Boggs: Snowbirds: plan your finances before your escape

Canadian snowbirds are taking off for the warmth of the sunny southern United States and other popular vacation destinations.

While away, the last thing you want to worry about is money and your investments. Some good planning can ensure you have your financial house in order before leaving and enjoy a stress-free vacation.

Critical things to think about before you go are access to cash, your investments and preparations in the event of an emergency or catastrophe. These are essentials.

Before you leave take an inventory of bills that must be paid while you’re gone such as credit cards, loans, income and property taxes, subscriptions and membership dues. Make sure you can pay them while you’re outside the country, have someone do it for you, or arrange for them to be paid through preauthorized payment or automatic withdrawal from your account. Internet banking is a great way to keep track of expenses and bill payments.

One of the big stresses of being abroad is fluctuations in currency.

“Having U.S. money in a U.S. account eliminates stress in the ups and downs of currency and exchange rates — one of the biggest concerns that many travellers have,” says Rodney Adams, a financial adviser with Edward Jones in Edmonton.

“You may also want to get a U.S. credit card on your U.S. account, again to avoid exchange charges that you can incur if using a credit card on your Canadian account.”

Before heading off, it’s a good idea to identify the most convenient ATM locations near where you’re staying so you will be able to withdraw funds from your U.S.-based account.

With so much volatility in financial markets these days, keeping in touch with your investments also is very important.

It’s probably a good idea to meet with your financial adviser before you leave home to make sure your portfolio is in good shape and to make arrangements for investments that mature while you’re away such as Guaranteed Investment Certificates, term deposits and bonds.

Make sure your adviser knows how and where to reach you while you’re away and vice versa.

How much time you want to spend checking in on your investments likely will depend on what type of investor you are and the type of investments you have.

“If you’re a conservative, long-term investor with a diversified portfolio you probably will not need to make a lot of changes while away,” says Adams. “Most of the calls we get are from people who basically want an update about what is happening. If your portfolio is based on your long-term goals chances are those won’t change in three or four months and it should be pretty much maintenance free.”

Adams recommends snowbirds consult with an insurance specialist to get the travel and medical plans that are right for them.

“As you age it gets more challenging to get insurance,” says Adams. “Make sure you understand the costs, what you do and don’t qualify for. We have seen people stop going strictly because of the cost of insurance.”

There are legal and estate issues to cover as well.

Your powers of attorney should be up to date in the event that something happens to prevent you from managing your affairs. Have a current will in place and let someone know where your legal documents are kept.

You also should be very aware about how long you stayed in the U.S. Canadians are permitted to spend 183 days in the U.S. over a 12 month period, not just in a calendar year.

If you exceed that limit the government considers you a U.S. citizen and you could become eligible to pay U.S. tax. The U.S. has been cracking down and enforcing this rule, which has caused some Canadian travellers some problems.

“I have yet to meet many people who really understand how this works, but as a rule of thumb if you spend four months away you should be safe,” Adams says.

Talbot Boggs is a Toronto-based business communications professional who has worked with national news organizations, magazines and corporations in the finance, retail, manufacturing and other industrial sectors.

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