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Last week, this column focused on Saving for retirement and the concluâ€" sion was that saving for retirement should start as early as possible. The reason was that your savings would have longer to grow and compound. The important element is time. Time is also important to consider during retirement because retirement planning should be done to at least the age of 90. If you retire at 60, you have 30 years you need to be financially secure. We will assume you have enjoyed ‘a good family income that has providâ€" ed for a comfortable standard of living ‘and you would like to continue with that comfortable lifestyle during retirement. The first few years of Tetirement will be expensive because ow much money will you Hneed before you can retire comfortably? This is a quesâ€" tion that you will ask yourself more often as you approach retirement. Retirement costs could surprise you R Still time to enter charity golf tournament The 15th Annual Oakville Beaver Charity Golf Tournament, sponsored by the Royal Bank group of companies, will be held on Wed. Aug. 17th at Wyidewood Golf and Country Club. _ . _As in previous years, all proceeds for the tournament will go to the Oakville Trafalgar Memorial Hospital. Cost for the event is $150. per player or $600. per foursome. Hole sponâ€" sorship is also available at $200. per hole. For registration or further information, call Mike Pratt at 844â€"0771. NK _ NKR e PARTiCiPACTION MAKES PERFECT pafimm?t#’; Are You Unemployed and Receiving U.I. Benefits? Our decorators do too. The newly renovated Glen Abbey Club House and Restaurant is a virtual house of glass, creating a magical illusion of dining outdoors. The scenic beauty of the landscape filters in, gracing the greens and purples of our decor, furthering the fantasy. Only climateâ€"controlled comfort, and our fine selection of continental cuisine, subtly remind you you‘re inside. Please join us for fine dining. You‘ll savour every morsel...and every moment Sheridan College has a limited number of seats available in the following fullâ€"time programs designed for you to enter into specific trade or tradeâ€"related industries. * Industrial Maintenance Mechanic â€" 48 weeks e Welder Fitter â€" 40 weeks Aet only our food haes exquiisiie tieste Orville‘s sport Glen Abbey Reviaurant. A beauthful seting awaily you. Start Date: Location: Prerequisite: Contact: T ons ir decorators do too. C O L LE CE These programs are funded by Human Resources Development Canada. Orville‘s snack â€" YOUR INVESTMENT SHOPPERS 5000 NEW STREET (at Appleby Line) BURLINGTON 637â€"1377 your investment Shoppers Â¥.1.8. Financial Inc. Sheridan College Skills Training Centre 407 Iroquois Shore Road, Oakville Proof of Grade 10 or a functionalâ€"level test is required. Receiving unemployment insurance benefits. To register or for more information, call: (905) 815â€"4100. Monday, August 29, 1994 . GIC‘S â€" BANKS TRUST COMPANMIES URVEYED DAILY *HIGHEST RATES* OVER 350 MUTUAL FUNDS â€" Including Trimark, Mackenzie, Dynamic *BEST PERFORMANCE* Talk to George Mancini about early retirement packages severance pay pension windups. LIFE INSURANCE â€" Annuities, Group Ijlggfiance Accident Sickness PARE OUR RATES Fortunately, your investments have done well, and they are worth $1â€"milâ€" lion. We will assume that you will earn 10% on your investments and that you can live on $50,000 per year. Two of the numbers in the last paragraph might seem high. Earning 10% is higher than you would get with most fixed income investments, so your assets will have to be invested to allow for some growth. you plan to travel. Also, you might think that $1â€"milâ€" lion is more than you think you will need to retire. Generous numbers have been used on purpose in order to make a point. . Orville‘s 1 smile ie 1333 Dorval Drive, Oakville Glen Abbey Tel: (905) 844â€"1800 GOLF CLUB At first glance, it would appear that you are on easy street. Your capital will produce $100,000 annually based on the assumed investment return of 10%, and you only need $50,000 to spend. Therefore, the size of your account will appreciate each year and by the time you are 90â€"yearsâ€"old, your investments will be worth over $9â€" million. Your first reaction would probably be that of disbelief and your second reaction would be to plan to increase your spending. However, then you realize that you still pay income tax during retirement and, therefore, you increase your income requirement from $50,000 to $70,000. No cause for alarm; you still will have close to $6â€"million at age 90 and you can probably spend more and be safe. Just as you were going to conclude your retirement planning thoughts on a positive note, you remember one last item. How about allowing for inflaâ€" 490 Speers Rd. (between Dorval 4th Line) ‘5 Twin Size 2 Pc. Set Dept. Store Price $379:98 Double Set â€" $279 Queen Set â€" $329 10 Year Warranty Posture Guard Shop Early for Best Selection! Limited Quantities on someitems. *DiscountequaltoPST GST onallregular factory priced mattresses andsleep sets. Special value items exempt. *Payment due November 1994,0AC MinPur. $300. Taxes Exempt. Askfor Details Daybeds That makes sense; and based on the previous figures, there should be enough room for a little inflation. Inflation has been low recently, 2% in 1993 and a little less the previous year. However, inflation might increase, therefore, you assume an inflation rate of 5%. At this point, your retirement optimism begins to fade. Now that inflation has been includâ€" ed in the retirement income projecâ€" tions, you will run out of capital when you are 87 years old. Yes, you did start with $1â€"million, and we did assume that you earned a respectable 10%. This brings us back to the original question about how much capital do you need in order to retire? A simple rule is â€" the more the better. Peter Watson, MBA, CFP, RFP is the president of Peter Watson Investments Limited â€" an Oakville firm specializing in retirement planning, RRSPs, and investâ€" ment planning. He can be reached at 842â€" 7602. «97 Twin Size 2 Pc. Set Dept. Store Price $599:98 Double Set â€" $399 Queen Set â€" $449 15 Year Warranty ends spring Complete Mates Bed | While Supplies Last | WEDNESDAY, JULY 20, 1994 |IS YOUR DATABASE PAGE 10 _ PROTECTED? _ Includes Mattress © 1994 ArtPress International Rising rates bad news for bonds Many investors were shocked last winter when a surge in interest rates sent bond prices tumbling. Some bond mutual funds lost over 7% of their value in the first quarter of 1994, after three consecutive years of good returns. $ Twin Size 2Pc. Set Dept. Store Price $949:98 Double Set â€" $599 Queen Set â€" $699 25 Year Warranty PAPE‘S TIP: "Invest in bonds when interest rates fall, but stay on the sideslines when rates go up." Royal Elegance 1. Buy $1,000 government bond paying 7% a year and collect $70 a year interest. THE CONSEQUENCE: The bond price falls to the point where the return is comparable to what government bonds of similar maturity are paying, e.g. $870 at 8% now pays similar ($69.60) interest 5041 Fairview St. (at Appleby Line) 2. Interest rates rise. Government now offering bonds at 8â€"9% a year. Burlington Dept. Store Price $11149:98 Double Set â€" $699 Queen Set â€" $799 Lifetime Warranty $ Twin Size } 2 Pc. Set Lifetime Classic 3. No one will pay $1,000 for a bond with a yield of only $70 a year. Data Protection Group Call 905â€"849â€"0191 Includes Mattresses Protect yourself against unnecessary exposure to loses from theft, fire, .. bower failures, user error and equipment breakdowns Jan 4 _ benchmar $107.50 â€" federal 8% bon 1. Buy bonds or bond mutual funds when interest rates are in a long period of decline such as 1990â€"93. 2. Take profits when rates bottom out. 3. Stay out of bonds when interest rates are rising, and wait for the next bondâ€" buying opportunity. GRAPHICS SYNDICATE Bank rate Value of 20â€"yea benchmarl