The following text may have been generated by Optical Character Recognition, with varying degrees of accuracy. Reader beware!

- 7-i The Canadian Champion, Tuesday, February 15, 2005-11 ty~ ~ Spousal and common-Iaw partner RRSPs leverage the power of two (NC)-Canadian couples con make a significant difference to their tax buis and save more money for retirement by investing n a spousal or com- mon law partner Registered Retirement Savings Plan (RRSP). The recently amended Incarne Tax Act now recognizes both married couples and common law partners and provides ben efits for both through a spousal or com mon law partner RRSP. This allows the high- er-income partner ta contribute ta an RRSP owned by the lower-income partner, helping to equalize retirement assets and reduce the retirement income gap. This s most advantageous for couples earning different incomes, whereby one parfner may be earning much leas than the other. The primary reason for establishing a spousal or common law partner RRSP s to allow for income splitting at retirement, Sharing or splifting some 0f these retire- ment savings means that when the funds are withdrawn from the plan at retire- ment, the funds are taxed at the rate of the lower-income spouse or common-law partner. This con reduce the couple s taxes at reifrement because they will likely pay less tax by withdrawing the same amount 0f j income from two amaller retirement pools thon tram one larger one. For example, if one partner expects ta have $68000 in pre-tax RRSP-generated income af retirement, taxes would be about 822,440 0f the marginal fax rate 0f 33 per cent . But if the couple receives 834,000 each instead, taxes would only be about $8500 each, 50v- ing them more thon 85,000. A spousal or common 10w partner RRSP effeclively allows a couple f0 engage in income spliffing upon refirement, says Judy Thomson of BMO Mutual Funds, 'This strategy con pay off in fhe long- term by saving you and your partner thoubunds cf dollars in taxes. Spousal or common-law partner RRSPs con have other benefifs as well, especiaîly if the couple differs in age. For example, if a husband s older, he will obviously reach the maximum age limif for RRSP contributions before his wife. However, he con stili take advantage 0f any un~jsed RRSP deduction room by contributing ta a spousal RRSP. The hus- bonds taxable income s then reduced by the amount contributed annually, tax-shel- tering the savings and accrued income until his wife turns 69 An investment professional ot your local bank branch con review the benefits 0f O spousal or common-law partner RRSP and explain how this investment vehicle relates to your next fax return. Based on a personal marginal fax rate n Ontarlo for 2004. Information provided by BMO Retail lnvestments. For more information visit your nearest BMQ Bank 0f Montreal branch or log on ta ww'w bmo.com/invest- ments. News Canada I I I 1t'~ simple, really. llow well YOU retire (IeI)ends, on how ~ell y 011 plan Ioda>. And it'~~ neyer too early to start. Because the more lime you give yoîjrself, the hetter off ~Ot1 ('an be. Xi F¾lward ,lones. j)reparing for retîrement taking a long-terni persîleetive. We reeolnlnen(l bu ying qualit> mnvestmenîs and hoI(Iing theni. It îîîay î~oî sound exeiîîng. but waîI jintîl ou retire. To find oui wliy it inakes sense to start getting ready for retirement now, eau to(Iay. Randy Broten Iniesiment Represeittallie 4 310 Main St. E. * Suite 103 Mihon, On L9T 1P4 905-864-6959 WWW . e(lwar(ljones . rom Member CIPF I - YOUR FINANCIAL PLAN: D Marry rich. Really rich. D Invest in a mutual fund that buys companies at bargain pnces. MACKENZIE CUNDULL FUNDS. The Cundili appmditoinvestîngustoseektobuycompanies at fire-sale prices. Sometimes, cheap oempanies are cheap for a reason, but often, they are simply out of favour or misunderstood, and therefore undervalued. Cundili analysts don't try to predici eamings or market direction, they simply estimate the value of a company's assets, and try to buy the stock for a healdiy discount to that value. In other words, they strive to buy a dollar for fifty cents. Talk to me about induding Mackenzîe's Cundili Funds in your plan. Advising Clients Since 1978 HEIENA DONAWSON, liIOMAS F. TAMBIYN, cn~ au, CJLFC &Sc ~FP DONALDSON Trasi~ 101-310 Main SL East Milton, ON L9T 1P4 Tel: 905-875-3366 Fax: 905-875-3574 info@donaldsonfinancial.com www.donaldsonfinancial.com Choose Wisely. Mackenzie ~ I I I i Commissions, trailing commissions, management fees and expenses ail may be assodated with mutual fund investments. Please read the prospectus before investing. Mutual funds are flot guaranteed, their values change frequently and past performance rnay nothe repeated.Thisad has been paid for in part byMackenzie Finaridal.