future.

«STEP ONE. What do you want out of life and your money?

If you live totally for today and plan to let the future take care of itself, then spend away and forget registered retirement savings plans.

Or if you are a successful in- vestor — building your own business or a real estate empire, for example —- RRSPs might only slow you dewn.

deduct your contribution (within limits) from your income. That saves you tax.

(b) The money in your RRSP can grow tax free.

(c) You must de-register your RRSP by the end of the year in which you turn 71, although you may take out your money sooner. As you get back your funds — in a lump sum or spread over many

BUSINESS

Strategy: the last-chance pension break. Ottawa has said 1989 will be the last tax year in which you may contribute to your own RRSP up to the total amount of all your pensions. You might choose this “rollover’’ but leave out $6,000

EXPECT . EXCELLENCE eS

29 - Wednesday, January 17, 199} - North Shore News

for a spousal rollover. (You might also want to leave out another $1,000 to benefit from the pension income credit.)

© STEP FOUR. Shop and com- pare before you buy; review what

11%4%

TERM DEPOSITS

Take RRSP business one step at a time

TAKE THIS RRSP business one step at a time. That’s the key to a smaller tax bill now and a larger nest egg in the

you have.

Decide what's right for you (term deposits, mutual funds, stocks, etc.), then find the place(s) offering a competitive return, low or at least reasonable costs, com- fortable risk and good service.

11%

years — you must add that money to your income the year you receive it.

Ideally, you will be in a high tax bracket when you put money into an RRSP and in a lower tax bracket when you get back the money. That way, the tax you pay will be less than the tax you saved. Also, the money will have grown tax free in the meantime.

NOTE: Contribution limits for both 1989 and 1990 are unchang- ed: still 20 per cent of your earned income — maximum $7,500 if you do not belong to a pension plan; $3,500 if you do, minus any money you put into the pension plan.

STEP THREE. Choose the RRSP strategies best suited to your situation. Talk to the RRSP ex- perts, those who specialize in retirement income planning. Do this now, well before the March 1 deadline for contributing for the 1989 tax vear.

Strategy: the spousal payoff. If you have a spouse likely to be ina lower tax bracket than you when you draw out the RRSP money, contribute to a spousal plan.

You get the (high) tax break now, your spouse pays (low) tax later. You contribute according to your limits, whether or not your spouse contributes to his or her plan.

If you have pension income, check into the special $6,000 spousal rollover. Also check the three-year rule, so you don’t in- advertentiy end up paying tax when your spouse takes out the money.

dollars and sense Michael Grenby

SE

Perhaps you want to pay off ex- pensive debts, or save toward a first or better home. If you are in the lowest tax bracket, an RRSP probably can’t help much; howev- er, if you are in a higher bracket, an RRSP strategy might be prof- itable.

e STEP TWO. Understand how an RRSP works.

An RRSP is an ordinary invest- ment with extraordinary tax features.

(a) When you put money into a savings account, term deposit, Canada Savings Bond, mutual fund, stock and other qualifying investment — and register that in- vestment as an RRSP — you may

JANUARY 22 - 25, 1990 Capilano College 12:30 p.m, N.E. Cafeteria

Monday to Wednesday - Chinese Films Thursday - Students In China: A Panel

7:30 - 9:30 p.m. South Campus A117

Monday - Behind The Gate Of Heavenly Peace (Tiananmen Square): Understanding China Today.

China’s Modernization: Oo Canadian’s Have A Rote?

Hong Kong mmigration: How Coes It Attect Us And Our Community? A Community Celebration: Music And Entertainment

Cafeteria, South Campus

Tuesday - Wednesday - Thursday -

For More Intormation:, Advising Centre 984-4990

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