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18 - PORT PERRY STAR - Tuesday, January 25,1994 "Scugog's Community Newspaper of Choice" New RRSPs help TIER IN SE en ri Ear Ea What's New? At CIBC we're leading the way in offering you new RRSP investment products to help you make the most of your retire- ment savings. Ask about our: SPECIAL 17 MTH FLEXI- RATE RRSP; CIBC TAX WAIV- ER APPLICATION IN CON- JUNCTION WITH RRSP MONTHLY SAVINGS PLAN; CiBC RRSP PORTFOLIO PLANNER; CIBCINVESTORS EDGE MUTUAL FUND RRSP FOREIGN CONTENT PLAN (OFFERED BY CIBC SECURI- TIES INC.) As of 1994 you can hold as much as 20 per cent of your RRSP Portfolio in foreign in Your Future" from the present this coupon to CIBC, 145 Queen St, Port Perry, Ontario The guidebook will be available while quantities last. = ------ { Retirement Security? How much money will you need for a satisfying retirement? How can you be certain you will have enough? What steps should you be taking now to guarantee your retirement income? For your free copy of CIBC's guidebook "Investing Strategies for Success series, property. We'll help you meet your RRSP investment goals so you can retire financially se- cure. Where To Invest: RRSP or Mortgage? Many people ask themselves whether it makes more sense to contribute to your retirement plan each year or use the cash to reduce the principal on your mortgage loan. There's no easy answer. Factors such as your age, the length of time remain- 'ng on the mortgage, the mort- gage interest rate, and the pro- jected return in your RRSP all enter into the calculation. The It requires planning! Cet us working for you! <> CIBC ---------- Ashton & Associates L Accounting Services ---- SMALL BUSINESS SPECIALIST Computerized or Manual Bookkeeping, Accounting & Tax Services Heather Ashton, I.C.I.A. 190 Medd Road, R.R.1, Port Perry LIL 1B2 L---- Telephone: (905) 852-3273 Fax: (905) 852-3199 ---- Financial Planning RRSP Advice Tax Preparation GST BDO DUNWOODY WARD MALLETTE Chartered Accountants Payroll services including T4's, T5's, WCB, EHT Accounting for small businesses New business planning & start up If we can be of assistance please drop by our office or give us a call. 38 Toronto St. N. Uxbridge 852-9714 male most of retirement better alternative depends on your particular circumstances. One idea worth considering is to make your full RRSP contri- bution and then use the tax re- fund generated to reduce the mortgage. This allows you to build two types of assets instead of just one: the equity in your home, and the capital in your RRSP. Rollovers From Retiring Allowances If you leave a job, voluntarily or otherwise, you may receive a lump-sum payment or "retiring allowance" when you go. If the income qualifies, you can roll partofit directly into an RRSP. And this may result in sizeable tax savings. The gov- ernment uses a special formula to determine how much you can shelter in this way. You're al- lowed $2,000 for each year or part-year you were with the or- Bato, plus an extra 1,600 for each year or part- year prior to 1989 for which you aren't entitled to any pension benefits. Even if you've been with the organization only a rel- atively short time, the amount Waiting It is estimated from recent surveys that one in three Cana- dians plan to contribute to an RRSP this year. This is unfortu-. nate, as RRSPs not only allow you to put a healthy amount away for retirement, but also generates an immediate tax savings. It is widely believed that in future years our government will not have the financial capa- bility to continue to pay Old Age Pensions. When this happens, what will many retiring Cana- dians do to maintain an ade- quate living standard? Citizens who have not made financial provision for their retirement will find the "Golden Years" somewhat tarnished. To many Canadians, the phrases "Retirement Planning" and "Tax Planning" sound very complex. In fact they should not be. The cornerstone of "Retire- ment Planning" is capitalizing on your RRSP savings. Your you can roll into your RRSP is considerable. For example, sup- pose you joined your employer in late 1987. At the beginning of 1993, you're laid off. You have no pension benefits. In this case, you can roll over $2,000 for cach year or part-year from 1987 to 1993 (a total of $14,000), plus an additional $1,500 for each of 1987 and 1988. That's $17,000 you can put directly into your RRSP, cutting your tax bill in the pro- Cost. Note that any company or government pension entitle- ments, 1cceived either as a lump sum or periodically, are not eligible for this treatment. Be careful, though. Rolling over a large retiring allowance into an RRSP may make you liable for the Alternative Minimum Tax. Consult a tax adviser be- fore acting; 1t may be to your ad- vantage to ask your employer to spread the payment over two years or to delay it until after you've actually stopped work. Investing In Your Future The RRSF may well be the single most powerful wealth- may be Banker or Financial Advisor can explain how simple this really is. By deferring your RRSP con- tributions you are only putting off the opportunity of a comfort- able retirement. For many, re- tirement can come a lot earlier than planned, if indeed they have planned at all. Following is a check list to start you on your RRSP plan- ning. 1. Don't procrastinate - If you have not contributed for 1993, do it now. The sooner you start, the more your money will com- pound. 2. If you have the funds, pur- chase your 1994 RRSP now. Why lose a years compounding? If you do not have the cash, con- sider setting up an automatic transfer from your bank ac- count. This can be arranged ei- ther monthly or weekly. This makes saving for your retire- ment less painful than having GUARANTEED INVESTMENT CERTIFICATES e ANNUAL RATES » Rates subject to change without notice SCUGOG FINANCIAL SERVICES A DIVISION OF CRESSBROOK FINANCIAL PLANNING LTD. 250 QUEEN STREET - PORT PERRY "Serving Scugog for Over 15 Years" PHONE 985-3832 building tool available to Cana- dians. 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 sav- ings. Second, it lets you benefit from the tax-sheltered com- pounding of income earned within the plan, over many years. If you're like many Cana- dians, you've already taken steps to look after your financial future by establishing one or more RRSPs. But you may be troubled by some nagging ques- tions. Do I know all the rules? Am I making the most of my al- lowable contributions? Am I managing my RRSP invest- ments as effectively as passible? Your financial institution, or fi- nancial advisor can answer many of your questions. Assis- tance is yours for the asking. Courtesy of Krista Murray, Personal Banking Manager, CIBC, Port Perry too late to write that one "big" cheque _annually. 3. Contribute as much as you are allowed. For 1993 you can contribute 18 per cent of the previous years earned income, less Pension Adjustment, to a maximum of $12,500. The more you contribute today, the more your retirement savings will be in the future. 4. If you have not contributed your maximum in previous years and you have funds avail- able, utilize the "Carry For- ward" provision to capitalize on the compounding features available through RRSP invest- ing. If you are uncertain of your "contribution limit," you should refer to your Notice of Assess- ment received from Revenue Canada which you would have received following submission of your 1992 tax return. 5. If you don't have cash avail- able, consider taking out a term loan which you can repay from proceeds of your tax refund. Most banks offer preferred rates for RRSP loans and can provide repayment ~ alterna- tives. 6. If your spouse's retirement income will be less than your own, talk to your RRSP plan holder about the advantages of income splitting by opening a "Spousal" RRSP. This will mini- mize your tax upon retirement. The most important point to remember is that if you are not maximizing your RRSP contri- bution annually, you are paying more taxes than you have to, and you are robbing you and your spouse of a comfortable re- tirement. Courtesyof Will Davidson, Laurentian Bank of Canada oe Rt TENE SQUID A INT a