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MONEY TALK Wednesday February 13 1991 Page By VIC PARSON Ottawa Bureau Thomson News Service OTTAWA In 1991 if the past is any guide Canadians will sharp ly increase the amount of money they pour into registered retire ment savings plans A recent Statistics Canada study shows that have become a more significant part of postretirement income than the governmentadministered Canada and Quebec Pension Plans It estimates RRSPs now total about billion compared with pension entitlements of about billion And with major changes to the RRSP legislation in effect for the tax year taxpayers are ex pected to dump more of their sav ings than ever before into the plans In the years of their ex istence have grown from a program employed by only a few wealthy taxpayers to a device regularly used by millions of Canadians In 1968 the first year data on the number of contributors was collected one in taxfilers made contributions By 1987 more than one in five tax- filers participated The total amount of money contributed had risen sixtyfold Some contributors may see RRSPs primarily as a way of reducing personal income tax levies Others may view them RRSPs have existed for 33 years chiefly as a ay of establishing retirement nesteggs Whatever the case they have become im mensely popular IMPRESSIVE GROWTH Hubert a StatsCan analyst who did the RRSP study for the federal agencys publica tion Perspectives on Labor and Income sees a number of reasons for what he calls the im pressive growth There may be greater awareness now of the need to save for the future he suggests Taxpayers could be looking in creasingly to tax shelters And the annual RRSP campaigns by financial institutions alert customers to opportunities More easily measured are other factors First more women have jobs outside the home and particularly in the case of two- income families are making contributions In 39 per cent of taxfilers who made contributions were women and they accounted for about onethird of the dollar value of all payments A decade earlier only per cent of con tributors were women and their payments were only onefifth of the total Moreover of taxfilers in 1987 with incomes of or less women were considerably more likely to make contributions to Above the 50000 threshold this situation revers- DONT Basket Most investment experts agree that diversification is the key to a prudent investment portfolio As part of that diver sification RRSP monies should be placed in prime income producing real estate Properties such as shopping centres and office buildings offer security of annual cash flow in addition to substantial capital appreciation potential Now anyone who can invest 500 in an can diversify their portfolio to include quality properties that arc currently available at bargain basement prices SOLID GROUND INVESTMENT Jack Pignatell 8774579 Associate Broker For THE INVESTMENT CENTRE MEMBER OF THE GROUP impact comes from the raising of the ceiling on allowable taxfree contributions which especially Ottawa benefited those with no employer- Bureau sponsored pension plans In 1972 when the maximum by RRSP contribution rose to lor 20 per cent of income Vic Parsons whichever is less from payments doubled Smaller Service though still significant increases were registered in and 1986 when the ceilings were raised again As well the age group which has historically had the highest contribution and par ticipation rates will be swelling in the 1990s By the number of Canadians in the age group will to million from million a decade earlier CEILING RAISED But perhaps the most telling For the 1991 tax year the law will allow persons withou cor porate pension plans to pay the lesser of 18 per cent of income or into Thats a sharp rise from the current celling That celling will rise to and will be indexed an nually in 1996 and thereafter to the average annual rise in wages Many with company pensions or deferred profitsharing plans will be able to make larger con tributions too although the allowable payments will be limited by a pension adjust ment based on employee and employer contributions to their private plans Taxpayers who were unable to make their full allowable RRSP payments in one year will be able to carry that entitlement forward for up to seven years Underex- isting rules if you dont make a payment by March its tough luck RRSPs seem destined more than ever to become a prime source of retirement income RRSP Check with State Farm Competitive Rates Guaranteed Lifetime Income Waiver of Premium for Disability Option Good Neighbor Service Visit Your Local Good Neighbor LORA GREENE Main Street N Georgetown 8731615 LORA GREEN Agent STATE FARM INSURANCE Like a good neighbor Stale Farm is there State Farm lite Insurance Company Canadian Head Scarborough Ontario