WINTER 2018 UPDATE ADVISORS CORNER. The Team at Century Group INTRODUCING WELCOMING

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1 Suite Riverbend Drive Kitchener, ON N2K 3S2 Tel: (519) Toll-free: (866) 950-LIFE(5433) ADVISORS CORNER Happy New Year from the advisors and staff of Century Group! With a new year come new investment opportunities for both Registered Retirement Savings Plans and Tax Free Savings Accounts. The annual RRSP contribution limit for 2018 is 18% of your 2017 earned income to a maximum of $26,230, plus any unused contribution room carried forward from previous years. The cumulative contribution limit to your TFSAs, since it was launched in 2009, is $57,500 for this year, minus contributions made in earlier years. The chart below shows the breakdown. Keep in mind that as of January 1, 2018, any withdrawals you made from your TFSA in 2017 can be added back in. This is on top of your $5,500 annual contribution for An over-contribution penalty of 1% per month will apply for any excess in your account. Please contact your advisor if you have any questions related to your specific accounts. We wish you all the best in 2018 and look forward to seeing you soon. The Team at Century Group INTRODUCING Michelle Turnbull Advisor Assistant WELCOMING Cathy Christoff, Licensed Admin Assistant, is thrilled to welcome her third grandchild. Nael William Chaib was born on September 11, YEAR ANNUAL LIMIT CUMULATIVE LIMIT 2009 $5,000 $5, $5,000 $10, $5,000 $15, $5,000 $20, $5,500 $25, $5,500 $31, $10,000 $41, $5,500 $46, $5,500 $52, $5,500 $57,500 IN THIS ISSUE: What is home-country investment bias? Who pays for home healthcare? 5 smart ways to save for your child s education Recipe hub Will the enhanced CPP be enough to live on? Since 2009, TFSA contribution room accumulates every year, if at any time in the calendar year, you re 18 years of age or older and a resident of Canada. The advisors at Century Group Financial Solutions Inc. are contracted with Sun Life Financial Distributors (Canada) Inc., a member of the Sun Life Financial group of companies. Sun Life Assurance Company of Canada is a member of the Sun Life Financial group of companies. Sun Life Assurance Company of Canada, 2018.

2 PAGE 2 What is home-country investment bias? Canada represents less than 3% of the global economy. So why do we insist on investing so much of our savings inside our home and native land? Home country investment bias is easy to understand, in part because so many of us relate to it personally. It is the tendency among investors to overweight their investment portfolios in domestic securities: stocks and bonds issued by companies and governments close to home, and mutual funds containing those stocks and bonds. Investors experience a false sense of security from this decision. Their optimism about their home country may be well-founded over any given timeframe, but in the long term, modern portfolio theory calls for a balanced mix of investments. Diversification across geographic regions and across asset classes is one of the foundations of sound financial planning. It might feel less risky to invest the bulk of your savings in companies you know and see close to home. But in fact, an overemphasis on one country is the financial equivalent of having all your eggs in one basket. This is particularly true in Canada Our economy is heavily based on commodities like oil and other natural resources. Our stock markets including Canada s main index, the S&P/TSX Composite reflect this. Investments in these companies have done well because commodity prices have risen as a result of significant economic growth in developing economies like India and China. Those countries are growing huge middle classes, and their consumers all want the same comforts of middle-class life that Canadians enjoy. So raw materials like copper and lumber have grown increasingly expensive. This has led some investors to view Canadian companies in these industries as a way to invest (indirectly) in continued emerging market economic development. These Canadian stocks, oddly, became a way to gain emerging market exposure. But as everyone knows, the global recovery has been hit hard by political and economic developments globally. So expectations for continued growth in the emerging economies have plummeted. That s driven commodity prices down, and taken the Canadian stock market along with it. It s been a painful lesson for investors overexposed to Canada. The fact that some of them made those investments believing they were gaining a degree of international exposure adds a bit of irony to the situation. But in the final analysis, it s still not much more than a simple illustration of what can happen when you fail to diversify.

