Have you ever wondered how you would pay for a funeral? I am sure you have heard that funerals are expensive – right? Not necessarily! People are conscious of not spending a lot on a funeral and getting excellent value for what they do select. Here are 2 ways to help reduce the cost.
1. Pre-plan and Pre-pay
The very best way to spend less money on a funeral is to pre-plan and pre-pay for this. Why? if you pre-plan and pre-pay for a funeral in Ontario, the Funeral, Burial & Cremation Services Act, that came into effect July 1 2012, mandates that Funeral Homes must guarantee the future cost of goods and services that are prepaid with that funeral home. This means you are paying in today’s dollars for a future need. That is an important fact to consider as we all know that costs continue to rise. Can you think of anything else that you can prepay and the future cost is guaranteed? I can’t, and we know that all of us will need a funeral or a celebration of our life at some point.
2. Move Funds
Another way to have your money work hard for you is to move money from a TFSA into an Eligible Funeral Arrangement. Here’s how…
If you have made contributions into your TFSA, the money in this account earns tax exempt interest. Perhaps you have maxed out your TFSA and would like to know how to put more money into the TFSA. If this is your scenario, then make an appointment at the funeral home of your choice and find out the exact cost for the type of funeral you would like to celebrate your life.
The Funeral Home will prepare a goods and services contract for you to sign. Then move this amount of money from your TFSA into your chequing account and use these funds for the funeral prepayment. Once you have paid in full for the selected goods and services, the funeral home is now obligated to guarantee the future cost and the inflationary risk is on the funeral home. Additionally your funds in an Eligible Funeral Arrangement are also earning tax exempt interest.
Now you have created more contribution room in your TFSA and you can work with your financial advisor to top up your contributions.
A win win for life’s no win.
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Until next time