Financial Edition
2012
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When it comes to RRSPs, there’s not one right answer… But there’s an answer for you. Let’s talk about it.
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To retire comfortably, know which moves to make — and when to make them We all want to enjoy living a comfortable retirement. But to do so, we need to make different moves, and consider different issues, at different times of
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Don’t have the cash for an RRSP? Do you have RRSP contribution Room? Take advantage of our “Take Ten RRSP Loan” and take up to 10 years to repay. For all your RRSP needs speak with one of our qualified Investment or Loan Specialists today!
517 Main Street Chamney Platz P.O. Box 1508, Humboldt, SK S0K 2A0 Tel: (306) 682-2060 cbowman@coleenbowmancga.com
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our lives. To help illustrate this point, let’s look at three individuals: 1. Alice, who is just starting her career; 2. Bob, who is nearing retirement; 3. Charlie, who recently retired. Let’s start with Alice. As a young worker, she most likely has 40 years ahead of her until she retires. Yet she realizes that it’s never too soon to start saving for retirement, so she has already started contributing to her Registered Retirement Savings Plans (RRSPs) and company-sponsored retirement plan. And because Alice has so much time ahead of her, she has decided to invest aggressively, putting much of her contributions in growth-oriented investments, such as equities and equity mutual funds. The market will certainly have its “dips” in the future, which can cause her account values to rise and fall from year to year. But the longer Alice holds her investments, the less of an impact market declines should have on her RRSP and other accounts. Now let’s turn our attention to Bob. Because he’s within a few years of retirement, he has some key decisions to make. For one, he must decide whether to change the investment mix in his RRSP and other
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RBC INVESTMENTS
For the boomer generation, the concept of saving for a comfortable retirement has always been an important goal. Many boomers are in their peak earning years; some are at or near retirement; and with volumes of financial and investment information available, awareness of the need to save is greater than that of any previous generation. The truth; however, is that it’s not too late. By implementing some catch-up strategies, it may still be possible to reach your retirement goals. To catch up on retirement savings, consider doing the following: • Make Regular Contributions to your RRSP: Sometimes, people who are behind in their saving are reluctant to even explore strategies that could help them get back on track. Why? Because they think they can’t afford it. One approach is to start slowly, setting aside small amounts. Consider an automatic RSP contribution program to make these small steps a priority in your financial life. • Carry forward unused contribution room: Investors who don’t regularly maximize their annual RRSP contributions miss out on significant tax-deferred growth potential. The good news is that you can carry forward any unused contributions to future years. • Reduce your debt: Making regular payments to reducing debt can make it difficult to find money for an RRSP contribution. Generally, the best strategy is to start reducing high-interest debt such as credit card debt, then focus on lowerinterest debt such as a mortgage. • Take out an RRSP loan: In certain situations, it makes sense to take out a loan to top up your RRSP. For example, if you have unused RRSP contribution room, you can borrow money to catch-up, and then use the tax savings to help repay the loan. • It may be you or someone you know who may qualify for the Registered Disability Savings Plan. Some huge grants/bonds are available from the government. Call me and I will explain. While it’s important to create a plan to help you meet your financial goals in retirement, it’s also important to focus on how you want your life to look in retirement. Take a step back from your financial worries and look at where your retirement future is going. It’s possible that anxiety about retirement savings can be put into perspective once your life plan is considered. For more information about RRSPs, or to speak with a financial planning professional, please visit any RBC Royal Bank® branch.