3 PAGE 3 Who pays for home healthcare? Cash-strapped governments are shifting healthcare delivery into the home. But if you need more than the government provides, how will you pay for it? Picture this: Your elderly mother s arthritis has worsened to the point where she can t get in and out of the bath without help, she s becoming increasingly confused, but she s not ready to go into a nursing home. Or this: You ve had successful cancer surgery and have been sent home, but you still need some hands-on care to complete your recovery. What s the solution? In both instances, it s home care. Nursing and personal care have long been done in the home, by family members, visiting nurses or paid attendants (if finances permit). But there is a much greater emphasis on home care today, as governments redirect limited resources from higher-cost institutional care to lower-cost home care, and as more (and older) people survive serious illness and surgery to the point that they can go home. The healthcare system still looks to families to provide front-line care. But if your spouse, siblings or adult children are unable or unwilling due to distance, job commitments, their own health issues or the complexity of care required you need to turn to external providers. Government agencies pay for a certain amount of care, but the system can be difficult to navigate. Chances are you will be able to get enough post-op care for yourself, but the amount of care by a personal support worker available for your mother, as a senior with a chronic illness, may be far from adequate. You can buy additional care, sometimes even from the same agencies that are providing your government-paid care. But home care isn t cheap: Private home-care service can cost from $20 to $90 per hour for personal or nursing care, according to the Canadian Life and Health Insurance Association. You may have money put aside for just such a possibility, or you may have long-term care or critical illness insurance. But you may not. The 2013 Sun Life Canadian Health Index found that 20% of Canadians have neither health insurance nor money saved to cover future healthcare expenses. When faced with high healthcare bills and no money specifically put aside to cover them, many have been forced to drain their retirement savings, run up their credit cards or even mortgage their homes. One way to avoid this scenario when you reach your mother s age is to get insurance protection while you re still healthy. Long-term care insurance helps pay for care at home or in a nursing home when you need any of: Constant supervision by another person because your mental abilities have deteriorated Substantial physical assistance with at least two activities of daily living (from a standard list of six that includes feeding yourself and dressing yourself) Stand-by assistance for bathing and transferring (such as moving from a chair or out of bed) Critical illness insurance pays you a lump sum to use at your discretion if you are diagnosed with one of the serious health issues your policy covers (such as cancer, heart attack or stroke) and you survive the required waiting period. For example, you could use the money to cover any additional care you need after your cancer surgery, or to help replace lost wages if your spouse takes time off to be with you. If you don t have a plan to cover potential healthcare expenses, it s a good idea to talk to your financial advisor about whether long-term care or critical illness insurance is right for you now, before you need it.

4 PAGE 4 5 smart ways to save for your child s education Sarah Deveau, author of Money Smart Mom: Financially Fit Parenting, provides smart ideas for putting money aside for your child s education. When you re a new parent, you re concerned about doing the right thing. You ve got this infant child with so much potential, and hearing that you may not be able to afford his education makes it very hard, says Mike Maloney, a Saint John, N.B.-based father who started saving for his son s education when little Simon was only a few months old. But how do you find the money to save for something that seems so far away when more pressing items like kitchen renovations, family trips and your own retirement savings compete for attention? Sarah Deveau, mother of three and author of Money Smart Mom: Financially Fit Parenting and Sink or Swim: Get Your Degree Without Drowning in Debt, provides the following smart ideas for putting money aside for your child s education: 1. Set up an RESP An RESP (Registered Education Savings Plan) is the easiest way to save and grow your child s education fund, says Deveau. What many parents don t understand is that when you create an RESP with a bank or a financial advisor it can be flexible, she says. If you can t commit to investing $20 or $50 every month, wait until you get a cash gift from Grandma, or a raise or bonus at work and make a lump-sum payment. Estimate how much you need to save with this RESP calculator. 2. Make your contributions automatic Ask your financial institution to set up automatic, regular contributions from your savings account to your RESP. Some parents contribute their monthly Canada Child Benefit into RESPs, says Deveau, which is often directdeposited into their bank accounts anyway. This is how John Elliot, a father of two in Kitchener, Ont., contributes to his kids RESPs. We set it up so that our contribution comes out a day or two after we receive the benefit so we really don t have to think about it. 3. Look for cash in the toy box If you tend to throw away or donate old toys and outgrown clothes, take a closer look at them and see if there are any you might be able to sell at a consignment store or yard sale. It not only cleans up the toy room, but may provide you with some extra cash to invest. 4. Trim creatively Between the play centres, the video games, the gymnastics classes, and the elaborate birthday parties, there are always places to trim, says Deveau. Think about the $200 you might spend on your child s birthday. Consider cutting your child s birthday party back to $100, and investing the other $100 into an RESP. You ll immediately have $120 in the account, and you re still having a party. Save even more by making your own cake instead of ordering one from the bakery or having an old-fashioned party at home instead of renting out a play facility. 5. Involve your family Deveau recommends asking relatives to consider giving experience gifts, such as paying for soccer camp or swimming lessons, rather than toys. They re more memorable than toys that get lost or broken, and you can put what you would have spent on these lessons or activities into an RESP to save for their future education, Deveau says. As well, you can encourage grandparents looking for a way to contribute to also open RESPs in your children s names.

