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WE LINK BUYERS AND SELLERS!
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Managing Your Money by Dean Smith
Is an RSP loan right for you - right now?
Most Canadians will depend on their RRSPs to provide financial support for their retirement. The amount of retirement income you'll have depends on taking action right now to make the most of the tax-saving and income-building your RRSP offers. Don't shortchange your retirement years and pay more taxes than you need to by failing to do one simple thing: making your maximum RRSP contribution.
Sure, the tax-filing deadline is months away, but now is the time to begin mapping out a strategy - perhaps including a loan - to take full advantage of your RRSP contribution room. Check the Notice of Assessment you received from CCRA after filing your tax return last year to find out how much contribution room you have, and make plans to fill it up as quickly as possible because: (a) contributing to your RRSP can increase your tax refund. Plus, your money will grow tax-deferred- and that can add up to a very significant amount. For example: suppose your 2005 RRSP contribution limit is $3,000. Depending on your tax bracket, that could generate nearly $1,500 in immediate tax savings while adding to the tax-sheltered nest egg growing in your RRSP. In fact, over 30 years at an annual compound rate of 8 per cent, your one-time $3,000 contribution will be worth $30,188 on a pre tax basis! And (b) there's no doubt that your most effective RRSP strategy is to maximize your contributions every year, and here's the good news: you can always catch up for years past when you were unable to make your maximum contribution. The government allows you to accumulate and carry forward all your unused contribution room from previous years (since 1991). And, the sooner you make up for lost time, the better - because you'll have more money growing faster inside your tax-sheltered RRSP.
Financial institutions often offer RRSP loans at the prime rate or lower, so borrowing to ramp up your 2005 contribution can make good sense. Say you borrow $10,000 for one year at 5 per cent and make monthly payments of $856 to pay off your loan over 12 months. If your marginal tax rate is 40 per cent, your $10,000 deduction will generate $4,000 in immediate tax savings. And over 30 years (at an 8 per cent rate of return) your extra $10,000 RRSP contribution will grow to $100,600 on a pre tax basis. All this for a total interest cost of just $273 for your catch up RRSP loan!
If borrowing to invest in your RRSP is right for you, the time to map out your strategy is now. Your financial planner can help you decide if an RRSP loan can work for you - and, if so, how to get the maximum benefit from it. This article has been presented as a general source of information by Dean Smith, who has a Financial Planning Practice with Investors Group in your area. For more information on this topic or any other financial matter please call Dean at 383-5959 or 943-6828.
Email Dean.Smith@investorsgroup.com
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Call 383-5331, fax 383-5882 or email bboon@downhome4.com. All area codes 204 unless otherwise noted. These ads appear in Down Home Community Newsletter, Down Home This Week, and at www.downhome4.com . When your item sells, please let me know so I can remove your ad.
Licensed Home Daycare: Snacks & drinks provided, open 7 am-5:30 pm, lots of room inside & out. 322-5760
TO GIVE AWAY - older fridge - great for garage or basement. Works well. Pick-up only. 322-5429 ♪
FOR SALE: Light oak wood grain youth bedroom furniture set: 3-drawer mate's bed c/w mattress & headboard, 5-drawer chest, night stand, desk c/w hutch & chair; excellent condition. $500 OBO. 322-5303 ♪
FOR SALE: 1926 Heintzman upright grand piano, good cond. $900.00 obo. 467-5241 ♪
FOR SALE: Hand-crafted 8-gun cabinet, approx. 6 ft. high x 37" wide x 12" deep. $100.00. 383-5551 ♪
FOR SALE: Older upright piano - Alexandria - beautiful dark mahogany finish $750.00 obo 322-5429 ♪
FOR SALE: Looking for loving home for 2 year old palomino gelding. Leads well - loves people. Shots up to date including WNV. $700.00 obo 322-5429
FOR SALE: 1996 Chev Suburban, safetied, exc. cond.; asking $11,500.00 obo. 322-5654 ♂
FOR SALE: NEW Girls Sears Baby 1 pce snowsuit. Navy blue with sunflower accents and white trim around hood. Mitts and booties detach. Fits up to 30 lb child, approx. 3 1/2 feet tall. e-mail picture available. $25.00 Andrea 375-6755 ♂
FOR SALE: Disease-free elm firewood; excellent burning hardwood seasoned at least 18 - 24 mo. 4-ft lengths, 7-14 inches diameter OR 18-30 in. lengths, 2-6 in. diameter. U-pick. $55 per 1/2 cord. 322-5058 ♂
FARM MACHINERY FOR SALE:
7-41 Westfield auger w/motor $950; 60 ft. Inland harrows $2000; 510 Walinga grain vac $6800; Feterl Rotary grain screener $1800. Phone 697-3416 or 981-0656 ♂
FARM MACHINERY FOR SALE:
28 ft. White PT swather $1500; Bergen
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6000 swather carrier, lights & brakes, $9000. Ph 697-3416 or 981-0656 ♂
FOR SALE: Stand-up stepper with arms; has digital display, tension adjustment and many more features. $75.00 obo. Marci 322-5173 ♂
FOR SALE: Home and Car Chargers for Motorola Cell Phone Model 120C. $15.00 for both. Car charger brand new. 322-5269 ♂
FOR SALE: Purebred Miniature American Eskimo dog, 1 year 4 months old, 12" tall, house-trained. $350.00 obo. 467-2898 ♂
FOR SALE: One inflatable pool, inside dimensions about 4 ft. by 6 ft., $20.00. 322-5625 ♂
FOR SALE: Cooper Air Powered 66" Air Hockey Table (35"W x 71" L). Includes pucks and pushers. $200.00. 322-5103 ♂
FOR SALE: Two judo gi's (uniforms), one child-sized, one suitable for adolescent or small adult. 383-5017 ♂
FOR SALE: 1990 Honda Civic hatchback, 5 sp. std. 322-5625 ♂
FREE to good home: Lovable senior tabby indoor cat, neutered male, great company for any senior. 322-5781 ♂
FOR RENT avail. Oct. 15, 3-br house in Woodlands. Large kitchen & living room. Preference given to yearly occupant. $775.00/mo incl heat & appliances. 322-5781 ♂
FOR SALE: Portable color TV/VCR for van (plugs into cigarette lighter). Like new. $100.00 467-8067 ♂
FOR SALE: 2001 Chevy Venture ext. van, 7-pass., 3.4 V-6; P/W/D/Mirrors, keyless entry, AM/FM/CD, child seat; lady-owned, non-smoker; 125,000 km, never winter-driven. Asking $10,900.00 646-2669 ♀
FOR SALE: 1990 Ford Probe (red), 4 cyl, 2.0 litre, pw, pd, a/c tilt, starter, 2-way alarm, 170,000 km; no safety. $1750.00 obo. Sean 467-8908 ♀
FOR SALE: 49 cc Pocket Rocket bike, white in colour, brand new condition. Asking $400.00. 479-1532 or 467-5953 ♀
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