A8 - The Terrace Standard, Wednesday, February 7, 1996

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Tax benefits await Canadians who invest in RRSPs

Tax benefits await Canadians who invest

in RRSPs by Feb. 29. lion ~~ contribution Canadians who ceiling.

invest in registered Although Canad-

retirement savings ians invested a record

plans by Feb. 29 will save about $5 billion in 1995 tax payments-but their savings could be

far greater if they took tribution limit, accord-

more advantage of the current $154 bil-

$20.9 billion in RRSPs in the 1994 tax year, taxfiler are using less than 15% of their con-

CHOOSE _ NOW NOT LATER

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A p<

STAR Mackenzie

ing to Statistics Canada, The government

allows RRSP buyers until Feb,29 to make a contribution that can be deducted from last year's earned income, resulting in a deduc- tion of tax payable. While financial plan- ners urge taxpayers to contribute on a monthly basis throughout the year many defer their purchase until the last minute. For the 1995 tax year, the maxi- mum contribution is the lesser of $14,500 or 18% of earned

income, minus pen-

sions adjustments.

The $154 billion contribution ceiling- representing potential tax deferments of some $35 billion (equal to this year’s federal government deficit)- is arrived at by combining current deduction entitlements with unused deduc- tions carried forward from previous years.

“There's absolutely no chance of Canadians getting anywhere near there limit’, says Janice Penner of Investors Group Inc. one of Canada’s leading Financial planning’ companies.

“It’s in the interests of every taxpayer to use as much of their contribution limit as they can even if it is only a small portion of what they‘re entitled to,” says Ms. Penner,

who is Director of

Ma rketing of the Winnipeg-based Financial planning

organization and mutual fund distributor.

“In addition to an immediate tax benefit, RRSP investors are building financial security for their retirement,” she adds. “It's one of the most

generous tax deferral programs in the world and it’s good to see that more Canadians are taking advantage of it.”

Statistics Canada reports that the number of Canadians contributing to RRSPs is growing-up by four percent in 1994 form 1993, with 5.3 million people, or nearly one in three taxpayers, investing at least part of their contribution limit. While women made up half of all taxfilers, only 43% made RRSP contributions.

Three out of four

contributors were under 43, with median income of

$34,200. About one- third of contributors used up their limit.

Ms. Penner declares that RRSPS are the most effective means of taking responsibility for one’s retirement needs. “We all realize the government will be able fo do little for us when we are ready to retire.” she says, “By contributing to an RRSP on a regular basis, even small amounts will provide baby boomers and others with a welcome cushion when they're ready to retire,”

RRSPs are offered by all types of finan- cial institutions. They provide for invest- ments to be made in different types of mutual funds or such vehicles as guar- anteed investment cer- tificates or term deposits. If a taxpayer wishes, a selfdirected plan can be set up in which the individual selects stock, bonds or

other types of investments, Mutual — Funds

appear to be the most popular type of RRSP investment, says Ms. Penner. She cites the

growing number and wider variety of mutual funds. Her own company, Investors Group, is nearly dou- bling the number of mutual funds its offers, including new funds managed by such global names as Merrill Lyncn’ and Rothschild.

‘We recommend seeking financial plan- ning advice before

making a commit- ment.” Ms. Penner says. “A financial planner can analyze a person's financial sit- vation and their life needs, to come up with the best combina- tion of investments. What may be: suitable for one person may fail to meet the invest- ment needs of another.”

Whatever one’s sif-

vation, Ms. Penner has two recommenda- tions for all RRSP buy- ers. “First, contribute as much as you can by Feb. 29 to take advantage of the 1995 tax deferral. Second, try to start contributing on a

monthly basis from:

now on so that your new investment is working for you on a year roynd basis.”

RRIF - Flexible retirement income...

ee Ash

taxes,

Tf you're about to begin your retirement, you can transfer your RRSP into a Registered Retirement Income Fund (RRIE).

An RRIF gives you the flexibility to set up a retirement income plan that fits your particular needs while con

See us about an RRIF today.

tinuing to defer

MUTUAL FUNDS INCLUDING ETHICAL FUNDS ARE ALSO AVAILABLE.

*Premium rates paid for larger purchase, transfers & long term deposits

Call MEMBERLINK 2t:

635-0114

for up to the minute rates and information.

ph. 635-7282

wite belong to yeu.

Terrace & District Credit Union

4650 Lazelle Ave., Terrace, BC

We belong ' you”

the credit untan advantage: we are a profit sharing, member owned institution

Serving Members & Their Families

FLIES

build a

Terrace Branch © 4640 Lakelse Ave.

Tel: 635-7117

Speak to an RSP Specialist by visiting your Royal Bank branch, or by calling

* CUSTOMER ”"" ABILITY=

BETTER RSP PERSONALIZED RSP ADVICE

She's been contributing to her RSP for years but lagks at her RSP differently naw. She wants to balance growth with security. She needed to make decisions. But wanted the best advice first. So she looked for people with the most experience and knowledge of RSPs. And chose Royal Bank, where an RSP Specialist gave her the’ professional advice she was secking. Like how Retirement Term Deposits give her the combination of safety and guaranteed returns, Or ways to borrow to take adyan- tage of her allowable deduction limi. If you'd like to build a better RSP, speak to an RSP Specialist at Royal Bank, They can help make it happen.

1-800 769-2599

&

ROYAL BANK

_ RSP CONTRIBUTION DEADLINE: FEBRUARY 29, 1996,

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