16 - North Shore News — Wednesday, December 15, 1999

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ME OUT

Esicces

1199 Lynn Valley Rd.,
‘Lynn Valley Centre
North Vancouver

BUSINESS

Attention everybody
who turned 69 this
year: It’s time to start
some serious spending.

But first you must transfer
some, if not all, of your RRSP
money into a RRIF and/or
annuity by Dec. 31. Miss that
deadline, and up to half your
RRSP money will go to the
federal government.

Choice 3: Take some cash:
Lei’s say you will be in
the lowest tax bracket this
year but in a higher tax
bracket in 2000 and beyond.
Consider raking enough of
your RRSP as cash this year
to use up the lowest rate on
this taxable income, rather
than in the future, when you
would pay more tax.
Choice 2: the RRIF.
Otherwise, you will want

to consider an RRIF (regis-
tered retirement income
fund), which means you con-
tinue to manage your invest-
ments as vou did with your
RRSP. But unlike an RRSP,
you must take 3 taxable
income our of the plan each
year.

When you dic, any
remaining moncy may be
transferred tax-free to a
spouse (sometimes a child or
grandchild) or added to your
income that year.

Choice 3: The annuity:

Or you might consider an
annuity, which is like a pen-
sion — guaranteeing an
income (again, taxable) for
your life and perhaps a surviv-
ing spouse’s life.

You have little or no con-
trol over the money. When
the payments end, if you did-

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n’t live to your average life
expectancy, any remaining
money will go to those who
live longer than average.

Talk to a retirement finan-
cial planner in the next few
days. As reader D.A. warned,
“it took me nearly seven
weeks io arrange my latest
transfer of funds. Until now,
it never took more than nwo
weeks.”

Even though you may no
longer have an RRSP after
the end of the year in which
you turn 69, you may still
contribute to a spousal plan if
you have a younger spouse,
provided you have earned
income or carried-forward,
unused contributions.

If you don’t have 2
younger spouse or are unmar-
ried, and if you had earned
income this year, you could

ORE

E SPECIALS

that money...

make an over-contnibution to
your own RRSP before it is
wound up on Dec. 31, then
claim this as a deduction for
the 2000 tax year. You will
pay a small penalty on the
over-contribution but save far
more in tax next year.

Again, talk to a retirement

financial adviser well before
the Dec. 31 deadline in case
you could benefit from any
“use ‘em or iose erm”
approaches like these.
Mike Grenby ts a colusanist and
independent personal financial
adviser; he'll answer questions
in this column as space allows
but cannot reply personally -
contact him at P.O. Bax 50029,
South Slope R.2O,, Burnaiy,
B.C. V5J 5G3; email
mikeQgrenty.con and see pre-
vious columns at Mike's website,
wwgrenby.com