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Page SECTION C THE HERALD February IT II Report on RRSPs tells you about planning for future youve never really I the ins and owls of RRSPs retirement income funds and the like the edition of The Delaney Report on will ell you all you need to know and more about planning for your future Whether you have en or are thinking about setting ono up this book prepared by retirement plann ing expert Tom will serve is a valuable guide One of the many Interesting tidbits found in the book is the fact that the government is planning a change to RRSP rules in that would allow you to carry forward for seven years contributions you could not afford make In past years If you have not used of your allowable limit this year it may not be lost to you forever You may be able to add It to your contribution some time in the future To make this work presumably you would have to hove an in place So If you havent got one gel one whether you can afford to or not Even a small deposit may allow you to take advantage In future years when you may have more money than you do now of this ex pected change PLANS POPULAR In 15 the latest year for which numbers are available IS million Canadians had billion stashed away in registered retirement sav ings plans The biggest contributors by income group were people earn ing to Next came those earning to followed by people earning to 30000 The idea behind retirement sav ings plans is to have private Income to augment the payments you will receive from Ihe Canada Pension Plan Retired people who depend on the government for their income sui a tremendous drop In their living standard Your Business dianneWley Business Analyst Thomson News Service peo ple earning more than their usefulness rise In proportion to your tax bracket Mr Delaney gives an example of two people age and In a per cent tax bracket with and without an RRSP Both invest at 10 per cent each year for years The person without the would pay 34000 In taxes on his In vestment over 30 years the other would pay none The person with no would have a net return on his Investment of 47000 after years RRSP Is left with a retire ment fund of compared with for the person who put the same amount of money Into an Persuasive Isnt if OTHER BENEFITS RRSPs bring other benefits as well For example if you find yourself without work one year you can withdraw money from your plan to help meet your expenses The same would apply if you plan to go back to school at some point in Mr Identifies four fun damentals in evaluating an how safe your money Is bow flexi ble the plan is what return you can hope cam and what fees com missions and other charges you will ha veto pay To help you assess the various Elans he winds the book up with a guide to RRSPs He also in cludes compound interest tables which show how your money will and a list of financial by deposit insurance Mr points out the dangers of holding more than in a deposittype plan since the Canada Deposit Insurance Corp on ly insures deposits up to that amount As well he raises the question of how secure your money is with on in surance company which is not covered by the governments deposit Insurance Is an important guide for peo ple interested In really taking charge of their financial planning Because of recent government legislation you have more retire ment planning flexibility than ever before If you are saving for your re tirement through an RRSP or another taxsheltered retirement plan then an important decision must be made prior to the end of the year in which you turn years old Unless you decide to cash in your phut which means having to pay taxes on the lump sum you must select one of two retirement income vehicles which allow you to continue the tax- sheltering that helped your money grow under your This column deals with option Annuities deliver steady guaranteed annual income A Annuities The next column will deal with option Registered Retirement Income Funds RRIFs What an annuity and how does It work for you An annuity is a contract often purchased with funds ac cumulated through an RRSP which provides regular payments for a specified period of time such as to age or as long as an individual or spouse is alive Annuities work in much the same way as life insurance but they protect you against different risks The basic objective of life insurance is to your dependents with a continuing source of income should you die while the key reason for an annui ty is provide you with a contin uing source of income for as long as you live during your retire ment Like life insurance an nuities work through the prin ciples of shared risks and the taw of relating to the Associate Tax Consultants INCOME TAX RETURNS DONE ty of individuals of a certain age group and health status Whats the difference between Immediate and deferred an nuities An immediate annuity is bought with a single lump sum payment often at the time of retirement or following ihe transfer of funds from an RRSP The payment of income usually begins in the following month if it is to be paid monthly or the following year if that is the terms of the contract The deferred annuity is struc tured so that income payments are made at some future date usually at the time of your planned retire ment This type of annuity can be purchased by either a single premium or by regular install- payable during the whole or part of the period of defer ment How are annuities sold Life annuities are purchased from life insurance agents Fixed period annuities arc sold by life insurers as well as trust com panies Such plans can provide peace of mind to those seeking a steady guaranteed income for as long as they live For further information con tact Lye Underwriters Associa tion of Canada 41 Rd Don Mills Ontario M3B 273 or speak to your local life underwriters association 00 p 101 GUELPH ST GEORGETOWN 8772217 SPECIAL OFFER WHEN WE DO YOUR INCOME TAX RETURN WE GUARANTEE DELIVERY TO TAXATION DATA CANADA THE NEXT DAY BY COURIER ATNOEXTRA CHARGE YOURSELF FIRST The only way to save money and build toward a better tomorrow is to keep some of what you earn We can show you how to do it and how to make your savings grow Call us today J Investors Group Inc County Court Blvd Suite 120 Brampton Ontario PATRICK DONNELLY