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= wy 14 -- Scugog Citizen ~ Tuesday, February 21, 1995 GE T TAXx Tiprs 1) Contribute as much and as early as you can: Time, money and tax savings are a powerful combination. Here's proof: A 25- year old investor who contributes $1,000 per year to an RRSP earning 12% will have $859,142 at age 65 to show for a total investment of only $40,000. Doubling the investment to $2,000 annually results in a nest egg of $1,718,285. 2) Develop a fully balanced portfolio: Consider the full range of investments available, along with the risk and return ratio of each. With the help of your Financial Advisor, develop a balanced, diversified portfolio of RRSP funds. 3) Don't do "what everybody else does": Remember - your needs are unique. Many Canadians make uniformed' investment decisions that aren't Important Roger B. CHARTERED ACCOUNTANT 175 NORTH ST., PORT PERRY worthy of emulation. Do what is right for you on the strength of professional advice. : 4) Considewn a spousal RRSP: You get the tax savings but the money compounds tax-free in your husband's or wife's name for retirement. This could mean two lower tax brackets at retirement instead of one higher one. You can make spousal contributions even if you contribute to your own plan, but the total amount you are allowed to deduct from your income must not exceed your own maximum ° allowable contribution. Many wise couples choose to build two RRSPs of equal value for retirement to minimize their combined tax liability. 5) Take advantage of the foreign content allowance: Many Canadians are not aware that recent changes to the Income Moase TAX RETURN PREPARATION "Personal, Confidential Service" BUS : 985-8893 FAX : 985-4944 RES : 985-7225 Tax Act allows-you to invest up to 18% of your RRSP's book value in certain non-Canadian securities. [itesnsponag investing can build greate stability through diversification, and offers other growth opportunities. For the 1994 tax year, foreign content increases to 20% of your RRSP's book value. . * 6) Consolidate your RRSP holdings for easier record keeping - and better growth: There's no limit to the number of RRSPs you can own. But, review your holdings periodically to make sure you're getting the most from each. And remember, when you terminate your RRSP at retirement, it's easier to move your savings into a Registered Retirement Income Fund from one or two sources rather than several. 7) As a last resort, consider borrowing to contribute: With _ today's interest rates, it may make sense to borrow money to invest in an RRSP, as long as the RRSP is earning a good rate of return. Although borrowing costs are non-deductible, you can pay off part of your debt with your tax refund. Plus you'll have a bigger nest egg for retirement. 8) Ask about a pre-authorized chequing plan from Midland Walwyn: It's a no-cost way to contribute to a Midland Walwyn RRSP from your bank or trust company, and it allows you to take full advantage of the. benefits of dollar cost averaging through regular contributions. 9) Investigate a group RRSP at work: Employees benefit from a Group RRSP with its instant tax savings through payroll deductions. Employers incur no burden of paperwork or costs. 10) Understand over- contribution rules: All RRSP holders have a lifetime over- RRSP strategies and tactics contribution allowance of $8,000. Beyond that, a penalty of 1% per month is payable on the excess contribution. Generally speaking, unless retirement is at least 15 years away, it doesn't make sense to deliberately over- every year you worked before: 1989 (during which your employer provided no pension benefits). So an RRSP can save and make you money, even under less than ideal contribute the $8,000 amount. 11) Rely on professional advice: An independent investment fund dealer or Financial Advisor can help you set your goals and determine the right choice for your RRSP - one that fits your P ject 12) Avoid taking a short-term view: Remember, RRSPs are intended to be long-term investments. 13) Make the most of a golden handshake: Tax laws allow you to transfer to an RRSP, on a tax- sheltered basis, up to $2,000 a year in retirement allowances for each year you've worked for your employer - plus $1,500 a year for Try to make sure that any retirement allowance is paid as a single lump sum. Otherwise, the money could be treated as taxable salary income. 14) Investigate a RRIF: By the end of the year you turn 71, you must de-register your RRSP. But you may draw income much earlier. Even if you don't need the money, you should begin looking at de-registration options at age 65 or earlier. For many Canadians, rolling an RRSP into a Registered Retirement Income Fund (RRIF) is the preferred solution. 15) Get started today! (Mike Janacek is a Financial Advisor with Midland Walwyn) Secure your future today The RRSP may well be the single most powerful wealth- building tool available to Canadians. The kind of future you want, of course, is up to you. But there is no question that the key to making it all happen is a sound savings and investment program. As the cornerstone of your program, the RRSP offers two crucial advantages. First, it gives you immediate tax savings. Second, it lets you benefit from the tax sheltered compounding of income earned within the plan, over many years. If you're like many Canadians, you've already taken steps to look after your financial future by establishing one or more RRSP's. However, you may be troubled by some nagging Van Camp & Keller CHARTERED ACCOUNTANTS WB Income tax planning and return preparation B Personal tax returns electronically filed 8 Financial, estate and retirement planning PERSONAL TAX RETURNS ARE BEING PROCESSED NOW! "Office Hours until April 30th, 1995: Monday to Friday 8 to 6; Saturday 9 to 1 204 Casimir St., Port Perry, Ontario L9L 1B7 TELEPHONE : (905) 985-9725 TOLL FREE : 1-800-215-3852 questions: Do I know all the rules? Am I making the most of my allowable contributions? Am I managing my RRSP investments as effectively as possible? At CIBC we'll work through your options with you to develop the best: retirement portfolio to achieve your goals. Talk to one of our Personal Bankers about our wide range of RRSP GICs, 15 Domestic and International No-load Mutual Funds, CIBC Investor's Edge Self-Directed RRSPs, and 'specialized retirement and investment services from Wood Gundy private client investments and CIBC trust. To see how you can secure your future with the right retirement plan, give us a call at CIBC, Port Perry 985-4444. Can we peak your interest? 9 Y%* GuaRANTEED INVESTMENT CERTIFICATES 1 year 8.10% 2 year 8.55% BANCA COMMERCIELE | BANCA COMMERCIELE ITALIANA of CANADA | ITALIANA of CANADA 3 year 8.70% 5 year 9.00% BANCA COMMERCIELE | BANCA COMMERCIELE ITALIANA of CANADA | ITALIANA of CANADA For more information call : MIKE JANACEK, Financial Advisor VALERIE LANK, Financial Advisor Assistant (905) 576-1726 1-800-661-0243 MIDLAND a 5 AR YR of WALWYN BLUE CHIP THINKING™ * Rates as of February 20th, 1995. Subject to change and held to maturity. BLUE CHIP THINKING is a trademark of Midland Walwyn. Capital Inc.