Monday July 28, 2014




R.R.S.P. Information

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Explore all aspects of your finances

Reversing last year’s rankings, more Canadians are citing saving for retirement as a top financial priority compared to those who are prioritizing paying off debt, according to the 24th Annual RBC RRSP Poll. Over half (52 per cent) are now focusing on increasing their retirement savings, with 48 per cent placing a priority on debt reduction, compared to 44 per cent and 54 per cent respectively in last year’s poll. This reversal of financial priorities is even more marked among middle-aged Canadians - those 35 to 54 years old - with almost two-thirds (62 per cent versus 52 per cent last year) focusing on saving for retirement ahead of reducing debt (52 per cent versus 56 per cent).

“These findings indicate Canadians are more comfortable with how they are managing their debt and this is allowing them to focus more strongly on retirement savings this year,” explained Bill Hill, national retirement planning consultant, RBC. “To help ensure those savings will support the retirement they have in mind, we recommend they review their lifestyle and financial goals with a financial advisor as early as possible.”

The annual RBC poll also found that RRSP ownership among those aged 35 to 54 has jumped to 68 per cent from last year’s 58 per cent. In addition, one-quarter (26 per cent) of middle-aged Canadians has determined they will need to save, on average, $545,000 for a comfortable retirement.

“This is the age group that needs to be planning now for the lifestyle they want to have in retirement,” Hill emphasized. “As Canadians who have already retired know, there is so much more to your retirement years than just the money you think you’ll need. The beginning of each new year is a good time to sit down with a financial advisor to explore all aspects of a successful retirement - you may well find you have more options than you are aware of today.”

Don't wait to invest

Too many Canadians are leaving important retirement savings and planning strategies to the last minute as they rush to make a Registered Retirement Savings Plan contribution before the March 3 deadline, says Jamie Golombek, Managing Director of Tax & Estate Planning at CIBC Wealth Advisory Services.

“When you combine the tax deduction for the amount you contribute with the fact that you don’t have to pay tax on the accumulated investment income, most Canadians should have RRSPs,” says Mr. Golombek. “But many Canadians aren’t taking full advantage of the benefits RRSPs offer.”

Mr. Golombek’s new report, Getting the most out of your RRSP, focuses on the importance of Canadians taking the time to look at all of the benefits available from their RRSP throughout the entire year.

To get the maximum benefit from an RRSP, Mr. Golombek recommends five simple tips in his report:

Just Do It — Make an RRSP contribution

Be Timely — Choose when to claim the deduction for your RRSP contribution

Stick With It — Leave funds in an RRSP

Cover Your Bases — Designate beneficiaries

Plan for Redemption — Plan for RRSP conversion prior to age 71

“As the end of February approaches, many Canadians rush to make an RRSP contribution”, says Mr. Golombek. “With these five simple tips, investors can take the necessary steps to invest smarter throughout the year, and get the maximum benefits from their RRSP savings.”

Since retirement savings plans differ for everyone depending on their needs, Mr. Golombek recommends obtaining advice from a qualified expert. A CIBC advisor can help investors evaluate different savings and investment options for their RRSP.

Diversity matters

(NC) — The deadline for making your RRSP contribution is coming up fast – but not too fast for you to take advantage of a few last-minute RRSP tips designed to help make your retirement more financially comfortable.

Maximize this year’s RRSP contribution

• Borrowing can pay. The money you borrow will generate an immediate tax break and add to your tax-deferred RRSP growth potential. The key is to get a loan at a low interest rate and pay it back as quickly as possible.

• Split with your spouse to save. You can take advantage of a spousal RRSP to generate retirement income that is subject to less tax. This strategy works if your spouse’s income will be lower than yours over the next few years or in retirement.

• Diversify for better, more assured growth. Because there is a limit on the amount you can contribute to your RRSP(s), it’s a good bet you’ll need additional income to fund the retirement of your dreams – and that’s where your Tax-Free Savings Account and non-registered investment portfolio comes in. A well-balanced portfolio is based on an asset allocation plan that matches your risk profile and time horizon.

“With the right RRSP strategies you can save on taxes and retire with more,” said Jack Courtney, Investors Group advanced financial planning expert. “A financial planner can help make sure all your wealth-building strategies hit the bull’s eye on your life and retirement targets.”

Source: This column, written and published by Investors Group Financial Services Inc. (in Quebec – a Financial Services Firm), presents general information only and is not a solicitation to buy or sell any investments. Contact a financial advisor for specific advice about your circumstances. More information on this topic can be obtained from your Investors Group Consultant.


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