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HomeMy WebLinkAboutThe Times Advocate, 2008-02-27, Page 88 Times -Advocate Wednesday, February 27, 2008 FINANCIAL 3 ADVICE BMO Financial Group THE FINANCIAL FACTS OF LIFE As a financial planner, one of the most commonly asked questions I'm faced with is, "How can I ensure I'll have a big enough nest egg for my dream retirement?" My answer is usually the same: start saving early. But with today's hectic and often expensive lifestyle that's easier said than done. Different life phases require different investment strategies. Being a strategic investor means designing an investment portfolio that balances long-term goals with life changes. Sound complex? It really isn't. The investment strategy you have in your twenties should be completely dif- ferent than the investment plan you'll have in your forties. One of the biggest mistakes investors make is not regularly meeting with a financial planner to fine tune their investment strategy to ensure they align with their goals with their current lifestyle. Some of the most common life stages include: EARLY ADULTHOOD: Investors in this stage are just starting their careers — an ideal time to get into the habit of saving. I recommend contributing regularly to an RSP in order to benefit from tax-sheltered investment growth. At BMO, this can be as simple as setting up a Continuous Savings Plan where your RSP contribu- tions are automatically deducted from your bank account. FAMILY LIFE: Generally in this stage investors are in their 30s and are considering buy- ing a home and starting a family. While you may be earning more, you may also have bigger expenses including child care and mortgage pay- ments. At this time of your life, you may also be thinking about saving for a child's education. Starting early is important, that's why BMO has intro- duced LifeStage Plus funds - maintenance -free portfolios with target end dates to simplify investing when it comes to saving for specific events or goals. PRIME TIME: By this stage, most people have reached their peak earning potential while most of their expenses including mortgage payments and child care cost have declined. This is the perfect life stage to play "catch-up" with years of unused RSP contribution room. RETIREMENT: From a financial planning perspective, your retirement years will focus pri- marily on managing your retirement savings - that's why it's so important to start planning early for the income you'll need in order to live the lifestyle you desire in this phase of your life. As you are no longer earning a regu- lar paycheque, money management is critical. From GICs to mutual funds there are a variety of investment solutions that can help you reach your goals at every stage of your life. Working with a financial planner can help you select the right mix to make your money work as hard as you do. Ron Howson is a Financial Planner with BMO Bank of Montreal. You can reach him by e-mail at ronald.howson@bmo.com or by phone at 519-235-2206. 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 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" 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 NScotiaMcLeod" 9 Scotiabank'" Trademark used under authorizafon and control of The Bank of Nova Scotia. 5co[aMcteod is a division of Scotia C pit I Inc., Member OPE from your local EXPERTS C, the co-operators A Better Place For You- RRSPs - Basic Answers to Common Questions Are you one of the 70% of Canadians who have bought at least one lottery ticket this year in the hopes of funding your retirement? Why gamble your money away when you can invest it in a Registered Retirement Savings Plan? Why buy an RRSP? As well as helping you save for retirement, there are two great tax benefits: 1. An RRSP contribution reduces your income tax, and depending on how much you make, you'll end up with either a lower tax bill or a higher refund. 2. The money earned by an investment in an RRSP is not taxed until it's withdrawn - it grows tax-free in your plan. Then, when you're ready to retire, typically income is lower and so is your tax rate. Basically, you save on income tax and accumulate tax-deferred savings for your retirement. But what about the government pension plan? By the year 2011, more than 20% of the population will be over the age of 65. Fewer people will be working and contributing to the gov- ernment pension plan, so your pension benefits might not be as gener- ous as you expect. It makes sense to have your own plan, too. How do people manage to come up with money at RRSP time? Many people contribute smaller regular monthly amounts instead of one large annual lump sum payment. Not only is it easier to budget, but it also increases the value of the investment faster. You could also talk to your advisor about whether you might benefit from an RRSP loan. What's the difference between buying an RRSP from a bank, a life insurance company, and an investment advisor? Generally, they all offer the same types of investments and mutual funds from a variety of financial institutions. The only difference is a specific type of RRSP made up of "segregated funds" offered by life insurance companies. Just like mutual funds, segregated funds are invested in equities, bonds, and other investments. However, they differ dramatically in that segre- gated funds guarantee all or most of your principal investment upon maturity or death, while mutual funds sold by financial institutions gen- erally have no guarantees at all. Advice by Joe Vanden Elzen C, the co-operators 7.0 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 YOU PUT THEM IN A SAFE PLACE. NOW, WHERE WAS THAT? Are your stock, bond or other certificates in a safety deposit box, desk drawer or closet... or are you not sure at the moment? A lost or destroyed certificate can mean inconve- nience and lost money for you and your heirs. Let Edward Jones hold them for you. You still retain ownership and make all the decisions - while we handle all the paperwork. We'll automatically process dividend and interest payments, mergers, splits, bond calls or maturities and more. Even better, you get a consolidated account statement and tax reporting at tax time. Let us help simplify your life. Call your local Edward Jones advisor today. Mark R. Hartman Financial Advisor 436 Main St., P.O. Box 1727 Exeter, ON NOM 1 S7 Office 519-235-3881 www.edwardjones.com Member CIPF Edward Jones MAKING SENSE OF INVESTING Godbolt, Ciufo Insurance & Financial Services Inc. Q. Is Long -Term Care Insurance an important coverage for retirees? A. Yes, absolutely, everyone who is 50 plus should con- sider Long -Term Care Insurance (LTCI); this insurance coverage could be as important to your finan- cial health in retirement as your investments. LTCI is an insurance coverage designed to help cover the costs associated with physical limitations later in life. The policy is available to people up to age 80 in reasonably good health. Benefits are payable when an insured per- son begins to have cognitive impairment or needs assis- tance with the activities of daily living, such as moving to or from a bed or chair, clothing himself, or feeding him- self. The best plan design offers a tax-free, weekly benefit that can be used as the recipient sees fit - to pay for home care, home -making, facility care, pay a family member who provides care, etc. The coverage is important because the costs of care are high and can quickly erode retirement savings. This impacts the person with deteriorating health as well as the other spouse. Having LTCI can allow for a greater range of choices for the person experiencing a health cri- sis, for example allowing care in the person's home (which is the costliest form of care) instead of in a facility. Plus the healthy spouse is protected financially since the brunt of the expenses are covered by the LTCI instead of the couple's investments. If you would like to know more about this important coverage, please contact me at 519-235-2740 or 1-800-355-6082. Advice by 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 re Sun Life Assurance Company of Canada, 2008. Fred Godbolt BASc acSun* -4 Life Financial encbteice security In your life. In your investments. Turn to FaithLife Financial for expert financial advice. Doug Deichert, FIC Financial Representative Tel: 519-235-4871 • ddeichert©faithlifefinancial.ca www.faith Iifefinancial.ca N.-.FaithLife FINANCIAL LIFE INSURANCE I INVESTMENTS I UNIQUE MEMBER BENEFITS F,dhh f Fhand ris a.rogstered Cade came for Lufteran Lire insuare Sodety of Canada 01 -08