Dan Tratch, RBC Investments Financial Planner
Humboldt 682-8316 • Lanigan 365-5000 Wadena 338-5550 8 ECT Friday, January 27, 2012
383-4155 327-4728 338-3211 364-2057
accounts. Because Bob doesn’t have much time to overcome market volatility and wants to maintain the gains he has already achieved, he may decide to become more conservative with his investments. As a result, he may choose to move some of his stocks to bonds and other fixed-income securities. But he doesn’t abandon all his growth-oriented investments. Bob realizes that he may spend two or three decades in retirement and will need to stay ahead of inflation. Our final investor is Charlie, who recently retired. His biggest concern is outliving his financial resources. As a result, he may need to consider a variety of moves. For starters, he should determine when to start taking his Canada Pension Plan or Quebec Pension Plan (CPP/QPP) and when to begin taking withdrawals from his Registered Retirement Investment Fund (RRIF). Charlie, like all investors, must convert his RRSP to an RRIF no later than December 31 in the year he turns age 71. After deciding when to start taking withdrawals from his retirement plans, he’ll also need to decide the appropriate amount to withdraw from his portfolio to help cover expenses. When he does, he will also need to adjust for inflation. In addition, he’ll need to consider whether income guarantee solutions, such as an immediate life annuity or a segregated fund with a Guaranteed Minimum Withdrawal Benefit, would be beneficial to provide him with an income stream he can’t outlive. Finally, Charlie might need to rebalance his overall investment portfolio to provide himself with more income. For help in making the types of choices described above, work with a financial professional. But in any case, you need to be prepared to take the right steps, at the right times so you can live in retirement on your terms. Copy courtesy Edward Jones
RBC Homeline Plan The RBC Homeline Plan® account is a smart, convenient way to manage all your personal credit, from your mortgage to outstanding balances on loans and lines of credit. If you’re an existing homeowner with at least 20% equity in your home, or if you are looking to buy a home and have a 20% down payment, this may be the right solution for you. With the RBC Homeline Plan, you have access to our Royal Credit Line® and Royal Bank® mortgages all in one plan, which you can designate for different needs - a new car, a vacation, your child’s education. It’s a great way to pay off your debt when you want to, while keeping your interest costs low. You could save hundreds, even thousands, of dollars in interest and improve your cash flow. Let equity in your home work for you! There are lots of ways the RBC Homeline Plan can help get your home equity working for you. For example, you could finance home renovations, such as a new kitchen, bathroom, deck or simply a fresh coat of paint - improvements that increase the comfort and value of your home. And consolidating your outstanding high-interest credit using the RBC Homeline Plan will enable you to take advantage of lower interest rates that will save you money. Save hundreds of dollars in interest and improve your cash flow If you have higher interest credit cards, loans and/or a mortgage, an RBC Homeline Plan can free up hundreds of dollars in extra cash flow each month. And, if you choose to diversify your mortgage, you could save thousands of dollars in interest costs over the life of your mortgage. As you pay down your balances, your credit automatically becomes available to you again Once your credit limit is set, you can borrow any time, up to your available limit. As you pay down the amount you owe, your available credit automatically increases up to your limit. No need to reapply for credit or contact us; it’s an easy way to manage your own credit needs. Let interest rates work for you by diversifying your mortgage Mortgage rates fluctuate and it’s hard to know whether you should choose a variable rate or fixed rate. The RBC Homeline Plan gives you the best of both worlds. It allows you to diversify your mortgage and enjoy the advantages of both variable and fixed rates. The variable portion lets you take advantage of potention long-term savings, while the fixed rate portion protects you if rates rise. Talk to us today to find out how the RBC Homeline Plan can help you meet your financial objectives! Get more flexibility to access funds when you want - for what you want Your RBC Homeline Plan give you the flexibility to manage your own credit needs. You can access your funds easily, whenever you need them: • Use RBC Royal Bank Online Banking • Make withdrawals at any ATM • Write cheques • Visit any RBC® branch Convenient consolidated reporting You’ll receive a consolidated monthly statement updating you on all aspects of your plan. No need to refer to multiple statements - with an RBC Homeline Plan, all the information you need is right where you need it. If you bank online, you can also review all the details of your RBC Homeline Plan - including your mortgage and credit line - in one consolidated view, making it easy and convenient to track and manage your credit use. Protect yourself and your family With the RBC Homeline Plan, you have access to life and disability coverage, which can give you added peace of mind. Our low-cost solutions can help ensure that your RBC Homeline Plan is paid in full in the event of your death. And if you become disabled, our HomeProtector® Insurance* can ensure that your regular payments continue to be made. *This group of insurance programs, underwritten by The Canada Life Assurance Company, are subject to terms, conditions, exclusions and eligibility restrictions. Please see the program booklet for full details.
