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Young professional workers face an array of decisions as the comfort blankets of their education or training years are pulled away and replaced with new realities. They need to figure out how to accumulate down payments for homes, cover wedding costs, commence retirement nest eggs, manage debts before they get out of control, and acquire life and health insurance.
Financial planning requires a high degree of customization, and while there’s no such thing as one-size-fits-all, certain groups do have similar needs. Many young professionals require solid initial guidance to help meet their priorities. A short-term goal might be as simple as paying their credit card bills on time. “Sometimes you don’t even realize how that affects your credit score down the road,” Ms. Power says.
The HBP allows for a $35,000 tax-free withdrawal that must be paid back within 15 years. FSHA contributions are completely tax deductible, helping reduce a client’s tax bill for the year it is claimed, or generating a return that could then be put into a Tax-Free Savings Account or RRSP. She notes that full-time professionals should study what their employers might offer around RRSP contributions and insurance. “I often ask them to bring in their benefit package. I want those clients to get as much ‘free’ money as they can.”For young professionals starting families, Ms. Jensen says insurance should reside at the heart of their financial plan.
If a client has a young family, term life insurance can be a low-cost part of their financial foundation. “If they’re young and healthy, they can lock into very low rates for a long period of time,” Ms. Jensen says.
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