14 — Wednesday, January 27, 1999 — North Shore News Let North Shore’s financial advisors help you build a secure financial future with tailored RRSP solutions like FLEXterm”*. A favourite with our members, FLEXterm .0% Annually to give you complete flexibility, FLEXterm is fully cashable without penalty after 60 days. * Rates subject to change without notice. Ausilable unsil March 1, 1999. guarantees you a premium rate of return for 2 years. And, Absolute Accounting Professional Services Including: es You're the pro in your field. Why not letusdo => our accountin: ‘Fel ge y Lyon SSeS 929-1245 Professionally for you! cin Focus on financial Mike Grenby Contributing Writer IT’S that money time of the year again — RRSPs, income tax and similar delights. Here’s a quick cradle-to- grave review to help you focus on managing your finances even better. @ Teach ‘em young. Teach children up to their abilities, and don’t underestimate them. By the time our son Mart was three, he knew if he Jet Mum cut his hair we could then spend the money saved at McDonald’s. Allow the child to make his or her own spending deci- sions. Dan’t comment or crit- icize. It might be hard to keep your mouth shut, but experi- ence is usually a better teacher than a parent. Ifa child can work for your sideline or full-time business, including revenue property, pay the child what you’d pay an outsider for those services. You deduct the expense from your business or rental income. That shifts the income into the child’s likely zero tax bracket. Introduce the youngster to basic investments — Canada Savings Bonds, term deposits and GICs; show how much extra interest the child will ¢arn over a year, compared to leaving all the money in a sav- ings account. Look at mutual funds and perhaps individual stocks in things the child can relate to (like Disney, Coca-Cola, toy companies and so on). Possibiy co-sign for a teen’s credit card with a low limit, and monitor the card’s use. / NEWS photo Paul MeGrath WHETHER you're just learning to waik or just about to retire, money man Mike Grenby has plenty of savings tips for you. In most cases, cven if che child pays no tax he or she should file a tax return each year there is earned income. That will build up RRSP con- tribution “room” for future use. ® Save and invest. Avoid debt overload at any stage of your life. Make sure you can afford — and are willing to pay —- the cost of borrowing. When a debt is paid off, redirect the former payments to the next most expensive ne 25 years’ experience in investment, retirement and estate planning Ask us about: = ARSPs, ARIFs, LIFs = Self-Directed Plans => RESP Programs © Mutual Funds/Seg Funds = Managed Portfolios = Private Wealth Management SELES SSP MOEN GiIC Rates, GiCs, RSPs, RIFs, LIFs becallescal hecal|lreallisal + "Rates subject to change without notice. Representing a wide array of financial institutions Member: Fed of Cdn Indep Depasit Srokers Keleunen investaeats fas. Securities 1205-675 W. Hastings St. Vancouver 688-9577 461-100 Park Royal S. WestVanc 925-3101 Building betier retirement incomes since 1974 “If you own a home and find you are running out of money, could you rent out part of your place?” debt — or to a savings/invest- ment program. One couple invested their former $1,327 monthiy — pay- ments and used their “debt dis- cipline” to become million- aires. Paying themselves instead of their creditors gave them, with eight per cent annual over 25 years, $1.3 mil- lion. Use the RRSP to save tax now and shelter the growth of the GICs, mutual funds etc. in your plan from tax. Start soon and let compound interest work its magic for you. If you don’t have enough money to buy a home, see if family members or even out- side investors will give you a loan or share in the purchase. Perhaps buy a home ~with a suite — and at first live in the suite while you rent out the * main part of the place. Take out a mortgage with a 20-ycar rather than a 25-year amorti- zation (payoft) period — and save tens of thousands of dal- lars in interest for an only slightly higher monthly pay- ment. Try to develop a home- based or other business. Having a self-employed side- line could enable you to retire sooner — using your self- emploved income to supple- ment a smaller pension, for example. Review life and other insurance policies. If you are healthy, ask your agent or company if you qualify for a lower premium on your pri- vate life insurance. Also check a competing company to sec if switching would make sense and save dollars. @ Spend and enjoy. As retire- ment approaches, take a dry run. Estimate what it will cost you to live after retirement, and try living on that amount while you are still working. Explore new areas if you plan to move. You should almost certain- ly be making maximum con- tributions to your own RRSP. If your partner will be in a lower tax bracket than you in the future, contribute to a spousal plan. Gradually begin to rearrange investrnents so they will provide income once you retire -— especially if you take carly retirement. Shift from inutual funds or stocks you bought mainly for growth to those which also provide income. Sell the least desirable rental property to pay off the mortgages on other proper- ties. To help counter inflation, allow RRSPs/RRIFs to keep growing tax-free as long as _ you don’t need the money. However, if you expect to withdraw funds in the near future and will then be in a higher tax bracket, consider taking money out sooner to benefit from your current lower tax rate. Helping adult children with housing or possibly a business can help lower your income taxes — but get expert advice and put every- thing in writing. Continue to — diversify. Have a mix of GICs and bonds to provide income. Especially outside your RRIF perhaps also have some quality stocks or mutual funds invested in such stocks; they should provide a long-term hedge against inflation plus tax breaks on dividends and capital gains (compared with paying full tax on interest). If you own a home and find you are running out of. money, could you rent. out part of your place? Or consider a reverse annuity mortgage or similar home income plan. Cheek your will and power of attorney are up to date. - Look at ways to reduce tax on death (a final spousal RRSP contribution, how assets are passed to 2 spouse, filing more than one tax return). Ask Revenue Canada for its guide, Preparing —s Returns for Deceased Persons. — Mike Grenty's award- winning money column, first published in 1973, appears in the News cach week.