Michelle Lees-Senko
Mobile Mortgage Specialist Serving Humboldt, Lanigan & Watrous Area
michelle.lees-senko@rbc.com 306-231-5230
Do you have a financial plan for 2012? Many people use the new year as an opportunity for a fresh start in various aspects of their lives. One of the most common is starting a fitness regimen. But when it comes to your financial health, you might find that it’s a good idea to get started before 2011 ends if you want to be well positioned to take advantage of what 2012 has to offer. The first step is to conduct a thorough review of your financial life. Unless you know where you are today, you won’t be able to map out a strategy for tomorrow. You can start by making sure that your goals and objectives remain viable and realistic. And it’s very important to be clear on these, ensuring they’re welldefined and in line with your current circumstances in life. It’s especially important to revisit your financial goals if you’ve recently experienced major developments in your life, such as a change in employment, the birth of a child, or retirement. In trying to achieve your goals, you’ll want to help ensure that your investments are appropriate for your needs and risk tolerance, and that your portfolio is properly diversified. Keep in mind, though, that diversification does not guarantee a profit or protect against loss. In that context, make sure you view any market difficulties of 2011 with a broader perspective. Don’t allow short-term events in the stock market to cloud your longer-term judgment, influencing you to make rash decisions you might regret down the road. Indeed, having a sound investment strategy is critical. For example, all major asset classes should be considered for your portfolio. Of course, you should try to invest every year to help keep your portfolio growing. That means your spending, savings and borrowing should be under control. Examine your income and spending to see how you can divert more to investments in 2012 — especially considering that market difficulties in 2011 may have created some potential buying opportunities for 2012. Another action you can take before the new year is to make an early Registered Retirement Savings Plan (RRSP) contribution. Although you have a few months before the deadline for your 2011 contribution, the sooner you get your money into the plan,
the longer it has to potentially grow. Once this year’s contribution is out of the way, work on a plan to get your full 2012 contribution into your RRSP as early in the year as possible. If you can’t make a large lump-sum contribution at the start of 2012, set up a periodic plan that allows you to contribute monthly — though keep in mind that systematic investing does not ensure a profit or protect against loss. If you have unused contribution room from the past, formulate a plan to make up for those missed contributions in 2012. You’ll help boost retirement
savings and reduce next year’s tax bill. You might also want to consider a Tax-Free Savings Account (TFSA). A discussion you could have with your financial advisor is whether — based on your personal circumstances — you should contribute to your TFSA, RRSP or both. There may be more you can do today to get ready for 2012. Speak with your financial advisor to determine what actions you can take now to financially position yourself as effectively as you can for next year and beyond. Copy courtesy Edward Jones
RRSP Deadline: February 29, 2012
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HOW WELL YOU RETIRE
DEPENDS ON HOW WELL YOU PLAN FOR IT. Whether retirement is down the road or just around the corner, Edward Jones can help you reach your goals. As a first step, consider opening an Edward Jones RRSP. You’ll invest for the future and maybe reduce your income taxes. And since Edward Jones takes the time to develop personal relationships, we better understand your retirement goals. If you consolidate your retirement accounts to Edward Jones, we can help make sure your investments are simplified.
To learn why it makes sense to discuss your RRSP with Edward Jones, call or visit your local Edward Jones advisor today. Leeann M Chesky
Everyone needs to save for retirement, but not everyone needs to worry about it. With a plan and a program you can be a savings success story. We can help you get there. LeRoy Credit Union Limited offers many different fully guaranteed investment options – RRSP’s, RESP’s and Tax Free Savings Accounts. We also offer different RRSP loans to help you get started, such as the Take 10 and RRSP Quick Loan. We can help design a savings plan that will meet your goals. Call us today at 306-286-3311.
Financial Advisor 270 Acadia Drive Unit 7 Saskatoon, SK S7H 3V4 877-664-1969 www.edwardjones.com Member – Canadian Investor Protection Fund
LeRoy Credit Union Limited 101 - 1st Avenue NE LeRoy, SK
Phone: (306) 286-3311 Fax: (306) 286-3377 E-mail: info@leroy.cu.sk.ca Friday, January 27, 2012 ECT 9
What does investment landscape look like in 2012?
