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HomeMy WebLinkAboutThe Times Advocate, 2008-02-20, Page 27Wednesday, February 20, 2008 Times—Advocate 27 FINANCIAL ADVIC Godbolt, Ciufo Insurance & Financial Services Inc. Should 1 make my usual RRSP contribution, despite recent stock market volatility? Yes. You should consult with a financial planner about your unique situation, but ifyour RRSP is composed of equities then generally it is benefcial to contribute as usual even dur- ingtimes of economic and stock market uncertainty. Here are a ew reasons why. First, short -run changes in stock markets are relatively unimportant to RRSP investors. For most, saving for retirement is a financial goal with a very long time horizon. Therefore it is the performance of stock markets over the span of years or even decades that should be of concern. Peaks and valleys are inevitable parts of the investment cycle, and long -run investors should neither feel overly excited during great years nor too worried about poor years. Second, recent declines in stock markets can actually work to your advantage. No one knows where the bottom is, but we do know that markets have declined from a high point seen in summer, 2007. So investing now would be an exam- ple of "buying low". Even the highest quality equities have declined in the general downdraft of a struggling market, and so they can be had for an attractive price. This can translate into bigger gains when the market rebounds. Finally, investors should trust in the resilience of markets. Often during the economic trouble of today we forget about the many crises that the markets have weathered in the past. We think "this time is different" — that the current problems are bigger than any seen before. However in this decade alone we saw sharp stock market declines in 2001 and 2002, then impressive gains for four years in a row. Terrorist attacks, wars, natural disasters, recessions, energy crises — we've seen these problems and the subsequent financial tur- moil before. However stock markets have always recovered and gone on to new heights. We should learn from these patterns, invest with confidence, and stay focused on our long-term goals. If you would like a no -charge, no -obligation review of your RRSPs and overall retirement and financial planning, please contact me at 519-235-2740 or 800-355-6082. Advice from Paul Ciufo CFP 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 Life Financial ) • AN set IPR The safe, smart and simple way to provide for your future. C the co-opelatols 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 RIPS GROUP BUSINESS FARM TRAVEL E from your local EXPERTS J ScotiaMcLeod' J Scotiabank'M Structuring a RRIF Portfolio A registered Retirement Income (RRIF) portfolio should be structured differently than a Registered Retirement Savings PLan (RRSP). After all, it performs an entirely different func- tion. With an RRSP, your main concern is growth. With a RRIF, you must be more concerned with both security (there is less time to replenish losses) and liquidity (because you are required to make regular withdrawls). When structuring your RRIF, you may want to consider taking only minimum payments and basing the payments on the age of your spouse, if he or she is younger. This allows you to defer taxes because the money is sheltered longer. It's also a good idea to structure your RRIF portfolio so that you have some investments maturing each year in order to satisfy the minimum withdrawl requirements. Since a RRIF can have a 20 year -plus time horizon, con- sider a few growth investments for your portfolio to help combat the effects of inflation. The table below illustrates how much you would need to increase your income after 15 and 20 years. As you can see, it is substantial. The Inflation Effect * Income @ age 60 Req. Income @ 75 Req. Income @ 90 $35,000 $50,000 $100,000 $54,529 $77,898 $155,797 $84,954 $121,363 $242,726 * Based on an inflation rate of 3% Tax Rules Allow Spouses to Split Pension Income Individuals who earn income eligibile for the pension income tax credit may reduce their tax bill through new income splitting measures introduced by the federal gov- ernment in October 2006. Previously, the only pension that couples were able to split was CPP/QPP payments. Now, pension income eligible for income splitting for those 65 and over includes payments from a RRIF. These are just some of the factors to take into account when structuring a RRIF portfolio. We have the expertise and access to sophistocated asset allocation tools to con- struct a RRIF solution that is 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 1 ScotiaMcLeod'" Scotiabank` "T bemark ,ed under.rirthorrza[,on and control of Me Pan, of Nova SC]t0a ScoriaMclzochs a bvisron of Scotia Ca,,,r,I Inc, Member OFF EdwardJones MAKING SENSE OF INVESTING Mark R. Hartman 07 436 Main St., P.O. Box 1727 ,j4 Exeter, ON NOM 1 S7 i Office 519-235-3881 Financial Advisor ernbPtaee 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 I ifefi nancial.ca FaithLife FINANCIAL LIFE INSURANCE I INVESTMENTS I UNIQUE MEMBER BENEFITS F.- h fe Fi a cial'Is a regstered¢ de name for Ls e. e Ufe insurance 5odery ofCnada 01-08 MANIFunclEx FINANCIAL GROUP \ INVESTMENTS The new year has certainlystarted with a surprise, with this sharp and sudden dcline in world stock mar- kets. The drop have been blamed on concerns that the U.S. has entered a recession and that this will lead to an economic slowdown in the rest of the world. In addition, there are fears that financial institutions may announce further losses stemming from the sub -prime mortgage meltdown. For sure, this kind of activity can be unnerving, espe- cially with the media reporting it on their front pages like a major natural disaster. However, the fact of the matter is that it's not a disaster. Market declines are a normal part of investing. Remember why you are investing - for the long term. History has shown that market downturns have provid- ed opportunities for people who remained committed to their long-term investment goals. By staying the course and continuing to invest - buying when prices are down - you can create enhanced potential for long-term gains. Furthermore your portfolio is diversified. A portfolio that is diversified by asset class (equities and bonds), sector and region will have more stable returns, because not all investments provide the same returns at the same time or respond to events in the same way. This is how time, helps boost returns and reduce risk at the same time. Ultimately your investments were chosen to help you meet your financial needs, based on your individual goals and risk tolerance. A stock market downturn can be uncomfortable, but it's no time for hasty actions. Together, we have developed a disciplined, long-term plan that can weather short-term changes in the invest- ment climate. If you have concerns about your portfolio, we are here to answer your questions. Feel free to contact us at 519-235-4722 Advice from Larry Johns C.L.U. THANIEsFundEx FINANCIAL GROUP\ INVESTMENTS LEAH MORGAN Investment Funds Advisor JOHN HANSON Life Manager BRENDA DAYMAN Investment Fund Advisor LARRY JOHNS C.L.U. 186 Main St. Exeter, ON NOM 1S1 519-235-4722 Thames Financial is commited to one-on-one service "We still make house calls" RETIREMENT IS CHANGING. WHAT ARE YOUR PLANS? Set up an appointment today to discuss how you can achieve your retirement goals. Financial Planners are representatives of BMO Investments Inc., a financial services firm and a separate legal entity from Bank of Montreal. BMO ® Financial Group Ron Howson, PFP FINANCIAL 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