PLAN A SOUND FINANCIAL. A Note from Gary:

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1 A SOUND FINANCIAL PLAN DECEMBER A Note from Gary PG1 + A Note from Scott PG2 + Manulife One PG3 + Critical Illness Insurance PG4 + Term Insurance vs. Mortgage Insurance PG5 + Year End Checklist PG6 Gary & Myrna Kwasnecha A Note from Gary: On November 12, 1954, I entered this amazing world. Reportedly the weather was extremely cold with lots of snow. My father, Peter, dropped my mother, Joan, off at the Lamont Hospital, kissed her goodbye and told her he would pick her up in a week. With his lunch box full of sandwiches he headed off to work. Dad s presence and support in the delivery room was not required and no pictures or videos of this historic delivery were made. There have been dramatic changes in how a baby arrives into today s world. Mom is sent home within 24 hours and Dad may be entitled to paternity benefits, something my father would not have considered even in his wildest dreams. Just as the work of entering this life evolves and changes, so does the work of dealing with our Canadian Pension Plan (CPP) benefits. Recently my mother expressed surprise to hear that I was contemplating taking CPP. As she will tell you, "It seems like just yesterday that we brought Gary home from the hospital. During my 37 years in the insurance and investment business, I have advised hundreds of people on numerous investment and insurance issues. There are as many opinions about these important issues as there are advisors and that is why I find my career so interesting. I m delighted to tell you that my decision is made. In December 2014 I will receive my first monthly CPP cheque. One tool I used to make my decision was a break-even analysis which is a calculation of numbers and projections, something to generate possible what if scenarios. My CPP will be a reduced amount based on 2012 legislation changes and my reduction will be greater than my father's was. The analysis demonstrated that if I live into my late 70's it may not have been in my best financial interest to take early CPP but the dollar value of the CPP was only one factor in my decision. Of course I hope to be alive well into my 80's just like my Dad. My future plans include joining my good friend Darrell as we spend our monthly cheques on the odd riverboat ride and hunting and fishing trips. Perhaps we ll treat ourselves to an exotic meal or vacation destination. Possibly we ll gift it to our grandchildren or a favorite charity. Brian, another good friend of mine, owns a wonderful place in Arizona. When we visit, the sign on his guest Casita door says "Thank You Canada." Brian estimates his and Sharon's reduced CPP pays the majority of his home expenses during the 5-6 months they are in residence. His daughter and grandson from Toronto visit, sometimes for up to 3 weeks. Brian, a proud father and grandfather, says, "How do you put a value on a visit from your daughter and grandson? "Thank You Canada." So, with upcoming changes in the postal service, I am hoping Canada Post remembers Leduc s location. Sometime around December 12 th I will visit the post box down the block and pick up my first monthly CPP check and even though it may be reduced my smile won t be. To put it into perspective our former Federal Finance Minister, the Honorable Jim Flaherty, passed away this past year, living less than 30 days after he officially retired. You do the math while I figure out how to spend my CPP. "Cheers". Assisting people to accumulate and protect their wealth since 1977

2 A Note from Scott: The markets have had a rocky finish to the 2014 calendar year. On September 3 rd, the TSX hit its highest point EVER as it closed at 15,657, up 14.95% since January 2 nd, Over the last 5 years, the TSX is up over 40%. We are just over 6 years since the markets started to crash for the Financial Crisis of , and for many clients I speak with, it feels like it was just yesterday. It s an extremely gut wrenching feeling knowing your portfolio is collapsing by 30% or 40%. However, as we look back today, clients that stayed invested were able to recover those losses and the 10 year return for the TSX is just over 6%, a rate we would be happy with for all of our clients. Quite honestly, as an investor with a long term time horizon, I d prefer if the markets went down and stayed down for a while. Market volatility is inevitable but I am investing money on a monthly basis. The more of the market I can buy for my monthly contributions, the better my investments will perform long term. If you reference any Andex chart, the markets go up over the long term but there are many times in its history where you can pinpoint time periods of significant losses. As I get closer and closer to needing my money for retirement, I will lower my exposure to the market so my portfolio is affected less by the volatility. At Financial Services Group, our job is to figure out how your investment, insurance and estate goals fit into your overall PLAN. If your goal is to save for your first home in 5 years, our advice for you would be different from our advice to another client with a goal to save for their retirement in 35 years. Our further responsibilities are to keep you focused on your ultimate goals and help you white out all the day to day market noise. As you know, we have various platforms to achieve our client s investment goals, from the Manulife Bank Advantage Account that acts as a high interest savings account, to the FSG Savings Plan and the tried and true Guaranteed Investment Certificates. We can almost always find a way to achieve your investment goals. Feel free to call us any time to review your investments and to ensure we have matched your investment selection and your asset allocation with your investment goals. In the last 90 years: The market has gone up 73.9% of the time The market has gone down 26.1% of the time The market gained more than 20% in 33% of the time The market lost more than 20% in 4.5% of the time The gains in positive years produce more than double the losses in the negative years

3 Introducing Manulife One At Financial Services Group, one of the most important aspects of our role is to look for opportunities to improve your overall personal finances. In addition to setting up appropriate If you turn investments , and final protection, RRSP contributions the mortgage must be made you by choose, December how 31, you structure However, your debt and RRSP manage deductions your can cash be carried flow forward each play indefinitely, an important and can role be spread in achieving out over your several financial years in order to reduce taxable earnings in retirement. goals. Manulife Bank believes integrated banking is smarter banking and offers Canadians a unique combined mortgage and banking solutions Manulife One. Manulife One is an innovative, all-in-one account that allows to you to combine your mortgage, personal loans and lines of credit with your income and short-term savings, which could help save you interest costs and give you more control over your finances. If you would like to learn more about Manulife One contact FSG today and we can refer you to a Manulife Bank Banking Consultant.

