Retirement Planning
for the
Canadian Investor

Home Page


Client's Comments

Associated Sites


Financial Commentary

Tax Strategies

Borrowing to Invest




Design by
CY7 Computer Services


March/April 2015

Commentary - Hans H. Mathisen

"How much is enough? LIFE LETTER for March will help you to make an informed decision as to your life insurance needs.

"Who do you know?" - April's LIFE LETTER looks at critical illness and the effect it can have on your earning potential, and what you can do to protect your finances.


The importance of retirement income diversification is discussed in LIFE LETTER MATURE for March. One of the primary worries of many retirees is running out of money.

LIFE LETTER MATURE for April looks at "how much you need to retire". There are many things to consider when assessing your retirement needs.

Hans Mathisen





How much is enough?

Len and Grace were wondering if the life insurance they now have would be enough or too much to cover their needs. They met with their insurance and financial advisor who used the following calculation guidelines:

1. Liabilities and cash needs. A person's debts and obligation should not last longer than they do. Enough cash needs to be provided to pay off the mortgage, loans, other debts, and final expenses. Additional funds are required for funding education, child or home-care funding if survivor continues working, providing an emergency fund for unpredictable expenses, and for any special bequests or charities.

2. Capital to provide income. The surviving spouse or life partner, and children still have to meet day-to-day expenses. First, the income needed by the survivors needs to be determined. Second, any ongoing income is deducted from this amount. This will include employment income of surviving spouse, investment income, employer-provided benefits and government benefits. Third, an amount is arrived at that will provide the income needed by using an interest rate you choose. You can decide to create a sum of money that will provide interest income only or a smaller amount that will run out after a certain period of time.

Liabilities, cash needs and capital to provide income are added together to arrive at the total amount of money required.

From this amount is deducted:

3. Assets usable by family/partner. We all have some assets and insurance that can offset our family's cash needs. They include Cash (savings accounts, T-Bills, Canada Savings Bonds, etc.); RRSPs (normally transferred tax-free to surviving spouse and allowed to grow until retirement); Stocks, Bonds, or Investment Funds; Principle Residence (usually not included as survivors still need a place to live. A portion of the value can be used if plans to downsize); Real Estate (other than principle residence); Life Insurance (includes personal policies, group coverage, mortgage insurance and creditor insurance); Farm or Business Assets; Canada/Quebec Pension Plan Death Benefit (up to $2,500 in 2015); and, Other Assets.

After going through the process of measuring their needs, Len and Grace were able to make an informed decision on the amounts and types of life insurance to provide for each other and their family.

Your life insurance needs to be coordinated with your other assets and benefits to meet your long and short term objectives. The result should be an overall plan that you understand, meets your needs and saves you money. Your financial advisor can work with you to put the right plans in place.

Measure your needs – because it’s the responsible thing to do.

Call Hans Mathisen today at (306)242-7042.
or email -

Copyright © 2015 Life Letter. All rights reserved

[Top Of Page]






Who do you know?

Gary heard from a long-time friend. It was not good news. He had just been diagnosed with adrenal gland cancer and spots had been found on his liver. Surgery was to be performed within days of this terrible discovery. This news came just days after Gary learned that his aunt had colon cancer.

Fortunately, Gary's friend and his aunt survived their surgery. Time will tell how long they will survive their illnesses. Medical science will allow them to return to work relatively soon after surgery, likely before either would be able to qualify for long term disability benefits.

Each event has obviously disrupted their lives and will probably have a negative financial impact on them. Gary was relieved that he had taken action to protect himself from the financial mayhem such a critical illness can cause.

What Gary did several months before was purchase a Critical Illness Insurance policy. Critical Illness Insurance was originally developed in South Africa by Dr. Marius Barnard, brother to heart transplant pioneer Dr. Christiaan Barnard. He noticed that patients were surviving their operations and needed help living. Critical Illness Insurance helps people get on with their lives by giving them the financial resources to maintain the lifestyle and independence they had before they got sick.

If you contract one of the diseases or injuries specified in a Critical Illness Insurance policy, you receive a tax-free lump sum between $25,000 and $2,000,000. The exact amount will depend on the cover policy and the insurer. Critical Illness Insurance pays a benefit even if you are still able to work and can cover up to twenty two or more illnesses or injuries, including cancer, heart attack, stroke and coronary bypass surgery.

There are no restrictions placed on the use of an insurance payout. It's up to you - pay medical expenses not covered by insurance or provincial health plans; pay-off a mortgage or other debts; seek medical treatment in another country; take a vacation or time off from work; offset lost income because of a reduced workload; fulfill dreams and wishes; modify your home or vehicle if necessary; maintain your independence.

People are living longer, often with a life-altering illness. Modern medicine can save the patient but often causes a huge financial drain on family resources.

Canada Mortgage and Housing Corporation (CMHC) reports that only 3% of home foreclosures are due to death, but some 46% are due to serious illness. Canadians withdraw hundreds of millions of fully taxable dollars from their RRSPs every year because of the financial effects major illnesses.

Who do you know who has survived a heart attack, cancer, stroke or other serious illness? Would $100,000, $250,000, $500,000 or more extra cash have made a difference in their lives? Could it make a difference to you and your family if you are struck with a critical illness? After all, shouldn't recovery be your first priority?

Critical Illness Insurance – because it’s the responsble thing to do.

Call Hans Mathisen today at (306)242-7042.
or email -

Copyright 2015 Life Letter. All rights reserved

[Top of Page]

[Home Page] [Services] [Financial Commentary] [Tax Strategies]
[Associated Sites] [F.Y.I.] [Client's Comments] [Biography] [More Info]

Mutual confidence is the power that binds together all harmonious human relationships.

Mathisen Financial, Inc.
335 Redberry Road
Saskatoon, Saskatchewan S7K 4W5
Bus. (306) 242-7042 Fax. (306) 242-4314