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This newsletter is courtesy of Terry Fay and RetirementByDesign.ca. Please remember that while strategies outlined within this newsletter may be appropriate for some investors, you should always consult a financial advisor to determine if they are appropriate for you.
Sincerely,
Terry
Hello:
Happy New Year to one and all!
The beginning
of a new year is typically filled with hopes of renewal, reflections on
achievements from the past year and resolutions for improved behaviors.
Sadly, our thoughts have recently been pulled strongly to those impacted
by the events in South Eastern Asia. As much as there have been many pleas
for donations of money and provisions, and I would encourage all to give
according to their hearts, remember the ongoing commitments you have made
to worthwhile causes in your communities or other endeavors that speak
to you. Many of those organizations count on your quiet ongoing generosity.
On the investment front, dare I tempt fate by saying that 2004 wrapped
up as a fairly decent year in terms of investment returns on a variety
of asset classes. The fourth quarter, in particular, registered strong
returns and proved again how a healthy year's return can be achieved in
a relatively short period of time. Through many of my meetings early in
2004 I suggested that a good outcome for the year might be one that involved
little drama or reduced volatility. Much of the preceding four years had
been filled with considerable drama, the first three on the downside and
2003 largely on the upside. 2004 seemed to consolidate much of those gains
and advance values in a steady if not dramatic manner. However, we should
be careful not to be complacent or to think that calm waters are always
in front of us.
I continue to enjoy the benefits of a rich interaction with so many of
you. The start of any year is a time for renewal and hope. I would urge
you to be hopeful as you go forward this year and at the same time I would
encourage you to reflect on those strategies that have worked well for
you, but remain sensitive to those changes that can frequently occur.
So often in the investment world it is what we haven't thought about that
serves to surprise us. Similarly, consensus views frequently disappoint.
I welcome the opportunity to meet with you this year to discuss all your
financial planning goals.
How much do you have --- and how much do you need? Having enough to retire the way you want.
1. Having enough to live and enjoy life, and
2. Leaving a legacy, perhaps to our families or favourite charities.
But few of us realize how much the quality of life we live in the future depends on what we contribute in the present.
Try to match the retirement picture in your head with what your savings are telling you. Don’t want to go there? You’re not alone. Many people avoid linking dollars and retirement in the same thought – retirement may seem too far off, or the financial realities are just too stressful.
RRSP deadline fast approaching
To LIVE WELL in retirement you will need to have an income that is 85-100% of your pre-retirement income.
Now is the time to meet to discuss your RRSP needs for 2004 and 2005. The maximum contribution for 2004 is 18% or your earned income in 2003 to a maximum of $15,500. The maximum increases for 2005 to $16,500.
RRSP loans are available though are affiliation with a variety of lending institutions. One of the more attractive loans available is at prime less 1%. No income verification on loans under $50,000.
Many of you have not been maximizing your RRSP contributions every year and now have a large RRSP carry forward. If you have carry forward room in your RRSP you are paying more tax then you should. Consider for a moment that you are able to contribute $20,000 to your RRSP. This represents, conservatively, $6,000 to $8,000 in tax refunds you have not claimed yet. Money you could put to use for your benefit not the governments. Borrowing to invest in your RRSP, although the interest is not tax deductible, at a cost of 3.25% per year, it is still far more financially prudent to borrow to buy your RRSP then to postpone the investment entirely.
Please don’t hesitate to call me to see how we can help you maximize your RRSP contribution this year. The deadline for making a contribution is March 1st.
All you really need to know is that we are committed to helping our clients achieve financial security and peace of mind.
Our Mission: Enhancing peoples lives by creating a positive life vision and the money to support it through our unique approach to financial planning.
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Mutual Fund Products Offered Through Dundee Securities Corporation.
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