5 PAGE 5 Will the enhanced CPP be enough to live on? Canada Pension Plan benefits are going to rise, but you ll probably need more than CPP for a comfortable retirement. To get there, start saving now. You might have heard that the Canada Pension Plan (CPP) is being changed to increase payouts to seniors. If you re still working and making contributions to CPP in 2019, you ll get more from the CPP when you retire. That s definitely good news. But if you re already retired or you plan to do so before 2019, you won t be affected. In any case, it s important to think of the CPP as just one slice of your financial retirement pie you need to consider more ways to save for the future. The 3 big government retirement programs are CPP, Old Age Security (OAS) and the Guaranteed Income Supplement (GIS). While CPP is run by the federal government, in truth, only employers and employees pay into the plan, not Ottawa. The federal government says it believes as many as 1.1 million Canadians aren t saving enough for retirement, so starting in 2019, annual CPP contributions will increase gradually over 7 years. For example, someone earning $54,900 annually will contribute about $6 more a month in By the end of the 7-year phase-in period, that person will be contributing about $43 more per month. Maximum CPP benefit to raise by nearly half Once fully in place, the CPP enhancement will increase the annual maximum CPP retirement benefit by about 50% over the current maximum benefit of $13,110. In today s dollar terms, that s an increase of close to $7,000, bringing the maximum benefit to nearly $20,000 per year. are gone, returns are harder to get on investments and our debt load is at an all-time high. Start saving for retirement early Most people start to think about retirement when they turn 50 or so, but this is a task people should be concentrating on from the very first day of their very first job. If you wait until age 50 or 55 to start thinking about retirement, there s really not enough time to make up that lost amount, so many Canadians will have to make do with a lower retirement income or work longer despite the CPP increases. A successful retirement needs planning ahead of time to estimate how long you have to work before you can retire comfortably. The time to start thinking about it is now. Also being changed is the increase in the maximum amount of income covered by the CPP. Once the program is fully phased in, the maximum will have risen to $82,700 from $54,900, so those with higher incomes can earn CPP benefits on a bigger portion of their incomes. But Canadians should remember that unlike the CPP, programs like OAS and GIS are funded out of general tax revenue. Still, saving enough is a tough row to hoe. Canadians are living longer, many defined benefit employee pension plans

6 PAGE 6 Recipe hub From Chicken Tortilla Soup Ingredients 2 skinless, boneless chicken breasts, cut into cubes 1/2 teaspoon olive oil 1/2 teaspoon minced garlic 1/4 teaspoon ground cumin 2 (14.5 ounce) cans chicken broth 1 cup frozen corn kernels 1 cup chopped onion 1/2 teaspoon chili powder 1 tablespoon lemon juice 1 cup chunky salsa 8 ounces corn tortilla chips 1/2 cup shredded Monterey Jack cheese (optional) Recipe and photo submitted by: Star Pooley Directions 1. In a large pot over medium heat, cook and stir chicken in the oil for 5 minutes. Add the garlic and cumin and mix well. Then add the broth, corn, onion, chili powder, lemon juice, and salsa. Reduce heat to low and simmer for about 20 to 30 minutes. 2. Break up some tortilla chips into individual bowls and pour soup over chips. Top with the Monterey Jack cheese and a little sour cream. Monte Cristo Sandwich - the Real One Ingredients 1 quart oil for frying, or as needed 2/3 cup white 1 egg 2/3 cup all-purpose flour 1 3/4 teaspoons baking powder 1/2 teaspoon salt 8 slices white bread 4 slices Swiss cheese 4 slices turkey 4 slices ham 1/8 teaspoon ground black pepper 1 tablespoon confectioners sugar for dusting Directions Recipe and photo submitted by: SEAWAKIM 1. Heat 5 inches of oil in a deep-fryer to 365 degrees F (180 degrees C). While oil is heating, make the batter: In a medium bowl, whisk together the egg and water. Combine the flour, baking powder, salt and pepper; whisk into the egg mixture until smooth. Set aside in the refrigerator. 2. Assemble sandwiches by placing one slice of turkey on one slice of bread, a slice of ham on another, then sandwich them with the Swiss cheese in the middle. Cut sandwiches into quarters, and secure with toothpicks. 3. Dip each sandwich quarter in the batter so that all sides are coated. Deep fry in the hot oil until golden brown on all sides. Remove toothpicks and arrange on a serving tray. Dust with confectioners sugar just before serving.