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asae mwiiamiatb3 i mttgwbgwwacwa fit business and finance i m ifi 1 ill if is i li i ft ft 1 i 1 1 i looking at retirement in the next century until recently canadians have more or less taken for granted that a combination of government programs and employer pension plans would guarantee their retirement income but now planning for retirement has become more complicated because of a number of new unknown variables government programs the canadian pension plan will sur vive the federal government and the provinces are currently locked in debate over the future of the cpp but its clear there is political will on all sides to retain the cpp there may be changes such as rais ing the retirement age reducing some benefits and an increase in premiums we expect premiums will eventually level off at around 10 per cent of earnings the 1996 figure was 56 per cent divided equally between employ er and employee whatever changes are made to the plan it is clear that cpp payments will not be adequate to support the average person in retirement cpp payments should be regarded only as an income supplement one piece of good news is that the government is unlikely to impose a special tax on these payments universal programs will disappear the proposed seniors benefit rep resents a major shift it moves us from a universal oldage support program to one tied more directly to need the message is clear higherincome older canadians cannot expect any government support in future either directly or in the form of tax conces sions private pension plans because of the high cost of defined- benefit programs employers are looking at other options most of the new plans are either group registered retirement savings plans or defined contribution money purchase pension plans with no income guarantees the effect is to shift responsibility for retirement planning and invest ment decisionmaking onto the employee employees will have to decide where their retirement savings should go and ensure that the eventu al income will be adequate for their needs the climate has changed the min imal inflation and low stable interest rates we know today should continue into the early part of the 21st centu ry- these patterns are not just a cana dian trend its a worldwide pattern as governments and central banks learn how to manage economies more efficiently for retirement planning it means returns on rrsps and pension plans will be lower in the next decade than they were in the 70s and 80s the unknown factor as the federal and provincial gov ernments eliminate their deficits and start reducing their total debt burden their spending power will increase governments may use some of the money saved on debt servicing to reduce taxes or they may opt to build political capital by improving health care and education or sweetening the benefits offered to retired canadians if tax reduction is the choice youd be welladvised to use some of the extra money to add to your retirement savings program ultimately the most effective way to deal with the retirement uncertainty this article was submitted by that lies ahead is to increase your per- john mccallum from royal sonal savings trust education investment workshop confused about where you should be investing your rrsp 112 jhk siii i w5sfl i jfs xmm rvji3b hi wm v i ijf iipiv s il marek tanana rib ont date monday jan 20th 27th time 7 pm place markham library hwy 7 main st your host marek tanana call 41 62972793 to reserve your seat now 24 hour service questions you should be asking the bank or mutual fund salesperson this year ask q what guarantees are the advisors offering you this year ask q is my mutual fund creditor proof ask q can i crystalize my gain in any year ask q can you make my rrsp self completing if i am sick or disabled to find out the answers to the above questions that the bank or mutual fund salesperson wont tell you about attend one of my work shops mct financial estate planning confirm your attendance seating is limited 24 hr reservation 41 6 2972793 free seminar weekender january t8 4997 p11- edward jones trimark rrsp investing luncheon seminar date thursday january 23 1997 time 1200 200 pm refreshments and sandwiches will be served location edward jones 4591 highway 7 unit 110 unionville ontario rsvp to kathy at 905 3058507 seating is limited so please dont delay speakers dave redwood of atrimark larry stadnyk of edwaidjones agenda rrsp growth investments with trimark mutual funds serving individual investors member cipf free microsoft certification seminar learn how you can become a microsoft certified systems engineer in only 20 weeks mcse accreditation can make you one of the most soughtafter product experts in the information industry mcse is a highly comprehensive certification program for assessing and maintaining softwarerelated skills for technical professionals take advantage of this exceptional opportunity to launch o rewarding new career call now to register for our free seminar seating is limited guest speaker curtis skene microsoft canada tuesday january 28 79 pm rm el 29 progress campus centennial college 941 progress avenue scarborough call 416 2895000 ext 2816 microsoft productivity poinl authorized academic training program i centennialqmjige computer training sfrvlcfs en might q in the past i have purchased international mutual funds for the foreign component of my rsp upon switching some of my foreign mutual funds from an international equity fund to an emerging markets fund the book value of my foreign content increased causing me to exceed my allowable foreign content limit of 20 i had to sell an investment that i wanted to keep in order to get back to the 20 limit is there any way for me to sell part or all of an international mutual fund and purchase other international funds without causing my foreign content to exceed the 20 limit p chan unionville a in a previous investment insight we answered a question which dealt with how to increase your foreign content by selling a canadian investment that had appreciated as discussed then when most investments are sold within an rsp the book value of the rsp changes according to the proceeds of sale however scllinc appreciated foreign investments to purchase other foreign investments will result in increased book value of your foreign content causing you to exceed the 20 limit if you wish to actively manage your foreign investments inside your rsp perhaps your best choice of investment is to purchase shares of a mutual fund corporation dont confuse this with regular mutual funds which are structured as a trust by purchasing shares of the corporation you can switch between a class of shares for example international equity class to emerging markets class without triggering any increase in the book value of your foreign content as long as you remain within the same mutual fund corporation the benefits are that you will be able to actively manage your foreign investments and could surpass your foreign content limit of 20 significantly without attracting penalties from revenue canada also by increasing your foreign content you may reduce risk volatility and increase overall investment return over time you can fax your questions to investment insight at 2948880 or call dan galszechy or john niekraszewicz of fortune financial corp markham 2941200