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By Paul Rockel By now, almost all Canadians have their refund or assessment from Revenue Canada for their 1991 income tax return and in the box on the top of the right hand side it indicates how much they can contribute to an RRSP this year. If you are not unemployed or otherwise a victim of the current recession, what are you going to do? Some will say, I won't contribute this year, things are too uncertain, others will contribute less. The daily papers, radio and TV only * report the bad news and there has been a real bad news overload in the last few months. It is under- standable that there is a lot of uncertainty in people's minds. One reason among many to con- tribute to an RRSP is that it gives a tax break. There are three main combined Federal and Provincial tax rates. The marginal rates of tax (this is the amount of tax for each dollar that you earn above the fol- lowing amounts) are: at taxable income up to $29,590, 25.6% between $29,591 and $59,180, about 41% and above $59,181, approximately 47% to 50%. Therefore for each dollar that you contribute to your RRSP your tax saving ranges from 26 cents to 50 cents. Do you know that you can get this saving every pay check, rather than wait until you file your tax return? Talk to a financial planner about this. Another compelling reason to contribute is to get the effect of the most time possible for your savings to compound and grow. The new RRSP rules allow you to carry for- ward your annual RRSP contribu- tion for up to seven years, however it is not such a good idea. You lose those years when savings could be growing and it can add up to a whole pile of money at retirement. If you are 35 years old and invest $2,000 per year at 12% in your RRSP (many mutual funds have done that or better over the long term), at age 65 you will have $482, 665. But if you delay starting those contributions for 7 years, with the same rate of return, at age 65 you will have only $209, 206. Less than half the amount! We live in a'do-it-yourself age. And ....for some things it is very important to do-it-yourself. Maybe a professional can drive a nail faster and straighter, but once it is driven even by you or me it should hold just as well, no matter who had the hammer. But, in the field of finances and RRSP’ it isn't that simple. True we may think that we know a great deal about how to invest our sav- ings, but can we know as much as the professional, who spends all of his’ working days looking and ana- lyzing the best ways to invest, and seeks the advice and counselling of ao } Estate This Week, Wednesday; Janvary'13, 1998 Page 7 ‘other full-time advisors? We doubt it! Placing our RRSP savings into the hands of professional managers just might mean that we well have a much better rate of return, and retirement benefit, than if we try to do it ourselves. This writer believes that the "professional management’ that is found in many mutual funds have proven over the past many years to be the "best" way to invest your monies, whether they be RRSP savings or "just plain" sav- ings. It appears that most of the rest of the world agrees that mutual funds have proven to be the best, because the banks, insurance com- panies, trust companies, stock bro- kers and even some credit unions have jumped on the "mutual fund bandwagon", whereas, not too many years ago, they mostly "ignored" the mutual fund concept (and even ridiculed it). Maybe it is time for you to con- sider professional management of RRSP. For a free long term comparison between an mutual fund RRSP and an RRSP investment earning 10% contact Peter C. Masson, 10 Fagan Drive, Georgetown, Ont. or phone 877-7216. Paul J. Rockel is the author of the book "Why I Invest in Mutual Funds", a director of the Investment Funds Institute of Canada, and Chairman of Regal Capital Planners Ltd, a 25 year old finan- cial planning company with offices from coast to coast in Canada. Keep fit & have fun! * 13,000 Ibs. of Free Weights ¢ Personal Weight Loss & Fitness Programs ¢ Indoor Pool * Hot Tubs ¢ Saunas * Solar Beds VERSIDE THE BEST RESOLUTION for yourself this New Year! * Cardio/Nautilus * Taekwondo D OFF PER MONTH WHEN YOU SIGN UP. EXPIRES JAN 31/93. BD OFFPER MONTH | WHEN YOU SIGN UP. EXPIRES JAN 31/93. I MEN & WOMEN Hwy. 7 & Winston Churchill om aw ow oe en 873-9575. Wath fo wr ew Feel) 873-9655 ee | WOMEN ONL! Downtown Georgetown LOCATIONS 363 Main St. East Milton) 80 Mill Street (Georgetown) your Enjoy a wood stove safely! 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