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WH1TBY FREE PRESS, WEDeEýSDAY, FEBRUAR.Y'.3, 19g8, ýAG nvestment tlisfor aila Anyone planning to contribute to a registered retiremnent.savings plan should.:do so.as,,early as possible, recommends .Donald Dasti, branch managerý of T.P. & Associates of Oshawa.. For example, contributions atý the, beginning of the year, rather than at. deadline, will eventually mean more capital in the retirement savings plan as well as no wait for the tax receipt. - -Dasti also suggests that potential investors in RRSP's obtain a finani- cial advisor who can'best outline how and what investment, can be, made bo adapt to one's partieular financial situation.' Thýs' is especially true for anyone who may want to borrow funds to contribute to.,an RRSP,,recommended for somne, but~n ot> for others. Dasti says anyonemaking an RRSP contribution should also be sure that a beneficiary is named *(for example, spouse to, spouse) which will ensure an.,easy transfer and no adverse tax consequences. Although the money market is now volatile after the stock market deeline, he notes that it's a good op- *portunity for younger people to in- vest. "«There's buys out there," he says.> Mutual funds. have. become popular, he says, because of the returns and also because each has a trustee and audit system that provides reassurance to the in- vestor. "So nobody is running down to the Caymen islands, " says Dasti. He suggests that anyone in- terested in mutual funids stick witb those companies that are well known and have a Proven traek Borrow on home 's equity, andsaàve. 283-46 By Harold Chmara, CA (NC- If you have built up sonne equity in your home ovei the pasl few years, then you have access bo somne of the cheapest money arounid. You can borrow cheap money through wha's kn6wn as a home equity loan - which is fast becoming a hot means of borrowing Ihese days, as more and More homeowners do il. But what exactly is a home equity loan? Although technically a second mortgage, il is acîually a line of credit (borrowing power) given 10 you on the strenglh of the present equily of your ho me. And you can gel up'to 75 per cent of the appraised value of your home - less, of course, any outsland- ing mortgage balance. Take an ex- ample: Suvpose Vour home is worth record. Such comfpanies,- he points out, have "well-seasoned" moneéy managers. "There's a .degree of risk in every, mutuàl fund," says Dasti. Anyone "close to. retirernent may flot want less risk in investment,, 50 Dasti suggests a more balanced Jund that.might include treasurY. bills,. And anyone seeking to 'place their funds in guaranteed inconie certificates' (GIC's),. should be "shopping arouind, " saysD!asti. Some trust, companies are now offering- incentives of- 1/4, to ½/ per cent above.,normal interest rates, he says of this.type of investment which he describes as one option for anyone at who turns 71. Another option at retirement, and the one recommended by Dasti,, ig the registered retrement inc.ome fund (RRIF). Afina ncial plan, that should start when one is young,, will realize benefits in the -long',termi while allowing a "-comfort zone," says Dasti. Canad a's last gréea break, on taxes By Carol-Ann Simon, CA (NC- Do your part b9 actively pre- paring for your own retirement and the governmenl will do ils part by saving you money îhrough lax breaks. Basically, RRSP. invesîments mir- ror non-RRSP invesîmenîs - you can have stocks or bonds, mutual funds, termn deposits or Guaranteed Invesîment Certificates in them. 0f course, the advanîages 10 holding these investrmenîs inside an RRSP are thal eamings build up much faster be- cause they accumulate lax freý and the initial contribution is tax deduct- ible. The govemment is committed 10 zxpanding the role of 'individual, Canadians in planning for Iheir retire- ment and 10 do Ihal il is changing the way RRSP's will operate in future. For 1987, the maximum contribu- tion, for those who are not members of a company- pension or deferred profil sharing plan, is $7,500 or 20 per cent of earned income. For those who are members of company plans, the maximum is $3,500 or 20 per cent of eamed income. You, have, unt.il the, end of February 1988 10 make your contribution. There are higher conîri- 'bution limits coming. iIn ils White Paper on Tax reform, iJune, the government delayed, by one year the original timetable*for