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THE HERALD Wednesday October 31 Page 15 Money Matters Seniors realizing pension plans fall short of their dreams GIC RATE 12 I MONEY r CONCEPTS 1 aura By PAUL J Many people that I talk with have come to realize that their employers pension plan just won provide the retirement they have dreamed about Do you know that government pension plans Old Age and Canada Pen Plan are only designed to providL around of the average workers or about ITS YOUR MONEY PaulJ Rock XX per year IF you have con tnbuted the maximum amount to Canada Savings Bonds a favorite investment Canada Savings Bonds have not only been a favorite investment for Canadians over the years but in the 1980s they were also one of the top income earners A 10year Compound In Bond issued on Nov i960 and earning the firstyear yield for each new series would be worth on Nov and would have earned an average return of 11 31 per cent a year over the decade In the case of a CSB issued in the rate of return will have averaged 35 per cent a year over the fiveyear period These figures also reflect the re cent increase in the CSB interest rate which was raised from 10 to 11 5 per cent effective June to Oct 1990 These rates compare very favorably with other forms of fixedincome securities and are often surprising to many investors who tend to see CSBs in terms of security and liquidity says Brian who represents the Canada Savings Bond Payroll Sav ings Plan He referred to a recent study released by the Toronto Stock Ex change on Canadian Shareowners which showed that after their home Canada Savings Bonds were the favorite Investment for most Canadians The TSE study showed that in per cent of adult Canadians owned their own home The number rose to 52 per cent in 1986 and per cent in 1989 This compares with 36 per cent of adult Canadians who held CSBs in 1983 per cent in and 32 per cent in Other investments About 20 per cent of adult Cana dians held GICs and term deposits in 26 per cent in and per cent in T Bills and government and cor porate bonds represented only six per cent of the number in 1983 and nine per cent in both 1986 and TBills and government and cor porate bonds represented only six per cent of the number in and nine per cent in both 1986 and Stocks held either directly or in directly through and mutual funds were owned by per cent of adult Canadians in per cent and 23 per cent for 1986 and respectively One of the reasons for the conti nuing popularity of Canada Sav ings Bonds over the vears aside from earning an attractive return is their absolute security said Cunliffe Investors know thai regardless of what happens with in rest rates or the stock market thur CSB in vestment will aways be safe and that they can cash in their bonds any time and get all their money out with accrued interest he explained Interestingly said Mr Cunliffe safety and stability ranked high with investors in the study Since 1986 the study noted the emphasis placed on safety and security has increased among all groups Not surprisingly the importance of safety and stability nses with ages and declines with income When RECESSION hits you need all the help you can get When recession hits and business goes flat the temptation is to cut costs especially your company s investment in such intangibles as advertising But studies show cutting back on advertising is a mistake During the 1981 82 recession companies that didn reduce their advertising had a much greater sales growth during and after the recession than firms that cut back So says a study by Hill of New York which com pared the sales performance of 600 companies between 1980 and 1985 Firms that maintained or increased levels of advertising during the last recession saw an average sales increase over the five years of But companies that reduced their advertising or stopped it altogether saw their sales in crease just 9 during that time Now more than ever it is important that we learn the lessons of the past Your advertising budget may be the most important key to your firm s prosperity maybe even its sur Give yourself all the help you can Invest in advertising CALL Dan Craig Jen Kim or Stacie at 8772201 the HERALD Home Newspaper of Halton Hills Established 1 CPP during the last years of your working life Do you know what inflation will do to your retirement needs Do you know that inflation has averaged more than over the last years If your present annual income is this is what you will need just to stay even RETURN YEARS INFI Sill 134 ln25cjnt If your employer has a pension plan and you are a member do you know that the pension available to you at retirement is capped at a maximum level That level is 60025 and it has been at that amount since and it not indexed It can be in up to that amount but not over if your plan provides index ing If the maximum has been in it would be over now The maximum of is only available if you have been at your employer for 35 years 43 if you have been there 25 years and for years For the average person in vesting your allowable maximum in is a good way to go It gives you an immediate ax ing and allows your money to grow free of tax until you take it out Unless your investments beat inflation there is no real growth High growth enables the magic of compounding to work best to generate large sums of money over time Every addi tional per cent makes a dif ference If your annual investment is 500 this is what it will grow to SO 156 16 Ultimately you have two choices when it comes to in vesting You can go it alone or you can call on professional management Its a choice that has nothing to do with the types investments you make your financial resources you can in vest as little as per month or your station in life You should ask yourself Year in year out over the long haul can I hope to do as well as the professionals They spend as many hours or more per week doing their job as you can spend at yours All of the evidence suggests that you cant So what to do Instead of blindly following the crowd why not take advantage of an independent financial ad visor who is not married to any one financial institution and can give you the facts on all of the many ways to make your savings grow Try to find an independent ad visor who will work free They will do your planning for you in the hope of selling some of their products They can explain some of the changing tax regulations Maybe professional manage ment or your savings makes good sense For a free chart on how a mutual fund has performed com to a fixed 10 interest in oer the last contact Peter Fagan Georgetown or phone Paul J Rockel Is the author of Ihe best seller Wit I Iniest in Mutual Funds and President of Regal Capital Planners Ltd Simon CHARTERED ACCOUNTANT i Phone 416877 i 132 Mam Street South g Georgetown Ontario 5 J 8770109 FOR ASSISTANCE WITH ALL TYPES OF MORTGAGE FINANCING PRIME RESIDENTIAL CONVENTIONAL Months Years 12875 1325 To Residential Commercial Cal DAVE 8734991 Say I saw it in The Herald WELCOME TO HALTON HILLS To Advertise In This Space Call fcOa5LL ARMSTRONG AVI MM FOR AIL TOUR PLUMBING NEEDS All The Local Newt In the HERALD PIZZERIA SUBS I 00 off small or medium and large and umbo pmas PICK UP ONLY and Diane I pose for fa mi l pit lure with heir Mi their liiiim Sim lilhwicks annul hen in St pit from tail in he pact mil side or Hi raid photo Courtesy of these fine businesses and Hostesses Cathy Dooley Debbie Butler 8778591