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HomeMy WebLinkAboutThe Times Advocate, 2008-02-20, Page 11Wednesday, February 20, 2008 Times—Advocate 11 FINANCIAL ADVICE What happens to my pension plan if my employment is terminated or I leave my job? This is an important question, particularly now when your focus may be on retirement planning and RRSPs. If you leave an employer before retirement, you need to investigate your pension plan options.You may be able to transfer a lump -sum from your Registered Pension Plan to a "locked -in" registered savings plan (LIRA).While locked -in funds must be used to provide retirement income, you have freedom to choose where you want to invest these assets. Like many Canadians, you may find yourself relying on your own resources to fund your retirement. Here are a few retirement planning strategies to consider: contribute early in the year; include foreign content holdings; contribute monthly to benefit from dollar -cost averaging; make use of asset allocation; and contribute to a spousal RRSP. It is important to meet with a financial advisor before the February 29th RRSP deadline to discuss your pension transfer options and review your overall retirement planning needs. Call me for a free retirement planning checkup and your chance to Become a Christian Community Hero — you could win $1,000 for yourself (two-year savings annuity) and $1,000 for your church or favourite charity. Doug Deichert, FIC Financial Representative Tel: 519-235-4871 • ddeichert©faithlifefinancial.ca �C FaithLife FINANCIAL www.faithlifefinancial.ca FaithLife Financial 0 a registered trade name for Lutheran Life Insurance Society of Canada. 02-08 e/izbPt~ security. In your life. In your investments. Turn to FaithLife Financial for expert financial advice. Doug Deichert, FIC Financial Representative Tel: 5 19-235-4871 • ddeichert@faithlifefinancial.ca www.faith!ifef nancial.ca N.'',FaithLife FINANCIAL LIFE INSURANCE I INVESTMENTS 1 UNIQUE MEMBER BENEFITS Farthl he financial is a regstered trade name for Lutheran Life Insuance Society of Canada 01-08 C� the co-operators A Better Place For You - 350 Main Street, Exeter ON NOM 1S7 Bus: 519-235-1109 Toll Free 1-866-458-1109 E-mail: joe_vanden_elzen@cooperators.ca JOE VANDEN ELZEN Agent HOME AUTO LIFE RIFS GROUP BUSINESS FARM TRAVEL TODAY IS A GOOD DAY TO START BUILDING FOR TOMORROW Retirement awaits. Plan for it. Know your options. George Godbolt Paul Ciufo CFP CLU CFP Godbolt, Ciufo Insurance & Financial Services Inc. 425 Main St. Exeter, ON 519-235-2740 © Sun Life Assurance Company of Canada, 2008. Fred Godbolt BASc Sun ie: Life Financial from your local EXPERTS EdwardJones MAKING SENSE OF INVESTING Step-by-step approach key to managing retirement income There's no doubt that saving and investing during your career - par- ticularly through a Registered Retirement Savings Plan (RRSP) - is criti- cal to setting yourself up for an enjoyable retirement. But it's important to understand that the story doesn't end there. You also need to know that your money will be there for you as you need it during retirement. To help give you peace of mind that your retirement funds will last, here's a systematic, step-by-step approach you may want to follow. The first step is to make a list of all your assets and debts so you can determine how muchou have. That total should include all your stocks, bonds, mutual funds GC's and annuities. These assets should all be consolidated in one place, if possible. Next, you'll need to determine your retirement income needs. Whether you stop working or work part time, you'll likely need from 70 to 90 per cent of your pre -retirement income to maintain your stan- dard of living in retirement. But remember that because this is just a rule of thumb, it makes sense to list your specific expenses to estimate how much you'll need. To have that income, you'll probably need to use withdrawals from your registered retirement plans. These withdrawals will have to bridge the shortfall you have between your estimated annual retire- ment expenses and any outside sources of income you mayhave - such as pension plans, government benefits, non-registeredsavings and part-time employment income. Knowing that, you'll then have to figure out how much you can with- draw each year. This is a complex decision that must take into account a number of factors including your life expectancy, risk tolerance and asset allocation. Of course your choice of withdrawal sum will have a significant impact on how long your money will last, so make sure you consult with a financial advisor in determining an appropriate amount. Once you decide how much you can realistically withdraw, and from which accounts, you need to put your strategy into action. This involves selecting a portfolio objective specifically matched to your goals and the risks you are comfortable taking. You should also have a spending strategy to help ensure your money lasts as long as your retirement does. Finally, it's important to review your situation annually. Over time, your health or income needs may change so your strategy may need to be adjusted. In tackling each of these steps, make sure you speak to us so you have the professional support you need to do it all prudently and com- prehensively. This service is free of charge! Advice from Mark R. Hartman EdwardJones MAKING SENSE OF INVESTING Mark R. Hartman Financial Advisor fl 43 Main St., P.O. Box 1727 44 Exeter, ON NOM 1 S7 Office 519-235-3881 BMO Financial Group Ron Howson, PFP FINANCIAI. PLANNER Investment & Retirement Planning BMO Investments Inc. BMO Bank of Montreal 400 Main Street Exeter, ON NOM 1S6 Tel: 519-235-2206 Fax: 519-235-0888 ronald.howson@bmo.com Look for part three of our financial advice columns in next week's paper. ScotiaMcLeod' Scotiabank" Back to Basics: A Reminder of RRSP Musts To play any game, it is important to know the rules and how they may affect the outcome or result of the game. Not to suggest that planning for retirement is a game, but knowing how RRSP rules can affect your retirement planning is very important. Below are a few of the "must knows" for your RRSP planning. 1. Maximize your contribution The more you put away the more you will have. It is important to know the maximum allowable limit for your financial situation. Currently for 2007, you can contribute 18% of your prior year's earned income up to a maximum of $19,000 less your pension adjustment (PA) and your past service pension adjustment (PSPA). Remember also that carryforwards of unused contributions from 1991 onward can also be contributed. 2. Contribute Today The sooner you contribute, the sooner your savings start growing for your retirement. The compounding of interest returns can make a big difference on your RRSP balance over time. 3. Spousal RRSPs Contributions can be made to a spousal RRSP that will allow income splitting at retirement which in turn will reduce the amount of tax that you will pay. Contributions are limited to your personal limit. 4. No More Foreign Content Limit • 30% foreign content limit in RRSPs and registered pension plans is not a thing of the past. • Canadian investors now have the option to invest up to 100% of their retirement plans into foreign securities, without penalty • Opportunities for money managers to seek out the best investment opportunities wherever they exist is wonderful news for Canadians - provides the opportunity for greater diversity and more attractive risk-adjusted returns. 5. Consolidation Consolidating your assets leads to more efficient assets management as well as reduced costs. Remember this years RRSP contribution deadline is February 29th, 2008. You should discuss with ScotiaMcLeod advisor Michael Skochinski why consolidation would be right for you. Advice from Michael Skochinski Your Total Financial Solution... ScotiaMcLeod® 148 Fullarton Street, Suite 1801 London N6A 5P3 519-660-3254 1-800-265-1242 Michael Skochinski Senior Financial Planner ScotiaMcLeod'" 5 Scotiabank- "T used under authonearm, antl control of The Ha k of N a Scova. Scolln.leod u a d o c Sc Ilia Cap tat Inc Member ciPF FINANCIAL GROUP INVESTMENTS LEAH MORGAN BRENDA DAYMAN Investment Funds Advisor Investment Fund Advisor JOHN HANSON LARRY JOHNS Life Manager C.L.U. 186 Main St. Exeter, ON NOM 1S1 519-235-4722 Thames Financial iscommited to one-on-one service "We still make house calls"