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MONEY TA1K Wednesday February 12 Page II A reverse mortgage is excellent estate planning IN Herald Special We in the financial planning profession consider estate an important clement of the final planning Why To pro tect the estate as much as possible from the ravages of the tax bite so the heirs get the in tended due There are people however whose attitude towards estate planning is Who cares we re going to spend our children s in A Reverse Mortgage will allow more spending of the inheritance Todays retirees will live longer than their parents or grandparents possibly years of retirement living Income must come from somewhere and last this extended length of lime A Reverse Mortgage solves the future income problem There are people who would Laborsponsored investment fund participating in government program Canada only national labor sponsored investment fund is the first to participate in a new On government program pro viding attractive tax credits for investment in the kind of ing growth companies that can help stimulate the provincial economy New Ontario tax legislation now provides a 20 per cent pro vincial tax credit matching the 20 per cent federal tax credit already in place for investments of up to each year in a laborsponsored investment fund The provincial tax credits are retroactive to shares purchased after November 1991 In addition Working Ventures shares are eligible and an individual who purchases these shares may transfer them to an and claim a deduction from taxable income Investors in Working Ventures gain an advantage of over other RRSPs on an investment of It you re in a 11 I per cent marginal tax bracket and you only have to earn over 785 this province to be in this bracket you will receive tax sav ings of 50 for your deduction plus from the federal government and from the Province of Ontario in tax credits That means a 3 contribution in Working Ventures will result in total tax savings of 50 for a net cost of only so The twoyear old Working Ven Canadian Fund sponsored How do you save income tax with an in one the last available to Canadians The milium of money it during is deducted from the thai you earner tilt si you ire required pay less The rules however m i eitiHrihuie In i presenile limn Mow dots this work For it your intonie his is SMI HH and you eoiilnbuie to your die of lax you mil will be on r idler than hi ire eligible Inr my oilier there any other ad- to an RRSP Yes All he money tamed by jour investment in in sueli is interest dividends ind mis is mil so Ion as it is reinvested in your RRSP These will be only when wiilutriwiiuru the RRPs b Itrlgiltetoulurd Will the lax si Yes Tile will when he This cniiull be paid It s lower II people both pi in e In prescribed limit Your ir own plan mil ant li I MONEY CONCEPTS FINANCIAL PLANNING CENTRE DONT BE CAUGHT IJITHE RRSP STAMPEDE Its easy to fall the trap of Investing in an RRSP any RRSP that available at the absolute last minute Because of taxation rules you have until February 29 to make your tax deductible investment for 1 99 But if you wait until then chances are you may make the wrong investment decision Because you II invest based on your need to act quickly to make the deadline not on the true value of thB investment product IS THERE ANOTHER ALTERNATIVE At Money Concepts as part of a FREE NO OBLIGATION individual retirement plan analysis we can show you how to get the maximum return for your RRSP dollar Because we are independent financial planners we have access to the whole RRSP market What ever you think is the right RRSP investment for you we have the highest rates available 348 Guelph Street Georgetown 8731877 by the Canadian Federation of Labour is the world First na labour sponsored invest fund All money invested in the fund which is managed by a Toronto- based team of profes sionals will be reinvested in pro mising growth oriented small and medium sized Canadian businesses Invest men Is in the small business sector of the economy traditionally offer the potential for higher rates of return in return for acceptance of some additional risk For more information call Ron Bogg or Julie Makepeace Working Ventures Canadian Fund like to have control of how the in is distributed or would like to help their children now when the help is needed most A Reverse Mortgage makes it possible to distribute the wealth There are cases where a style of living will change through the retirement years For example an avid gardener might have to move to an apartment and this would be a devastating loss of pleasurable occupation A Reverse Mortgage would prevent the forced change of residence and lifestyle A widow s income can suddenly be depleted when her husband company pension stops on his death A Reverse Mortgage recreates the lost income In fact there arc many lions where a Reverse Mortgage is the solution to the problem How does it work First you must look at a house as a box of cash The idea is to release the cash to the owners while they still live in it rather than when they sell A portion of the current praised value of the home is used to put a mortgage on the house That right after sweating all those years to pay off the mor tgage another is being put on But this is no ordinary mortgage This one is for life and there are no mortgage payments to be made So how does the mortgage get repaid Whenever the last surviving homeowner can literally no longer live in he house either through deterioration of health or death the house is sold The pro of the sale pay off the and all the accrued payments If there is money left over it goes to the estate for distribution to the heirs If there is not enough from the sale to pay off the mor tgage debt the company loses There is no recourse to recover the difference Where does the retirement in come come from The mortgage loan money is used to purchase a life annuity the whole spectrum of annuity options is available Because borrowed money from the mortgage is invested to provide the annuity the resul income is tax free under cur rent tax laws Reverse Mortgages have been available in England and the United States for about and years respectively The concept is only a few years old in Canada and they have been only available in British Columbia and Ontario up until now The popularity of the product is growing by leaps and bounds In the foreseeable future it will become one of the main income sources for retirees as govern ment pension plans waiver with their support and people will be forced to search for substitute in come sources to maintain their higher and more active dards of living Reverse Mortgages are the product of thefuture This article as b Concepts Financial Plan Centres Georgetown For further Information telephone RSP 973 Rates Subject To Change Without Notice Stripped Bonds Government Guaranteed Flexible Liquid For Information Call ARTHUR COOK DOMINION SECURITIES Member of the Royal Bank Group