
A Companion Advisor article
If you have received money as a result of an
inheritance, you may have mixed feeling about it. On one hand, you have
money that you never expected to receive; a windfall. On the other hand,
you have lost a loved one. This puts a burden on you to act responsibly
with whatever you have inherited.
Any money you get as an inheritance is going to have
some emotional ties for you. You may want to buy something to remember
your benefactor by, perhaps something for your home or a trip you have
always wanted to take. You could set aside 10 to 15 per cent of this inheritance
for spending without compromising your own need to save. When you look
at that painting in the hallway or the pictures of your trip, you will
think of the person who made it possible for you to buy it.
Before deciding what to do with the bulk of your inheritance,
you should seek the advice of financial advisor. This is a good opportunity
to establish or review some financial goals and a qualified financial
advisor can help you set priorities.
Whenever you have a windfall, you should pay down debt
with high interest rates. Paying off credit card debt or a line of credit
is always the first priority, because it comes with high interest rates.
Your advisor can help you decide whether to pay off money owing on your
car or home.
In a complete financial plan, you should have a cushion
- money that is set aside for emergencies. If you have paid off your debts,
your advisor may suggest that you set up this cushion, which is a pool
of money that you will not otherwise touch. If can help your peace of
mind as it will be there in a family emergency or if you lose your job.
Another priority should be retirement savings. If you
have RRSP room, you may want to consider contributing the full amount.
A financial advisor can help determine what type of RRSP investment is
appropriate for you. If you are one of the lucky few who are up to date
with RRSP planning, consult a qualified financial advisor, such as Fiscal
Agents, to help you select an investment that fits in the your overall
plan.
This article is reprinted with the permission of the Canadian Association of Insurance and Financial Advisors (CAIFA), www.caifa.com.
* * *
|
|
Use this link to load a printer-friendly
version of this document. |
Have a question regarding this article? Use our feedback form to send us a note.
 © , Fiscal Agents Money Management Newsletter
25 Lakeshore Road, Oakville, On L6K 1C6.
(905) 844-7700
| 
