Winnipeg Free Press

Winnipeg Free Press (Newspaper) - January 22, 1990, Winnipeg, Manitoba Winnipeg free january 16 Dave free press makes resp King of investments Roc tootle by Wally Dennison youre 30 years dreaming of heading off into an Early retirement Sunset at How would you like to take with you or suppose youre even 20 or 25 or that could be there 30 years Down the that a barrel of you make an investment of just yearly in a registered retire ment savings that would be the accumulation from an resp compounded on an average interest rate of 10 per says Paul president of the Mani Toba chapter of the Canadian association of financial that what you can create under the tax sheltered resp because its magic of compounding interest that each addition of interest to the fund compounds to earn More and that some Golden Opportunity in these taxing times with a seven percent goods and services tax on the horizon and virtually no tax shelters except the also remember that the interest income deduction vanished with the 88 tax adds a division manager with investors group youre now taxed on All interest earnings from interest bearing on the other the govern ment has attempted to give you a better shot at building a secure and comfortable retirement through the pension Reform and resp Legisla Tion tabled in the commons last month a much delayed package that undoubtedly will pass into Law this in you can create far More than the cited above perhaps million or or if you contrib Ute faithfully Over 30 years to the yearly maximums provided under the packages increased resp contribution those allowable limits Rise in increments yearly from in 1991 to in and outlined elsewhere in this special Section Are the rules governing the Paul Taylor Heads Manitoba chapter of Canadian association of financial the idea behind this move to higher resp limits is to shift much of the responsibility for building retirement Security from government to its not such a bad considering Ottawa problems wrestling with our huge National More the whole thing has everything to do with a persons own Pride of inde latest data from 1986 for that d of 1 million people aged 65 and Over filing tax just 25 per cent show income of More than while 61 per cent show less than d inflation of five per cent annually reduces a fixed pension by 40 per cent in 10 years that of pension income today will be Worth Only in purchasing Power in 10 d in the eight years through the Cost of living had jumped 73 per the Cost of operating a Home 67 per mortgage interest 80 per fuel and electricity 100 per and Home insurance 100 per d Public debt through credit purchases and residential Mort gages were estimated at a because of the uncertainty that has recently clouded the future of Lon accepted government social it appears More important than Ever to Start saving earlier for says Dennis presi Dent of annuity planners of we May have just seen the tip of the he referring to the Mulroney governments so called Clayback proposal to tax Back part of the old age Security benefits from seniors drawing incomes of More than 000 a if you dont have a company pen Sion you should certainly make the resp the Cornerstone of your financial Security and its Best to manage it conservatively if its your Only As resp experts the Only valid reason for having an resp is that its an enforced Sav Ings its tax shelter feature is a major reason Why it beats every thing else available in saving for in the an resp portfolio gives you a Bottom line of far vie etim Icher comr Ian it May sound but its really no More no More waiting til the last minute to get the Best resp rate with our retire Richer sooner youre guaranteed the Best even if you make your contribution Long before the How does it work just get your resp term Deposit any Day before this february and Well give you the rate for that Day or deadline whichever is no if you buy your resp term Deposit and our rate is higher on deadline youll get the deadline Day interest rate for the term you and it will be effective All the Way Back to the Day you contributed we also guarantee that whatever rate you it will be As High or higher than the resp term Deposit rates posted by Royal Toronto Dominion Bank of Nova Bank of or Canadian Imperial Bank of be an Early switch your resp to Central Well take care of the Transfer for and youll retire and Centre Alt guaranty Central guaranty Trust company Canadas third largest Trust company member of Cunt in Deposit corporation 354 Portage Avenue Kildonan place 6616540 greater wealth than the Pool of Money which could be built in after tax dollars from contributing equally to taxable investment instr take just for lets assume that carries a 10 per cent interest rate and that youre in a 40 per cent tax invest ing that amount yearly for 30 years outside an resp would yield just compared to the produced within an and just imagine what the difference would multiply to if the yearly investments were set at higher its no coincidence that virtually every strategy plan for Early retire ment lists contributing As much As possible to an As the resp income Generator is sparked Best by making yearly contributions As Early As pos sible in the year for the following tax rather than delaying the contributions until late in february with the aim of reducing taxes for the previous tax in dont wait unless you must until the March 1 deadline to contribute to your 1989 for if you make your contribution today for the 1990 tax year rather than for the current tax your Money will capitalize on a Lea time Frame of 13 Over a 12month time yearly contributions earning an average of 10 per cent annually in interest would add to your resp total Over 25 years if put in at the beginning of the rather than at the and contributing Early is even More attractive now that the interest income deduction is if you have the Money for your contribution set aside in a savings shift it into an resp where tax on the interest earned can be but even if you dont have ready by All get started on the resp Road by borrowing the funds through an resp borrowing of resp Loans has in creased dramatically since 1987 and has gotten Many into the Stream of planning for says president of the Manitoba chapter of the Trust companies association of assistant Vic president of the Manitoba Region of first City offers an example of How an resp loan would Benefit anyone who has in savings and has a credit card debt of carrying an 18percent interest Fenny suggests that the person take his in savings and use it to pay off the credit card then take out an resp loan of to make his resp he frees himself of the credit card debt on which he was paying 18 per cent and is now paying just 12 per cent interest the Bank prime on the resp he has a swapped More expensive debt for a cheaper Fenny and he has two even More important he now has an resp working for him at a com pounded interest rate sheltered from and he has an immediate tax Benefit to reduce his 89 earned hire impartial professional to map resp action plan continued from Page 17 calculation based on your earned income of the previous year that 1990 minus the pension adjust ment amount which reflects benefits accrued the previous year in your company in any you will be much better geared for this new sys tem if you begin mapping a personal resp action plan now if you but preferably with an impartial if you have existing resp invest begin reviewing them so that youre aware of their conditions and maturity annual statements from res pissing institutions contain this calculate the maximum amount youre eligible to Why risky Pur future with an unproven Asp in the to inure i und Imi stors earned financial 491 Portage Avenue 7884040 Trimark contribution deadline for the 1989 tax year is March if youre a member of an employee pension you should find out what Type it is if you dont its surprising How Many workers Are in the dark As to what kind of plan there participating As experts your entire resp personal action plan should be tailored in concert with what youre contributing to that company the flow of retire ment benefits you can expect from and the projected payouts from cup and about 95 per cent of Canadian employee plans Are defined Benefit annual statements to plan members explicitly state the pension a worker will receive on no matter How much the plan has earned Over the or How much has been contributed to a Money Purchase in specifies the but not the amount a worker will receive at a workers actual pen Sion depends on the contributions to the plan and its investment earnings at the time of his or her retire after determining your contribution you should then take Stock of your current personal finances and determine whether your existing rasps Are still suited to your if there or if you Are at All begin gathering information so that you can make a knowledgeable Revenue Canada has booklets on rasps and most financial institutions have a variety of informational after selecting the resp options you feel Are Best suited for you Likely can Benefit from visits to several institutions offering these products and talking to the specialists listen carefully to its imperative that your invest ments Are handled by people who understand their products and recognize the value of Good More interest for your resp Money for 5 year term resp on 1520 Mouth term resp or transfers exiling Lipo Siu 01 of no tills Juliai la do nth or us Uny Lime get More out of your member Ciuda Deposit insurance Curp Araumi tort Curry 1181 3210 Pouge 8317777 Duomo in Winnipeg 275 Pouge i North Winnipeg 1330 main 5809o87 Brandon 921 Rosser 7272481 ;