Invest Now, Safe Later!

Following recent headlines regarding Paul Martin's desire to abolish mandatory retirement, the issue of the pension is a hot topic for Canadians and their futures. Most Canadians can not financially survive after retiring. RRSP's can be the answer to financial security.

(PRWEB) January 7, 2004 --With statistics revealing that approximately 20% of all seniors, particularly women, have incomes below Statistics Canadas low income cut off point and the security of Canada's Plan is no longer guaranteed, 2004 is set to become the age of $ change $.

For many years, Canadians have enjoyed a relaxed and confident approach to retirement planning, yet this trend is about to change claims Clarica Insurance advisor, John Ramage. With an aging population and increased life expectancies taking their toll on the Canadian Pension Plan system, the public will be forced to adopt a much more independent approach to financial planning in the coming year, one similar to that in the US. Indeed, investment and private pension planning will become a necessity rather than a luxury for the public at large and financial planning their number one priority for the New Financial Year.

Shocking statistics reveal that only 5% of the Canadian public benefit from RRSP investment planning at the present time. And despite the mandatory retirement age set at 65 in Ontario, almost one-third of workers who claimed to have retired from their career jobs returned to the workplace within two years in order to survive financially.

Says John Ramage, By 2021 an astonishing 18 percent of the Canadian public will be 65 and even the government does not perceive how current systems are going to accommodate these baby boomers. Indeed, this not just an issue specific to the pension system but to healthcare as well. And whilst Paul Martin is pushing against mandatory retirement legislation on a Federal level, how many of us revel in the thought of working after 65? Undoubtedly this debate is set to become the hot topic of 2004 on a national level and is an issue currently being overlooked by people of all ages and backgrounds. Indeed, if the mandatory retirement age is abolished, the guarantee of a Canada Pension Fund will be in jeopardy for all workers and the average retirement dream a distant memory."

John Ramage has already noticed an increasing number of calls to his office regarding private pension planning and believes that the New Year could see revolutionary growth awareness on this issue. Indeed, even the federal government decided to stimulate long-term savings and help Canadians think about a more financially secure retirement by authorizing Registered Retirement Savings Plans. Contributions to the plans, up to a specified limit, are made tax-deductible and the accumulation inside the plan is also tax-deferred.

Given that any Canadian resident can hold an RRSP, including students, teenagers and the unemployed, there is no reason for anyone to be without financial security at retirement age. It makes tremendous sense to start a plan early in life and contribute to it regularly.

So, whilst for most consumers, the immediate financial burdens of daily life are their number one concern, we should not be putting off until tomorrow what needs to be done today. Invest now, be safe later.

                                                                
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Fact Sheet

- The OAS and GIS, combined with CPP/QPP, account on average for about 50 per cent of seniors' incomes in Canada.

- Among seniors, unattached women are the most likely to have low incomes - 49 per cent in 1997. Historically, most women did not participate in the paid labor force to the extent that they would make sufficient contributions to the CPP.

With an RRSP, savings grow faster because earnings build tax free. Contributions aren't taxable until they are withdrawn, so taxable income is immediately reduced. When money is withdrawn at retirement, employees may save more on taxes if they are in a lower tax bracket when they make the RRSP deposit.

You can put away 18% of your previous years earned income to a limit of $14,500 (new for 2004) a year less any pension adjustment plus any unused contribution room from previous years. This can lower your tax bill two ways: because the money you put into an RRSP isnt counted as income and because without that income you may lower your tax bracket. The money you dont put away this year under your contribution limit is rolled over to next year.
RRSP regulations have been broadened to the point where you can invest in many different asset classes: stocks, bonds, money market funds, mutual funds, annuities, and income trusts among others.

The regulations also allow you to hold foreign securities within an RRSP. At the present time, 30% of your RRSPs value can be foreign content". This can be an advantage because it allows you to diversify your investments outside Canada and benefit from worldwide opportunities as Canada accounts for only 3% of the world's economy.

For further information please contact: Valerie Marasco at Firedog Public Relations & Marketing at 807-767-4443, by email at Valerie@FiredogPR.com, or by fax at 807-767-2916.

Valerie Marasco
Owner/Director
Firedog Public Relations & Marketing