4 Critical Illness Insurance A Closer Look In December 2013, John and Jane were first introduced to Critical Illness Insurance by their advisor at Financial Services Group. This insurance product provides the policy owner with a lump-sum cash benefit if she/he is diagnosed with a covered condition that also satisfies the specified waiting period. The money received can be used however they wish. The young couple, having just purchased their first home, quickly understood the benefit of having financial options to help them with recovery if either of them were diagnosed with one of the 22 covered conditions. John and Jane decided to make this product part of their Financial Plan. The couple opted to add on two of the optional Riders that are available with this product: 1) Return of Premium on Death Rider. This option guarantees that 100% of the premiums already paid will be returned if the policy owner passes away before becoming eligible for a covered condition benefit. 2) Return of Premium with Early Surrender Option Rider. This rider allows the policy owner to cancel the policy at any point after 15 years into the policy and receive 100% of their premiums back. Because Jane bought the product at a young age and was healthy, the policy is extremely affordable for her- costing only $29.50 per month. Jane Non-Smoker, Age 24, $25,000 in Coverage Monthly premium $15.18 Return of premium on death monthly premium $0.53 Return of premium with early surrender monthly premium $13.79 TOTAL MONTLY COST $29.50 In order to be considered a non-smoker for an insurance product, you must be smoke-free for one year. John had quit smoking in April Therefore, when they applied for the Critical Illness Insurance seven months later in December 2013, John had to list himself as a smoker. Once he was one year smoke-free, John applied to get his smoker rating removed from his policy. Below you can see the difference between what he was paying as a smoker and as a non-smoker. John- Age 28, $50,000 in Coverage Smoker Non Smoker Total Savings Monthly premium $69.20 $38.06 $31.14 Return of premium on death monthly premium $5.75 $1.84 $3.91 Return of premium with early surrender monthly premium $35.95 $29.83 $6.12 TOTAL MONTHLY COST $ $69.79 $41.11 Quitting smoking resulted in $41.11 savings in monthly premiums!

5 Before you say yes to mortgage insurance When you are approved for a mortgage, your lender will offer to sell you mortgage insurance. Although it may seem convenient, before you say yes to mortgage insurance you should know that you have other options. Protecting your mortgage with an individually owned term insurance plan provides better value, more flexibility and in most cases at a lower cost. Term Insurance YES. You own the policy and you name your beneficiaries. YES. You can choose the amount of coverage you want, regardless of your mortgage balance. You can increase or decrease your coverage and convert it to permanent protection. If you pay off your mortgage, your coverage continues. YES. Upon death, the benefit goes directly to your beneficiaries. They decide how to best use the money. YES. Your premiums and benefits are guaranteed for the life of the policy. Only you can cancel or make changes to your policy. YES. The amount you pay for your coverage is based on your age, health and smoking status. I pay the premiums, so I own the policy. Right? Is the coverage flexible? Circumstances change. If it s better for my beneficiaries to use the proceeds from the policy for something other than paying off the mortgage, will they have that option? Is the coverage guaranteed? I look after my health, and I don t smoke. Will that make a difference in the amount I pay for coverage? Lenders Mortgage Insurance NO. You are part of a group policy owned by your lender. Your lender is the beneficiary. NO. Your lender will insure you only for the amount of your mortgage. You can t alter, renew or convert the policy. If you choose to move your mortgage to another lender, you can t transfer the policy. Your coverage ends when your mortgage is paid off. NO. Upon death, the benefit goes directly to your lender to pay off the mortgage. NO. Your premiums and benefits are not guaranteed. The lender can change or cancel the policy at any time. NO. Since mortgage insurance is usually provided through a group plan, you pay the same rate for your coverage as everyone else.

6 Year End Checklist Are you a part of The FSG Piggy Bank Program? We want to hear from you! Tell us how you are filling up your piggy bank or send us a picture with you and your piggy bank. Your name will be entered into a draw for a $100 gift card to Toys R Us. Entry deadline date is January 29, How to enter the contest: Donate to your favorite charity by December 31 st to reduce your tax bill for If you have unused RRSP or TFSA contribution room, you may want to top up these accounts as part of your year-end activities. The deadline for RRSP contributions for the 2014 tax year prior to Year End Checklist March 2, The 2014 maximum RRSP contribution limit is $24,270. If you turn 71 in 2014, final RRSP contributions must be made by December 31, However, RRSP deductions can be carried forward indefinitely, and can be spread out over several years in order to reduce taxable earnings in retirement. T4 slips are mailed on or before the last day of February. T5 slips are mailed on or before the last day of February. T3 slips are mailed on or before the last day of March. 1. Visit our website at 2. Click on Piggy Bank Program Contest on the left hand side of the home page. 3. Fill out the entry form and attach your picture. Contact your advisor to find out how you can get your children or grandchildren involved in the FSG Piggy Bank Program. Office Hours: Monday through Thursday, 8:30 am to 4:30 pm Financial Services Group supports a healthy family lifestyle. This holiday season we will be taking the opportunity to enjoy time with our families between December 24th, 2014 and January 4th, Regular business hours will resume on January 5th, We thank you for your continued business and appreciate your ongoing support. Find us on Facebook and share our page with your friends Street Leduc, Alberta T9E 6Z1 T: F: Toll free: