REWARD YOURSELF oe

PAGE 6, MONEY SUPPLEMENT, 1990

Learn to say ‘yes’ to provide —
happiness in retirement years —

By JOHN WITHROW, CA

When we retire, we all have at
least an additional 2,000 extra
hours a year to spend, hours
that weren't available when we
worked 40 hours a week, 50
weeks a yeur.

While many of us are well
versed in financial planning for
our retirement years, how
many really know how to plan
the effective use of those 2,000
extra hours?

One key is to realize that on
retirement you're not changing
yourself, but extending your-
self. Therefore, plan to reward
yourself for years of hard work
by doing the things you really
want to do. And more impor-
tantly, enjoy doing them!
Only do it
if you like it!

Volunteer work for a hospital
or the United Way may be your

_ choice. Or you might want to

become involved in political or
church work. While your ef-
forts will be valuable, you
should resolve to contribute
only as long as it’s rewarding
for you.

Many of us have hobbies and
retirement is a golden oppor-
tunity to finally reach new
heights of accomplishment,
whether it’s in photography,
fourmet cooking or golf. Bear
in mind, however, it's always
better to have more than one
hobby — 2,000 hours of any-

thing can simply become a
grueling endurance test rather
than an enjoyable pastime.
Continuing education,
whether through universities
or community colleges, is also
a very rewarding way to
develop expertise or simply
satisfy curiosity. And, many in-
stitutions offer courses free, or
at reduced rates, for retired
students.
Putting yourself on the mail-
ing list for catalogues of course
offerings will bring thousands
of opportunities to your door —
you can earn an MBA or even
become a teacher yourself.
And don't rule out thoughts of
a second career. If you've al-
ways loved to read, you many
want to work part-time at a
bookstore, For something more
exotic, you could follow the lead
of a retired banker who signed

on as the purser of an ocean
liner and cruised the world.
Start a part-
time business

Or, you may want to start
your own business. If you do,
‘spread the risk a little by bring-
ing others onboard. However,
agree at the outset that if you
tire of the venture or become so
involved in it it’s no longer en-
joyable, then it’s time to quit.

Over the years, most of us
develop the habit of saying “no”

to the many invitations both -

formal and informal, that come
our way. In retirement, a key
element to success is learning
to say “yes”. At worst, you'll
identify those things you don’t
want to spend your time doing.
At best, you'll discover whole
new worlds of interest.

John Withrow is a retired
chartered accountant.

- find best GIC or RRSP

SRS

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sitet pencaebate at ie Oe

If you're like most smaller investors, you're often confused
by the huge range of term deposits, GICs and RRSPs all
competing for your dollar. How often have you agonized long
and hard to make a choice, only to wonder afterwards if you

overlooked a better deal? .

‘Well, there are people around to help you get the best rate
available for the term you want and with an appropriate level
of safeguards to protect your investment.

These are the professional deposit brokers — members of the
Federation of Canadian Independent Deposit Brokers Inc, —
and you can find them in almost all parts of Canada.

They act as agents for trust companies and some chartered
banks and shop the market at least once a day to look for the
best deals. Futhermore, their service is free to you because the
brokers are paid commissions by the financial institutions
where they place your business. - . oo

The federation has strict standards of professional ethics and

- most of its members have long-established clienteles, so you're

going to be in good hands.

But make sure you're dealing with a professional, full-time

deposit broker with the proper credentials. Remember, there
are some real phonies out there, including bait-and-switch
artists who promise top rates to get you in the door, only to
switch your money into something much less attractive once

you're hooked.

To find out more about the Federation of Canadian Inde-
pendent Deposit Brokers Inc. and its members across Canada,
write Kenneth A. Brown, Secretary-Treasurer, 18 Levendale

4H2.

