Deedes eat arate ving contrib Fron previews pase charge management expeits- es, and you may also pay a front-cnd or back-end tdeferred sales charge) load tee. Before vou decide to invest in any RRSP, find out what the annual costs are. and the fees for winding up the plan. RRSP Tip #14: RRSPs: make your contribution eariy Trois a great fone term advantage to contribute te an RRSP cach vear, especially if vou are voung and a long wav tren: retirement. It is advisable to contribute carly in the vear so yeu start the tax-free carnings within the KRSP catlier, Also consider month- ly paymeats into an RRSP throughout the year. compounding — of Ones nade. contributians within vour deduction finit or to an excess of $2,000, ead be carried forward inder inttely, without penalty. for deduction in fiture vears this could be a substan: tiah advantage if vou make the deductions tn years when you will be tn a higher tay beecket. For your RRSP contribu tion to be deductible for a particular tax vear, the dead fine is the 60th day of the followin vear. Fort Pagg tan vear the de ‘dle 1s February 29, 20060. RRSP Tip #15: RRSP contributions do not have to be deducted in the year they were made Your RRSP deduction limit is shown of your most recent Netce of Assessment, Good advice is worth listening to. Ask us about investing. It's not casy making investment decisions. That's why we offer a financial expert to all our customers, So go ahead. Ask us to expiain our high rate RRSP Term Deposits, ! Mutual Funds, Self-Diree RRSP loans, or any other financial topic that comes to mind. Before you know it. you'll be making FRC the right decisions. And that’s something we all want to hear, We're nota bank. Were better ire TaOkGtA § be Coste ae FAP Ss RNTCRS ZT ear Koap SUPA ES EON rn $1 CARES ONOR OEE Se CR tess orien wigs es eer coum rere may reduce tax Or VOD Cn aay he tele phen Canats Clusters and Revenue Agenes’s FIPS une toll tree at F-S00: 267 OYN9 Tou wih need vour 199S tan return in trot ot you when vou call. Any RRSP contnisctien made within this deduction limit, plus an overcontunibu- ben cf up te $2000, can be carried forward without penalty and deducted ta future vears, Hf yvau know vou are going to be ina higher tay bracket in) one oor more future vears, vou may aveid far more tay by carving von tributions — torward and deducrpy them ino these years. RRSP Tip #76: What if you contribute ico much to your RRSP? An excess contribuuen as calculated as che total of all of your undeducted RRSP contributions, minus vour current: RRSP deduction limit and an allowable over- contribution of — $2,000. Excess contributions are sub- ject toa 1% per month penal- ty tax und they are with: drawn. With Canada Customs and Revenue Agency approval, you can generally withdraw the excess without raxation, Keep in mind, the penalty situations are complex. Consult the advice of a pro- fessional. RRSP Tip #17: A retiring allowance and your RRSP A retiring allowance is a lump sum or suns of sever- ance paid to you by your employer, at or after your termination, in) recognivon of your loss of employment. Ac cumulated sick leave cred- its paid also qualify. The portion of a retiring allowance eligible for shelrer- ing into your own RRSP can either be transferred directly (ne income tas deducted ), or up te 100% can be con- tributed in the vear of receipt or within 60 days after that year. The maximum that can be sheltered is: @ $2,000 for each full or partial calendar year of ser- Vice with) your current employer prior to 1996, plus @ an additional $1,500" for each full or partial calendar year prior to 1989, with your current employer, in. which you were nota member of a pension plan or deferred profit sharing plan, or years for which your employer's contributions to such) plans have not vested in vou. The transfer of a retiring allowance to an RRSP does not affect vour normal RRSP deduction fimit. RRSP Tip #18: Transfer of unused Registered Education Savings Plan income The subscriber yeontribu- tor) under oa) Registered prior bfgeation Savings Phas can transfer ap te S30,0G0) or ae cttliatcad mMeome from an ReSPote va RRSP oan the manic oof the subscriber or their spouse, The following conditions must be met: MB Uhe RESP must have been iw oexistenee for at deast 10 vedas. All beneticiaries under the RESP must be at least 21 years of age and not cligible to recetve education assis- lance payinents. G@ Only amounts transterred within the subscriber's RRSP deduction limit will avoid LaANation There tsa special 20% sur: tax on any excess accumulat- ed income withdrawn by the sabscriber RRSF Tip #19: What kinds of investments can be purchased with the money that you contribute to an RRSP? It depends on the type of RRSP vou chouse. The most common is the deposit-aype RRSP, in which your choices are term deposits or GICs, or a daily interest account. You can invest directly in most mutual funds as an RRSP. With self-directed RRSPs. your choices include B.C. or Canada Savings Bonds, pub ficly traded stocks and bonds, mutual funds, murtgages and even a limited investment in the shares of Canadian small business corporations. You can invest up to 20% of an individual RRSP in for- eign or non-Canadian invest- ments. Like any investment, your choice will partially depend on the fevel of risk you are willing to take. RRSP Tip #20: What percentage of RRSPs can be invested in foreign property? When you invest in’ an RRSP, only 20% of the total cost of all the assets in your plan can be invested in ter- eign property. This limit applies to cach individual RRSP. Foreign property includes such things as shares and debr obligations of com- panies listed on most foreign stack exchanges, and debt oblig sions of certain foreign governments. The 20% limit is based on the cost of the assets when they were purchased. This means that if vou invest $1,000 in an RRSP, the for- eign property fimit is $200. Even if the assets rise in value, the foreign investment fimie is still based on the original cost of the assets. Thus, ever with a market value of $1,500, the foreign property Rout would sall be $200. Each time vou sell or pur- chase a Canadian asset, the foreign percentage of your plan can change. Be careful when sou sell a Canadian asset that it does aot leave you over the foreign proper- cw Hinat