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Message From Terry |
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Financial
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About
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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
:
Over the next few weeks you will be hearing a lot about RRSP investing. One has to ask what all the fuss is about, considering only two thirds of Canadians own a RRSP and only 9% of them maximize their contribution. Restated, 91% of Canadians do not maximize their eligible RRSP contribution. That is an astoundingly high percentage. Yet, most Canadians when asked at what age would they like to retire, the answer normally is age 55 and most would tell you well before age 65. There is a disconnect between their thinking and their actions to this phenomena. It stands to reason that if your not maximizing your RRSP’s the likely hood of retiring early is a remote possibility at best.
If 91% of Canadians do not contribute the maximum to their RRSP then the average Canadian has thousands of unclaimed tax dollars owing them. For most of us 40% of every dollar we contribute to our RRSP’s will come back to us in the form of a tax refund. If you contribute $10,000 you will save $4,000. (tax savings will vary according to your personal tax bracket)
But the real
benefit is retiring sooner than later. Having the freedom to roll over
or roll out in the morning. Deciding how your day is going to go on your
terms. Vacationing when mood strikes you, golf during the week, donating
your time to charitable causes.
The main article this month is very appropriate. Titled The Biggest Risks
to your Financial Success Are Behavioral. How you act, as an investor
and consumer are the biggest risks to your financial success. Buying cars,
when you should be saving. Most Canadians never think twice about financing
a car, but would never consider borrowing to buy a RRSP. Financial
success is not determined by what you know, or plan. Financial success
is determined by what you do.
Plan to meet this month to review your RRSPs and how you can optimize your contribution this year. Take time to plan now.
The deadline for RRSP investing is March 1. I can help you with RRSP loans and recommend the most suitable RRSP for you.
Thank You
Each year we dedicate a section of our newsletter to thank those clients who have helped us to grow our business. Client referrals are the primary means by which we grow our practice. Client referrals send a powerful message that you trust that we will take care of your friends and colleagues and we are committed to upholding that trust. Thank you for allowing me to serve you.
The Biggest Risks to Your Financial Success Are Behavioural
You can significantly increase the value of your RRSPs by understanding and taking advantage of a more effective savings approach.
How you act as an investor and a consumer are the biggest risks to your financial success. Investing behavioral risks are:
1. Procrastinating
2. Suspending or reducing savings
3. Spending RRSP refunds
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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