From previous page (e.g., capital gains, interest and dividends) or retirement income (c.g., RRIF income, old age security and Canada Pension), except certain dis- ability pensions. RRSP Tip #7: When Should you make your RRSP contributions? _ You can make an RRSP contribution at any time dur- ing the year. Contributions during the first 60 days of a year can be deducted for the prior ycar or the current year. __A single contribution can be split between the two “2 years. + For the contribution to “be deductible for 1999, it . must be made by February The best policy is to con- tribute at the beginning of the calendar year, which will ‘:) maximize the compounding ~ Of the earnings within the RRSP Tip #8: What are the advantages of contributing to a spousal RRSP? “le Spousal achieve. a’ shift-.of future income’. from a__ higher income spouse to. 2 lower income spouse. ~\ This can result in signifi- ant overall tax savings when the®'spouses cash in their “RRSPs. It‘also may. reduce the clawback of the Old Age Security pension, and allow he receiving spouse to qual- fy,. for the Pension Income .” : Provided no withdrawal is made. from:spousal plans for “Jeast: two’ calendar years fter.. the’ year of your last contribution to any spousal .plan;. the. amount . withdrawn will be taxed in your spouse's’ ame. : Look into spousal RRSPs. you could reduce your: es now and in the future. : RRSP Tip #9: Can you borrow money to fake an RRSP con- © - “Yes, you’ can borrow to make’ an RRSP contribution, uk any interest you pay on the borrowed money will not ¢ deductible for income tax - For this:reason, it is gen- rally: better. to nse available ash? rather ‘than. borrowing. Ifyou have ‘to borrow: to nake the contribution, try to ‘repay the loan as soon as pos- ible to minimize the amount of non-deductible interest. Before . borrowing,. seek professional advice to ensure the“: benefits of making an ‘RRSP contribution outweigh ¢ costs of borrowing. RRSP Tip #19: What ‘is'a-self-directed | RRSP and what are its advantages? AS self-directed RRSP - withdrawal, the year. Your allows you to make a wider variety of investments. The imest commen self-directed RRSP investments are: shares and debts of public corpora- tions, B.C. and Canada Savings Bonds, mutual funds, and home mortgages. There is usually an annual administration fee for a self- directed RRSP. Such fees are no longer tax deductible. You should have at least $15,000 in assets in a self- directed RRSP to make it worthwhile paying an aver- age fee. If you’re looking for more control and flexibility over your RRSP investments, look into a self-directed RRSP. RRSP Tip #11: When can you withdraw amounts frem an RASP and what ave the consequences? Provided the funds ar not in a non-redeemable investment, you may with- draw any portion of your RRSP at any time. In most circumstances, you will pay tax on the amount withdrawn from an RRSP as it is considered income in the year you make the withdrawal. When you make your the financial institution will retain a small percentage as withholding tax. You'll get a credit for the tax withheld when you com- plete your return for the year. You may owe additional tax at that time, or be enti- tled to a refund of part or all of the tax withheld, depend- ing on your marginal tax rate and other tax withheld for RRSP Tip #12: Can you transfer your RRSP from one finan- ‘cial institution to another? Yes you can, but be aware that in order to transfer an RRSP account without trig- gering any taxes, the transfer must be payable to the new - institution in trust. for you. new. RRSP issuer arranges the transfer, Between ‘self-directed plans, youcan transfer existing dnvestments “in kind.” The trustee of your present RRSP “may charge a nominal fee against your RRSP for the administrative work involved -in the transfer. To avoid having the funds stuck in the mail, thereby losing earnings, you may be able to arrange to pick up the cheque from your present institution and deliver it to the new institution. Or you can arrange for a courie:. RRSP Tip #13: What fees are charged on an ARSP? You should be aware that there may be fees associated with your RRSP. Fees may be charged to your RRSP when © - you make a withdrawal, when you close your RRSP, ly io maximize - North Shore News - 35 St an’s interest administration fee, and may Mutual fund RRSPs have transaction fees. These are not tax deductible. or transfer the funds to a dif: to as high as $100. ferent RRSP issuer. 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