Important aspects to consider in organizing your financial picture.
When you think about your finances, there are likely a number of factors that make up the overall picture. And, over time, these pieces may change as your life evolves. Whether you’re a recent grad or early in your career, an individual with a busy family household or a longtime professional or business owner, periodic financial check-ins can offer a range of benefits.
Here are six financial to-dos that can help put you on the right track to achieving your goals.
Doing a financial review is a simple way to get a clear overview of your broad financial picture and where you stand today. If this type of personalized review isn’t something you’ve pursued before with a qualified advisor, think of it as a shell for your planning—it captures your family tree, financial goals, net worth and cash flow needs, as well as estate, insurance, retirement and other important information.
Once gathered, these details may help guide discussions on what strategies or types of planning may make sense for you and can point you in the right direction. The information can also be updated regularly so you can see how you’re progressing from year to year or as your situation changes.
For many Canadians, looking ahead to retirement is a main financial focus. In fact, one of the most common questions is, “Will I have enough to retire comfortably?” Or among business owners, “How will I create retirement income, and will it be enough?”
Whether your retirement is approaching or it’s decades down the road, a retirement projection can provide a holistic view of your situation, showing possible financial steps you can take or adjustments you can make to your plans based on what you envision for retirement. It can also identify and report on your goals and illustrate how adjusting certain assumptions may impact your retirement plans.
Using information from a financial review or retirement projection, you may want to consider a financial plan. “A financial plan addresses all aspects of your financial life, including tax and investment planning, risk management, and retirement and estate planning,” says Howard Kabot, vice president of financial planning with the Family Office Services team at RBC Wealth Management Canada. “Think of it like a blueprint for your financial life.”
A personalized plan “will identify strategies to help you reach your goals within defined time horizons,” says Kabot, and it’s something you can shift and adjust as you experience changes in life or as your goals change.
Let’s talk about your financial future and build a plan to help you achieve your goals.
Depending on your circumstances, certain income splitting opportunities may help lower your family’s overall tax bill. If you expect your spouse to have a significantly lower retirement income than you, consider directing some or all of your allowable RRSP contribution to a spousal RRSP. You can still claim the tax deduction yourself, reducing your taxes now. Your spouse will receive income from the spousal RRSP when it’s withdrawn, which may help even out your retirement incomes and put you both in a similar tax bracket, potentially reducing your taxes during retirement.
Although you can allocate a maximum of 50 percent of eligible pension income (which includes RRIF income) to your spouse, it may still make sense to contribute to a spousal RRSP if:
Part of managing your finances is maximizing opportunities on both sides of your balance sheet. “High-net-worth clients understand the benefits of using credit,” says Andrej Titan, vice president of credit for RBC Private Banking. “Many will use the full amount of credit available to them to reinvest and diversify their assets, from marketable securities to direct purchases of operating companies.”
If you have different sources of debt, consider consolidating them, as this may allow you to access a lower interest rate. If you already have a competitive rate on your debt, is the interest on the debt tax-deductible? If not, speak with a qualified advisor to see if there’s a way you can restructure your loan and your assets to reduce your interest costs, or make the interest on the loan tax-deductible to save you taxes.
As an adult, regardless of your age, it’s crucial to have a valid Will in place. And once you have one, it’s equally as important to keep it properly updated. A Will functions as the guiding legal document in the administration of your estate and as a way to ensure your property is distributed according to your wishes after your death. If you were to pass away without a Will, you would lose the element of choice with your wishes and intentions, as your estate would be administered in accordance with the provincial or territorial legislation where you lived at death. And if you do have a Will but it’s outdated, it may lead to unintended consequences if your choices or circumstances have changed from what had originally been documented.
In general, it’s a good idea to review your Will every three to five years or any time a significant life event takes place. Some of the key triggers for a review include:
Alongside the importance of maintaining an up-to-date Will is having and doing the same with a Power of Attorney (Mandate in Quebec), for both your financial affairs and health care. If something unexpected happened to you and created a situation of incapacity where you were unable to make decisions independently, these documents would be crucial to ensure you were protected and your wishes were carried out in managing your affairs.
