MONTREAL, Feb. 14, 2014 /CNW Telbec/ - For Valentine's Day, Laurentian
Bank surveyed QuÉbecersi on their habits with respect to managing their personal finances when
living as a couple. According to the findings of this poll, close to
four out of 10 QuÉbecersdo not take their spouse's situation into account when planning for
The proportion of respondents to which this result applied varied
depending on age bracket:
31% of respondents between the ages of 18 and 34
26% of respondents between the ages of 35 and 54
15% of respondents aged 55 and over
"We often see younger people do long-term financial planning
independently of their spouse," explains Guylaine Dufresne, F.P.,
Senior Manager of Investment and Financial Planning at Laurentian Bank.
"At a younger age, it is more difficult to envisage the future and plan
for one's senior years. People often tend to include their spouse in
their financial planning only when purchasing a property or upon the
arrival of a child."
However, there are certain benefits to accounting for a spouse's
situation, particularly as one grows older and earns a higher income.
It can also be advantageous to begin financial planning as a couple,
even at a younger age. This is because it allows for developing the
habit of joint financial planning on an everyday basis, while
establishing the foundations for planning for a major life event like
•Contributing to a Spousal RRSP
Whether it be for an RRSP or a TFSA, everyone is entitled to contribute
the maximum amount. Since 2013, the maximum annual contribution for a
TFSA has been $5,500, and it is in the order of 18% of income earned in
the previous year for an RRSP (up to a maximum of $24,270 in 2014). For
a spouse who earns a higher income or who has made a major gain
(employment bonus, sale of an asset, etc.), this strategy can be very
advantageous. "There are numerous benefits to contributing to a spousal
RRSP," underlines Guylaine Dufresne. "In addition to planning for
retirement together, it allows for a better distribution of savings
among the couple and for sharing the taxable retirement income." It is
important to note, however, that the money invested in a spousal RRSP
belongs to the spouse, and in the event of a separation of the couple,
the consequences could prove undesirable.
The splitting of pension income with a spouse has a particular impact
for couples in which one of the spouses has substantial retirement
income and the other's is more modest. In certain cases, the annual tax
savings could amount to several thousand dollars. "By splitting income
with a spouse, the taxpayer with the higher income can often see their
tax rate dip to lower levels," Ms. Dufresne points out. "Given this
lower rate, the couple could enjoy a substantial overall tax
Everyday Financial Management
When it comes to everyday financial management, the survey indicated a
certain coherence in the results. In fact, similar to the case of
retirement planning, approximately one in four QuÉbecers manages their
finances independently of their spouse.
"Although some couples want to conserve their financial independence,
joint planning of spending can prevent many heated discussions,"
emphasizes Guylaine Dufresne. For example, dividing shared expenses
prorated to each spouse's salary allows for taking each's financial
capacity into account thus making room for a certain degree of
financial freedom for personal expenses. Ultimately, once the shared
expenses are paid, there should be the same proportion of money
remaining for each spouse.
It can sometimes be difficult to address money-related questions within
a couple. Nevertheless, open discussion combined with proper planning
that takes each spouse's needs and situation into consideration makes
for a perfect Valentine's Day gift for both.
About Laurentian Bank
Laurentian Bank of Canada is a pan-Canadian banking institution that has
$34 billion in balance sheet assets and $37 billion in assets under
administration. Founded in 1846, Laurentian Bank was selected in 2012
as one of the 10 winners of the Canada's Passion Capitalists program in
recognition of its sustained success in creating "Passion Capital"
among its people. The Bank employs more than 4,200 people.
Recognized for its excellent service, proximity and simplicity,
Laurentian Bank serves more than one million clients in market segments
in which it holds an enviable position. In addition to occupying a
choice position among consumers in QuÉbec, where it operates the third
largest branch network, the Bank has built a solid reputation across
Canada in the area of real estate and commercial financing thanks to
its teams working out of more than 35 offices in Ontario, QuÉbec,
Alberta and British Columbia. Its subsidiary, B2B Bank, is a Canadian
leader in providing banking products as well as investment accounts and
services to financial advisors and brokers, while Laurentian Bank
Securities is an integrated broker, widely recognized for its expertise
and effectiveness nationwide.
i The survey was conducted by CROP between December 4 and 9, 2013 among a
Web panel of 1,000 QuÉbecers.
SOURCE Laurentian Bank of Canada