Loading...
HomeMy WebLinkAboutThe Citizen, 2009-02-12, Page 11By Keith Damsell (NC) When it comes to money, the best advice is to rely on the experts. A good investment advisor can make sense of the volatile stock markets and help you meet your long term goals. But how do you find the right advisor for you? Finding an investment advisor that meets your needs takes a little homework, said Liz Lunney, a director of portfolio management. I urge everyone to take the time and do it right. It’s one of the most important financial relationships you will ever have. Here are five quick and easy tips that will help you find the right advisor: 1. Research. Review your investing history, assets, goals and risk tolerance. This research will better prepare you for interviews with prospective advisors. 2. Referrals. Ask friends, family and colleagues for their insight. How and why did they choose their advisor? A good referral is a great place to start. 3. Interviews. Take the time to interview several candidates. Find out about their education, experience, accreditation and business practices. How many clients do they work with? Will you receive the personal attention you need? Answers to these questions will give you peace of mind, said Ms. Lunney. 4. References. We check references with babysitters and prospective employees, why not with an investment advisor? Ask to speak with current clients. Do they understand their portfolio and its performance? Can they reach the advisor easily? 5. Compensation. A good advisor will be open with you and detail exactly how they are compensated. In general, advisors are paid for advice through commissions, fees or a combination of these methods. THE CITIZEN, THURSDAY, FEBRUARY 12, 2009. PAGE 11. (NC) Thanks to new tax rules introduced in 2006, some Canadian taxpayers on a pension can now take advantage of income splitting. The government estimates that allowing pension income splitting has provided more than $1 billion in tax relief for older Canadians. “For qualifying taxpayers, splitting their pension income means hundreds or even thousands of dollars of tax savings,” says Cleo Hamel, a senior tax analyst. But it is only qualifying pension income, so not everyone can split their income. Taxpayers with eligible pension income can split up to 50 per cent with a spouse or common-law partner. When there is one spouse who has very little income, the tax savings are substantial. “You need to meet three requirements to split income: the government considers you a pensioner, you have a spouse or partner who qualifies to receive the split, and you have the right kind of pension income,” says Hamel. Most periodic pensions and superannuation payments, including foreign pensions (with the exception of income from a U.S. Individual Retirement Account), qualify for splitting. If you are 65 or older at the end of the year, it also includes annuities and payments from a Registered Retirement Income Fund (RRIF). If you are under 65, these types of payments will also qualify if you are receiving them due to the death of a previous spouse or common-law partner. The list does not include Old Age Security payments, Canada Pension Plan (CPP) benefits, retiring allowances, death benefits or lump sum withdrawals from your RRSP. You may be able to split your CPP with a spouse or common-law partner through the Human Resources and Social Development Canada. “If you want to take advantage of the pension-income-splitting provisions, the Canada Revenue Agency (CRA) will require both you and your spouse or common-law partner to file new Form T1032, Joint Election to Split Pension Income with your 2007 income tax return,” says Hamel. 5 tips to finding an advisor (NC) Contributing to your Registered Retirement Savings Account (RRSP) means tax-deferred savings today for money needed tomorrow. Even in tough economic times, you can maximize your savings with these dos and don’ts: 1. Don’t delay in starting to contribute to your RRSP. Start contributing as much as you can afford, as soon as you can. Even modest, regular contributions to your RRSP can build over the years into a significant retirement nest egg. 2. Do maximize your contribution. Your annual RRSP contribution can greatly reduce the amount of income tax you pay in that year and the money you put away can have years of tax-deferred growth potential. If you are worried that you do not have enough money to make your maximum contribution this year, consider borrowing money to contribute to your RRSP and then paying back your loan with your tax- refund. 3. Do speak with an expert to get retirement advice for your unique situation. 4. Do contribute to a spousal RRSP. Spousal plans can be set up to split income for the purpose of saving on taxes in the retirement years. The purpose of a spousal RRSP is to shift RRSP assets to the lower income earner, so that at retirement the income from the plan is taxed at a lower marginal rate, resulting in tax savings. If on a pension, consider splitting incomeFinancial 9 Rattenbury St. E., Clinton, ON N0M 1L0 Ph.: 519-482-9924 ~ 1-888-235-9260 Res.: 519-524-9260 Check out RRSP and RRIF plans designed to meet your needs. GIC, Mutual Funds, LSIF, Seg. Funds Invest in your future today! RRSP DEADLINE: MARCH 2, 2009 Who will look after your financial obligations if you become injured or ill? See Lawrence for a free consultation. 406 Queen Street,Blyth,Ontario Join us Monday or Wednesday evening at 7:30 p.m. for our FREE weekly Financial Planning session. Our upcoming topic: MAXIMIZE YOUR TAX DEDUCTION! Reserve your seat today! 519-523-9000 or cfp@machan.ca Brian Machan,CFP William Chan,CFP “Best Solutions in Financial Planning” (NC) The Canada Revenue Agency has a service called My Account that allows taxpayers to manage their profile on-line, including making changes in the number of children in their care and their banking information. You can even apply for valuable tax benefits such as the Canada Child Tax Benefit and Universal Child Care Benefit. To find out more about My Account, go to www.cra.gc.ca/myaccount. For more information on child and family benefits, go to www.cra.gc.ca/benefits or call 1- 800-387-1193 for English service and 1-800-387-1194 for French service. Update information to get your refund sooner Dos and don’ts to maximize savings (NC) Becoming a homeowner is one of the most thrilling, yet expensive, ventures a person can undergo. And while you can’t put a price tag on the pride associated with homeownership, you certainly can put one on a mortgage. One of the biggest decisions homeowners face aside from agreeing on a paint colour - is deciding whether or not to use their savings to put against their mortgage or add it to their retirement nest egg via an RRSP contribution. The mortgage versus RRSP dilemma is faced by many Canadians, but there is no one-size fits all approach to resolving it, says financial advisor Linda Knight. “Your age, income, mortgage amount, expenses, tax bracket, interest rates and available RRSP contribution room all play a role in determining how you should invest or allocate your money.” The RRSP versus mortgage dilemma is even more conflicting for first-time home buyers who have dipped into the RRSPs to put towards the purchase of their home. Through the Home Buyers Plan, first-time homebuyers can withdraw up to $20,000 each to help finance the purchase of their home. The withdrawal is tax-free as long as the funds are repaid within a 15-year period. According to Knight, there is one strategy that allows homeowners to contribute to both their retirement savings and mortgage. “By regularly contributing to your RRSPs and maximizing your yearly contributions you can use your tax refund to use against your mortgage.” Meeting with a trusted investment professional can help you evaluate your financial options and find solutions that are right for you. Savings to mortgage or nest egg?