If being charitable is something that’s important to you, give some thought to how, how much and when you give, as well as what types of gifts you make. Many people focus on giving closer to the end of the calendar year, often in line with the holiday season and the deadline for donations to receive a tax credit. For tax purposes, as an individual, you’re entitled to a donation tax credit if you make a donation to a qualified donee, such as a registered charity, and the donation tax credit can reduce your taxes.
As an alternative to an outright gift or direct cash donation, there are many options for charitable giving, including donating publicly listed securities, making a charitable bequest in your Will, setting up a charitable remainder trust or establishing a donor-advised fund or private foundation.
By exploring different avenues for giving and aligning them with your personal or family goals, structuring your giving may help expand your charitable impact over time for the causes and organizations you care about. It can also be carried out in a way that fits with other tax, financial or estate planning strategies to meet your overall objectives.
No matter what age you are, at the root of financial planning is thinking about and identifying your short- and long-term goals. From there, it’s about mapping out concrete plans to track toward those goals.
“There are many factors to consider when creating a financial plan, and these become more complex as you build wealth and set new ambitions for your legacy,” says Kim Mason, executive vice president and head, RBC Private Banking. “At RBC, we take a holistic approach and put the bank’s vast expertise to work for you, to ensure your plan uncovers opportunities to help you protect and grow your wealth.”
This article was updated in Jan. 2025.
This document has been prepared for use by the RBC Wealth Management member companies, RBC Dominion Securities Inc. (RBC DS)*, RBC Phillips, Hager & North Investment Counsel Inc. (RBC PH&N IC), RBC Global Asset Management Inc. (RBC GAM), Royal Trust Corporation of Canada and The Royal Trust Company (collectively, the “Companies”) and their affiliates, RBC Direct Investing Inc. (RBC DI) *, RBC Wealth Management Financial Services Inc. (RBC WMFS) and Royal Mutual Funds Inc. (RMFI). *Member-Canadian Investor Protection Fund. Each of the Companies, their affiliates and the Royal Bank of Canada are separate corporate entities which are affiliated. “RBC advisor” refers to Private Bankers who are employees of Royal Bank of Canada and mutual fund representatives of RMFI, Investment Counsellors who are employees of RBC PH&N IC, Senior Trust Advisors and Trust Officers who are employees of The Royal Trust Company or Royal Trust Corporation of Canada, or Investment Advisors who are employees of RBC DS. In Quebec, financial planning services are provided by RMFI or RBC WMFS and each is licensed as a financial services firm in that province. In the rest of Canada, financial planning services are available through RMFI or RBC DS. Estate and trust services are provided by Royal Trust Corporation of Canada and The Royal Trust Company. If specific products or services are not offered by one of the Companies or RMFI, clients may request a referral to another RBC partner. Insurance products are offered through RBC Wealth Management Financial Services Inc., a subsidiary of RBC Dominion Securities Inc. When providing life insurance products in all provinces except Quebec, Investment Advisors are acting as Insurance Representatives of RBC Wealth Management Financial Services Inc. In Quebec, Investment Advisors are acting as Financial Security Advisors of RBC Wealth Management Financial Services Inc. RBC Wealth Management Financial Services Inc. is licensed as a financial services firm in the province of Quebec. The strategies, advice and technical content in this publication are provided for the general guidance and benefit of our clients, based on information believed to be accurate and complete, but we cannot guarantee its accuracy or completeness. This publication is not intended as nor does it constitute tax or legal advice. Readers should consult a qualified legal, tax or other professional advisor when planning to implement a strategy. This will ensure that their individual circumstances have been considered properly and that action is taken on the latest available information. Interest rates, market conditions, tax rules, and other investment factors are subject to change. This information is not investment advice and should only be used in conjunction with a discussion with your RBC advisor. None of the Companies, RMFI, RBC WMFS, RBC DI, Royal Bank of Canada or any of its affiliates or any other person accepts any liability whatsoever for any direct or consequential loss arising from any use of this report or the information contained herein.
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