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HomeMy WebLinkAboutThe Citizen, 1990-02-07, Page 18PAGE 18. THE CITIZEN, WEDNESDAY, FEBRUARY 7, 1990. Changes made in rules for RRSPs this year and when, courtesy Royal Trust: For the 1989 tax year (for which your return is due by April 30) RRSP contribution limits for taxpayers without a company pension were 20 per cent of earned income to a max­ imum of $7,500. Pension plan members could contribute up to 20 per cent of earned income to a maximum of $3,500, minus the amount they paid into their employer’s plan. Also for 1989, all pension in­ come (including Old Age Security and Canada/Quebec Pension Plan payments) and up to $6,000 paid in periodic Registered Retirement Sav­ ings Plans (RRSPs) are more important than ever under tax reform, still Canada’s biggest tax shelter and the essential factor in millions of Canadians’ hopes for solvency in retire­ ment years. Plans for major changes to ex­ pand RRSP opportunities were first announced by finance minister Michael Wilson in 1986 and have been on-again- off-again since then. In Decem­ ber, they were “on” again, with the legislation before Parlia­ ment. Here’s an RRSP/pension cal­ endar to show you what’s scheduled in the RRSP saga Consider T-bills for high-yield, short-term investment option Treasury bills have been around since the early 1960s in Canada and they’re becoming more and more popular year by year. They’re a huge market, with well over $100 billion out­ standing. There’s also an ac­ tive, efficient secondary mar­ ket. T-bills’ popularity isn’t surprising because they’re flexible, absolutely safe and pay very respectable yields. Al­ together, the bills are just about ideal for most short-term investment needs. Federal T-bills are a form of government bond with matur­ ities of 30, 60, 91, 182 and3cc> days. They’re purchased in huge amounts by banks and in­ vestment dealers at Bank of Canada auctions every Thurs­ day nqon. Then you can buy them for a given number of days. You buy at a discount on the maturity value and the dif­ ference represents your yield. Banks usually offer the bills in minimum denominations of $10,000 while brokers often sell units as low as $' °00. Prices and yields vary not only from week to week based on the latest Ottawa auction, but also from institution to institution. So shop around. In addition to the Ottawa ver­ sion, some provincial govern­ ments also offer T-bills of their own and yields vary marginal­ ly between the various kinds. But whichever you choose, you’ll find T-bills enable you to park funds conveniently for relatively short periods pend­ ing longer-term investment choices — and at very respect­ able interest. T-bills are entirely safe, too, and usually flexible. If you need access to your funds sooner than expected, you can probably arrange for your bank or broker to buy back your holdings for a small fee. So you "-on’t have to miss out on that golden opportunity that came up unexpectedly. income from private pension' plans or deferred profit sharing plans could be rolled into spousal RRSPs; but transfers of retiring allowances into RRSPs were limited to $2,000 for each year of service after 1988. (Pension plan member­ ship doesn’t affect this amount.) RRSP contributions can normally be made to the end of February, but for 1989 pension rollovers had to be made by Dec. 31. In 1990, the same contribu­ tion limits will apply as in 1989 for members and non-members of employer pension plans. But pension rollovers will no longer be allowed except for the spe­ cial spousal plan rollover described above, and foreign pensions. Direct plan-to-plan transfers will still be permitted although special rules may limit amounts. And in 1991... By 1991, the contribution limit for taxpayers without pension plans becomes 18 per cent of 1990 earned income to a top of $11,500. For plan mem­ bers in 1991 and subsequent years, contribution limits will be determined by Revenue Canada individually, relating to the year’s earned income minus a “pension adjustment”. Taxpayers can expect to be ad­ vised of their amounts in ample time to make contributions. Then for 1992 and years fol- - lowing, contribution limits for taxpayers who aren’t pension plan members will be 18 per cent of earned income to maxi­ mums as follows: 1992 — $12,500; 1993 — $13,500; 1994 — $14,500; and 1995 — $15,500. Then for 1996 and after­ wards, contributions for “non­ plan members” will be 18 per cent of tne prior year's earned income to a maximum indexed to the annual increase in the average industrial wage. GIC Rates q / ft / -NO FEES <74 VO -ALL INVESTMENTS GUARANTEED & INSURED • FUNDS TRANSFERABLE VIA CHARTER BANK NVEST M ENTS G.I.C. R.R.S.P. LIFE CARDIFF & MULVEY REALESTATE & INSURANCE LTD. BROKER BRUSSELS 887-6100 FARM • RESIDENTIAL • COMMERCIAL A Regal Capital Planners Financial Centre ADDRESS: 360 WALLACE AVE. N. SUITE NO. 8 LISTOWEL, ONTARIO N4W 1L4 BUSINESS HOURS: 8:00 a.m. - 5:00 p.m. (Monday to Friday) OR BY APPOINTMENT Extended Hours Open Saturdays In February 9a.m.-1p.m. RRSP’s are not all the same! Why save for retirement with an or­ dinary RRSP. This year combine complete convenience with a flexi­ ble RRSP that offers: •several savings choices •Mutual Fund options available •no administration costs •competitive rates •creditors protection if a family member is designated as beneficiary •instant Tax Rebates CALL TODAY Call me: Tony G. Arts 107 Main St. Seaforth, Ontario Seaforth: 527-0794 London 432-1041 SunLife 6yeavs-- 291-1353 "SERVICE, INTEGRITY AND YOUR INTERESTS FIRST' oPST'-- 6£SIhY G\C pSP ’