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Column: Year-end financial cleanup time

November is a time for organization and prep work. Rake the leaves, pull out the snow shovel, change the car tires, inspect the furnace and haul out the winter clothing.
November is a time for organization and prep work. Rake the leaves, pull out the snow shovel, change the car tires, inspect the furnace and haul out the winter clothing.

However, people often fail to organize and prepare in other important areas, like their finances. Overlooking year-end details regarding your savings and insurance policies for example, could mean a hiccup in your financial plan next year.

Insurance plans

Parking the convertible for the winter? Starting a new job next month? Finishing up house renovations? Planning to start a family? These are examples of when it’s time to review your insurance needs and make updates where necessary.

Ensuring your home, auto, employer, life and health insurance plans are up to date means protecting your finances against an unexpected event that could have otherwise derailed your savings and put your financial plan on the backburner.

Investment plans

Registered Education Savings Plans (RESPs) provide government grant top-ups along with your regular contributions. Take full advantage of annual grant maximums by providing the required contributions in time for Dec. 31.

Tax Free Savings Accounts (TFSAs) are a great way to save money without paying tax on growth or withdrawals. The maximum annual allowable contribution amount is $5,500.

However, if you’re not able to meet the Dec. 31 deadline, any unused room is carried forward and an additional $5,500 becomes available for the 2015 year.

In addition to reviewing the above deadlines with your financial adviser, remember to check for any investment tax liabilities that may be applicable to the current year.

Wills and POAs

A will is a legal document outlining your last wishes in detail as it may relate to any assets or specific instructions you’ve left for loved ones. The trusted person you assign to oversee your will is called an executor.

A Power of Attorney (POA) is a legal document naming a person to act on your behalf in the event you are unable to do so, due to a physical or mental limitation for example.

Both your will and POA should be reviewed on an annual basis. Had a change in marital status? Sold or purchased a major asset this year? Has the relationship with your current executor or designated POA deteriorated?

Life events often cause us to reconsider some of the final wishes we once thought were best aligned with our situation at the time. It’s important to review these documents annually to ensure they are up to date.


You may not have taken advantage of potential medical tax credits throughout the year. Depending on your government and group health plans, it may be worth getting in one last dental check up or eye exam before year’s end.

In addition, charitable donations are a way to reduce taxes provided the donation is received by Dec. 31.

Income splitting between spouses is another great strategy commonly used to reduce income taxes in a household.

In addition to the reasons above and depending on your specific situation, it is worth meeting with your tax professional before year end to ensure you are taking advantage of tax benefits by Dec. 31 of the current tax year.

And finally, be sure to write down some financial goals you have for the coming year and meet with a financial adviser to help determine a budget and approach to achieving your plans for next year.

Heather Tarnopolsky is a Sun Life Financial adviser in Greater Sudbury.