im- plementation of the higher limits. The resull: Next year's contribution limnit will be held 10 the 1987 level of $7,500 rather than the original ly sug- gested $9,500. The maximum contri- bution level of $15,500 will be phased in by 1995 raîher than the original target date of 199 1. Starting in 1989, taxpayers will be able to carry forward for seven years any unused contributions fromn previ- ous years. This feature will make contributions more flexible -, if you are unable 10 make the full contribu- tion one year, you'll be able to "save" the unused portion and carry il for- ward 10 add on 10 the maximum con- AIM~yYCARE tribution in following years. Tax reform, which will bring most people lower -personal tax rates, in 1988, also has an impact on your RRSP planning. Lower taxes starting in 1988 means any RRSP contribu- tions you make in 1987 will save you proportionately more tax dollars be- cause of the higher tax levels in effect thiý year- a good reason to contribute 'the maximum. Also, RRSP with- drawals will be taxed at lower rates in 1988 than in 1987; if you are planning 10, withdraw from your RRSP, it -is; best to.hold off until next year.. Finally, take advantage of spousal RRSP's. The govemment plans to phase these out - so you should take advantage of the 'm while you can. If oneý spouse does not work, or has a lower income than the other, it makes good sense 10 have thé high income spouse contribute to- that spouse's plan. The contribution limit remains the same, but having two plans generates îwo pools of capital which will trans- late ýinto two annuities on retirement and prolvide two sources of private pension income - both of which will qualify for the $ 1,000 pension income deduction. (Note - under Tax Re- formn, the pension deduction is to be replaced by a tax credit of $170.) This is a method of income splitting, since the annuity received from the spousal plan wiIl be taxed ai the lower income spouse's lower rates. One word of caution. The funds placed in a spnuse's plan must remain in that plan for at least three years. If the funds are taken out before that, the withdrawal will be attributed back to the contributing spouse as inc.ome - a *nd he or she wil I have to pay taxes.on it. Alter three years, the funds are con- sidered to belong 10 the low-income spouse and he or she can wîhdraw -them without having the income at- tributed back t0 the higher income contributing spouse. For CA's adv ice on TV - see Your Wealth, available on broadcasî chan- nels in Ontario and on satellite across Canada, or see Mjoney in the Bank, on your community cable channel. Moneycare Is general fînanclal ad- vice by Canada's chartered ac- countants. Carol-Ann Simon Is wlth Price Waterhouse, Chartered Accountants. 2n343 A NATIONAL TRUST RRSc-ýP S S A Nttinal Victor riand <. rv Inlttsi . p.Ir Looking afrer your best interests. WHITBY -353 Brock St. S. 666-1800 &'308 Dundas Si. W. 668-9324 AJAX - Hamwood Place Mail S. 683-7344 OSHAWA -32 Simcoe St. S. 723-5207 PICKERING -Pickering Super Centre. 831-8601, T T Natkmallhîst. Weinake ui yrRRPi m Tired of~ the. ps and downs-of certain National Trust williguarantee aretumn for you, as well as give you an imimediate tax break. (We'll give you a tax receipt on the spot 50 that you can dlaim your deferral as quickly as possible.) We'l1 also give you the information you need so that you know the decisions you make today wiIl be the right ones for your future. Ask us also about oui RRIF oiRegistered Retirement Income Fund. t lets you manage your RRSP funds effectivel after you.retire, Consolidate Your RRSPS' With Us At a time when a lot of important decisions have to be made, your easiest one will be to corne to National Trust for ail your RRSP needs. As a company soon to celebrate our l5Oth anniversary, we're firmly éstablished. Yet we're very responsie ayur çhanging needs, such as staying 'open for business extra long hours; Most branches are open-8 a.mýitol.. 8 p.m. Monday through friday, with convenient hours on Saturday. Loans at Prime Lack of cash doesn't mean y ou can't take advantage of the full tax deferal you deserve. A National Trust Loan at Prime will make your RRSP goals within easy reach. Drop in to your nearest National Trust Branch soon for quick, efficient service. You will achieve the peace of mind that cornes when you know your future is secure. We guarantee it. AA