Time... to think about what security means to you. When it comes to your investment portfolio, how do you define security?
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ۓGuarantees that protect your investment? ۓReliable income flow? ۓThe expectation of future gains? Talk to us today about how financial alternatives like Investors Group Guaranteed Investment Funds provide a measure of certainty for your investment portfolio.
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For investors, 2011 was a somewhat “choppy” year, with numerous ups and downs in the financial markets. So what can you expect in 2012? As baseball Hall of Famer Yogi Berra once said: “It’s hard to make predictions — especially about the future.” These words are certainly applicable for anyone wanting an accurate forecast of the investment climate for 2012. Yet we do know of some factors that may affect your portfolio in the months ahead, such as: • Strong business fundamentals — In the past year, the European financial situation, the size of the U.S. deficit and the U.S. budget debates tended to overshadow some fairly good news. Canadian and U.S. businesses’ balance sheets were primarily strong, borrowing costs remained low, and corporate profits were good — and over the long term, corporate profitability is a key driver of stock prices. Heading into 2012, these fundamentals continue to look positive, which may bode well for investors. • Europe’s debt crisis — Greece’s economic problems made news in 2011, but they weren’t the end of the story in Europe. Italy, Spain, Portugal and Ireland also faced major financial difficulties. And without definite solutions, don’t be surprised to see intermittent, if short-lived, shocks to the markets. • U.S. election-year patterns —
Historically, the U.S. stock market typically rises during the year a U.S. incumbent president faces re-election, which is the case in 2012. Coincidence? No one can say for sure if the pattern will continue this year. This could impact Canadian markets since other markets tend to follow those of the U.S. Instead of trying to predict what will happen in 2012, consider the following tried-and-true investment strategies: • Diversify your holdings — spreading your money among a wide range of investments can help reduce the effects of volatility in your portfolio. Keep in mind, diversification alone doesn’t guarantee a profit or protect against loss. • Don’t ignore your risk tolerance — Worrying excessively about market fluctuations might mean you have too much risk in your portfolio. If you do this, consider making changes. • Always look at the “big picture”— Financial markets fluctuate. But by staying focused on your long-term objectives and making decisions accordingly, you can help avoid overreacting to short-term events. Just like other years, 2012 will undoubtedly have periods of turbulence. But by making the appropriate investment decisions, you can remain on track toward reaching your longterm financial goals. Copy courtesy Edward Jones
PLAN FIRST! From an investment perspective, your portfolio should be a complete picture of your overall planning. All portfolios should be tailored to meet each person’s individual objectives and risk tolerance. In a world with multiple products, decision making is difficult.
ST. GREGOR Credit Union Limited
With proper planning, the products will fit your needs. These products could include a GIC, TFSA, Labour-Sponsored fund, RESP, RRSP, RRIF, etc. In addition, a tax-wise investor becomes wealthier over the long run.
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Vince and Brenda specialize in retirement, investment, tax and estate planning. Should you wish to meet and begin the planning process, please feel free to contact either Vince or Brenda.
in the amount of
$200,000.00
Totaling $1,725,000.00
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St. Gregor Credit Union Limited has allocated for eleven consecutive years
The Annual Meeting regarding St. Gregor Credit Unions 2011 Financial Statement will be held Tuesday March 20, 2012 at Annaheim Community Hall Come and celebrate our 69th year of operations! Registration 6:00 p.m. Banquet 6:30 p.m. Meeting to Follow.
Vincent Wiegers CFP, CLU, CH.F.C. vince.wiegers@wiegers.ca Brenda Montieth DFA-Tax Services Specialist brenda.montieth@wiegers.ca Our office is located at:
St. Gregor Credit Union Limited Main Branch 10 ECT Friday, January 27, 2012
St. Gregor Credit Union Limited Annaheim Branch
Wiegers Financial & Benefits 120 33rd Street East Saskatoon, SK S7K 0S2 (306) 244-0949 1-877-943-4377