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Page MANAGEMENT ISSI February 1WT Man at work or money at work Venlta Van US economist certified financial plan and author of The Power 01 Money Dynamics says in her booh that there are three chief sources of Income The first Is you at work However there will come a time when regardless of how badly you want to work the world will not let you will retire you The second source is your money at work If you make proper preparation and turn tome of your Income into growing investments a lime will come when you will no longer have to work for your money you will be able to trade places with Back a Fighter as GIVE TO Easter Seals jour money and let your money work for Income from capital is immensely more than in come from labor The third source of income is chanty Man at work money at work charity which source do jou wont to depend on when you retire Since man at work may not be art option open to you and charily has rarely brought happiness apply your in telligence toward assuring yourself hot there is sufficient money work to retire In financial dignity This is where a registered retire ment savings plan can help provide sufficient money at work A registered retirement savings plan more commonly called pretax funds with a view to using accumulated funds as retire mm income Not only arc contribu tions deductible within specified limits but the income of the dan is not taxable until the funds are withdrawn from the plan Contribution limits for the 1986 taxation ycararo 1 Individuals who save through only contributions SAME DAY TAX RETURNS 101 St 8772217 not exceeding per cent of earned income up Members of employers pension plan andor deferred profit sharing plans contributions not ex per cent of earned in come up to a maximum of S3 reduced by contributions to registered pension plans Proposals to further increase con limits of these plans arc under review Other points on to remember are Individuals may hold as many accounts as wish with any number of financial Institutions accounts are fully transfer lax free to another RRSP If is cashed In It gets add to Income for thai year and Is ly taxable at your current personal lax rale This can be an advantage if the was taken In a year when you had a high taxable income and then withdrawn in a year with low taxable income Conversely if your taxable income has increased over the years then you will pa more lax on your original deposit plus on any growth This will be more than the tax saved when you made the original con A spousal can help to equalize the amount of retirement income both husband and wife will receive and take advantage of lower marginal tax rates When the plan funds ore received by the spouse they will be included spouse income provided thai contributions to a spousal plan been made In the year funds withdrawn or the immediately preceding years For a net cost of lets than per week an individual can put away St each year for retire ment Lets put this money to work and see what this really means time Now that you have a WISP which only coat you 90 it is lime to decide how hard your should work The answer to that Is as hard as you do A recent telephone survey of bonks and trust companies showed current Interest rales In effect rang log from per cent up to 50 per cent for non redeemable counts These rates are guaranteed They also lock you in for periods of I to years A survey of top qualified funds average annual compound rates of returns over he past 10 years ranging from 17 per cent to per These rates arc not guaranteed They arc not locked In and can be moved any time For comparison purposes let be generous and take the highest guaranteed rate of per cent and be conservative on the mutual fund and use rote of 15 per cent less the maximum one time front end fee of per cent and com pound over a yen r period IIEMJ1 I- Oil Amount invested Future value in years SB FOR NO Amount invested Acquisition fee amount Invested Estimated rite of return value in years Where do you think your money has ihe opportunity to work as hard as you do Even if you selected a very vatlvc mortgage and Income fund with on average return of 12 per cent the estimated value In years on the net investment is A per cent better return for only a 25 percent difference in interest rales Since there arc hundreds of Invest funds to choose from your pro fessional financial planner can help you decide which is Ibe most suitable for you Finally if you think hat il is not necessary to maximize your returns then consider this an average Inflation rale of per cent per year the purchasing power of in years will be 28 Hard believe l if My father bought a brand new Ford in 1959 for That was 30 years ago and the same style cor to day sells for almost That works out to in overage annual in flation rale of almost per cent per year Therefore SB In years at per cent per year inflation will have a purchasing power In today s dollar X The purchasing power of In years would be Remember there Is you at work our money at work orcharily It jour life choice and jour retirement IN LESS TIME THAN YOU THINK YOULL WISH YOU HAD A RRSP The Cash Developer REGISTERED RETIREMENT SAVINGS PLAN Helping Make Your Retirement Easy Affordable and Secure The Allstate Cash Developer should be part of your rclirtmenl plan Gerry can help you start a Cash Developer in just a few minutes Start your Allstate Cash Developer today instate in good hands Allstate Life Insurance Company of Canada Allstate Insurance Company Street Georgetown 8731643 Whats it worth to you How do you rum an HUM income of for person who docs not belong to a registered pension plan The max Here is an example of effect of imum contribution is per an RRSP on your Rased on a cent 6 with lion cm Total income contributor ions personal an 24 federal tax payable On tan lax wilh contribution Total Income Less contributions contributions contributions Basic personal en cm pi ion TAXABLE INCOME 419 ISO 30 11 federal Lax payable Onto no tax payable TOTAL TAX PA HOW IT WORTH TO YOU cash deposit RKSP Taxsavingasaresult OUT OF POCKET COST JO 3 Net average monthly cost Net weekly cost