Don’t count on Ottawa for security
of finances in retirement years

By PAUL KUTTNER
Royal Trust

Many Canadians seem to
have a relaxed attitude when it
comes to retirement planning.
They happily spend thousands

of dollars,a week in the sun in.

mid-winter, but if you suggest

Proceed at your own risk
with spousal RRSP rollovers

Can you place $6,000 a year of
private pension income in your
spousal registered retirement
savings plan or can't you? The
answer is still a definite maybe.

Ottawa has announced the in-
tention to permit spousal rol-
lovers of private pension in-
come (not CPP, QPP or OAS
receipts) and income from
deferred profit-sharing plans
in the years 1989 to 1994 in-
elusive.

Clearly, they would provide a

‘* .wseful income-splitting facility,

especially since 1989 is the last
year you can contribute pen-
sion income to your own RRSP.

The trouble is the necessary
legislation is not yetin place. In
fact, at this writing, it hadn’t
yet been introduced, and time’s
a-passing. There’s no guaran-

tee the necessary bill ever will
be introduced for Parliament's
OK and until the law is right
there in the statutes and
proclaimed in force, you could
be disappointed.

Opinion varies as to what’s
going to happen. Will there be
legislation in time to permit
the rollovers before the end-of:
February RRSP contribution
deadline, or ever?

One school says the feds
would lose all credibility ifthey
actually went back on their
word,. Another says otherwise
in these tax-hungry times for
government.

Chances are things will all
come out right in the end. But
caution does seem to point to
delaying your move until you
know the law is in place.

investing that money for
retirement, they just smile.

Next year, maybe.

There may be two reasons for
this. The first is psychological
— until you reach 50, retire-
ment seems too far away to
worry about. The second is a
vague impression that “some-

one else” will provide the in-.
come needed to maintain -

today’s lifestyle after retire-
ment. ;

That someone else usually is
the employer’s pension and
government programs, such as
the Canada (or Quebec) Pen-
sion Plan and Old Age Security.

The harsh truth, however, is
that if you rely exclusively on
these sources, you may spend
your retirement years simply
struggling. Sadly, many retired
Canadians live below the
poverty line because they
didn’t plan for their post-work-
ing years when they had the
chance.

Let’s review the government
programs first. The oldest and
best known is Old Age Security,

a universal program that

begins when you reach age 65
(you must apply to receive
benefits; they’re not automat-
ic), The amount is adjusted

quarterly; currently it’s”

$337.04 a month, or just above
$4,000 a year.

OAS payments are fully in-
dexed for inflation, so their

purchasing power will be

maintained in the future, How-
ever, it’s. doubtful they'll be in-
creased by more than the cost-
of-living increase.

There’s also a chance some or

-all of your OAS payment may
be taxed back when you reach .

retirement. Finance Minister

Wilson introduced a controver---

sial “clawback” provision last

April that will hit OAS benefits

of anyone with more than
$50,000 income. - .

Only a small percentage of
older Canadians are affected
immediately. But the $50,000
threshold is not fully indexed
for inflation. Only increases in
the Consumer Price Index
(CPI) increases greater than 3
per cent will be applied.

This means even though OAS

is stil] theoretically a “univer-
sal” program you simply can’t
count on receiving full benefit
from it if your retirement is
several years away.

The Canada and Quebec Pen-
sion Plans are designed to pro-
vide a basic retirement income.
Only those who have paid into
one of the programs can make
claims against it. Maximum
benefit this year is $6,675 an-
nually. As with the OAS, you
must make formal application
to receive benefits.

The CPP is fully indexed for
inflation but payments won't
increase beyond that. So the :
current level represents the
buying power you'll receiv
when you retire.

There is some flexibility in
how you receive your benefits,
however. You can if you wish,
split the monthly CPP pay-
ments with your spouse, except
in Quebec. This may save some

_tax dollars and also could help

you avoid the OAS clawback by
keeping both of you under the
income threshold.

The bottom line is payments
from government assistance
programs will provide no more
than a fraction of your total
retirement income needs.

e

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