A Cure for Overtaxitis
There are a great many resources on the Internet to learn more about RRSPs and retirement planning. The first thing I would urge you to check out is Garth Turner’s 2000 RRSP Guide. I read the 1998 edition and it was an eye opener, let me tell you. All the facts cited above came from his book and there’s much, much more.
Unlike most RRSP Guides which compare the rates of return of the over 1500 mutual funds available in Canada, Turner barely mentions specific investments. He is concerned with the big picture. He discusses the basics - what an RRSP is, what’s eligible to go into it, etc. and goes on to discuss strategies for using this tax saving device successfully.
He says, "I was shocked when I became Minister of National Revenue in 1993 to see how many taxpayers overpaid. They missed obvious deductions and exemptions. They didn’t use any of (the) powerful RRSP strategies that can save thousands of dollars with just a few phone calls."
Turner’s background makes him uniquely suited to analyse tax saving strategies and sound the clarion call for action. He talks about using the equity in your home effectively in retirement planning . He compares equity investments with GICs which he calls the absolutely worst investment you can make. And he talks about possible changes in the tax laws that we should be aware of.
The entire book was available online in 1998, but I guess it must have cut into sales so he's not doing that anymore. But you can find generous excerpts online courtesy of the TD Bank.
RRSP Tips, Articles and Analyses
There are various sources online with RRSP tips, articles and analyses. One of the best is the RRSPs: The Basics from i|money. It is a concise and readable explanation of RRSPs with an FAQ section as well. Quicken.ca also has an excellent RRSP Planner.
Shel Jacobsen from Prince George, B.C., who calls himself Mr. RRSP, offers Ten Practical RRSP Suggestions. And Greg Bowen, a financial advisor from Beaumont, Alberta, has RRSP Strategies for the 90s and Beyond. It's now "beyond" so if you have n't checked them out yet, do so now!
Most banks and financial institutions sell their own lines of mutual funds and have RRSP information available. Many even offer Catch-Up loans so you can take advantage of unused RRSP contribution room. Scotia Bank even has a Catch-Up Loan Calculator that lets you enter relevant data and see how much the loan will cost you and how much you stand to gain. See my Banks & Financial Institutions Net Links for more.
Jim McKane of Berkshire Securities in Kitchener, Ontario offers a Tax Savings from an RRSP Contribution Calculator. Enter your marginal tax rate and how much you plan to contribute and it will tell you about how much of a tax refund check you can expect.
Of course we shouldn’t forget the mutual fund companies themselves. Many of them also have articles explaining RRSPs. Check my Mutual Fund Companies Net Links for more.
And finally, I have an extensive collection of RRSP Net Links which includes the above links and more.
Financial Planners
Financial Planners are another rich source of information on RRSPs. Here are a few to check out.
Garth Turner, it should be noted, doesn’t recommend specific mutual funds because he believes it needs addressing by a professional. "Most Canadians," he says, " are gambling horribly with their financial futures and don’t even know it. Why? Because they entrust their money entirely to rank amateurs with no formal training who devote, on average, about two hours a year to the job and refuse to consider any research or investment information that isn’t free. That’s right - they try to do their own financial planning."
You may laugh, but I think he’s right. Unless you’re a well informed investor who is willing to do some research and thinking about things, use a financial planner.
The first site to check out is the Financial Planning FAQs from the Canadian Association of Financial Planners. It answers such questions as "How do you know if you need a financial planner?" and "How do you go about choosing one?"
Montreal based financial planner Doug Hudson even calls his website RRSP.org, so you know you'll find RRSP information there!
Or take a peek at one of my favorite investment sites the SCREAMING capitalist. Investment advisor Kevin Cork runs this one and it is as amusing as the title (it features a reproduction of Edvard Munch’s painting "The Scream"). If you really want to know how much money you may need in your retirement years, his clever article The End will make you laugh, but it also should make you shake in your boots a bit and start taking this retirement planning thing seriously. Cork also sends out an entertaining and informative free emailed newsletter.
Alberta based Peer Financial has a very attractive website with much useful information. Be sure to check out their pages on how to make the most of foreign content limits (listed as their Philosophy!).
Finally, Brian Costello is a nationally syndicated financial commentator with his "Your Money" radio program. His page features tax tips, information on his books and HomeTax software, and a Referral Network of qualified financial planners. Send him a request on the form provided and he'll send you the names of members of his Referral Network in your area.
And finally, you'll find even more links on my Financial Planners Net Links page.
Comments? Suggestions? Why not post them on our Bulletin Board or email me.
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