Managed Money Reporter Newsletter — Issue 167, January 2001

Editors: Carl Spiess & Allan McGlade

Featured Articles

Will Your Money Keep Working When You're Not?

It's been said that a goal is a dream with a deadline, and certainly the dream of retirement has a very definite deadline when it comes to accumulating money within an RRSP.   Retirement planning also has a deadline, which is set by you when you decide the age at which you wish to retire.   Whether you are planning to work until you are 65 or older, or are considering an early retirement, it's not enough just to dream.   If you want to make those wishes a reality then you need to set some goals which by their very nature will have a built-in deadline to help keep you on track.  Retirement planning is made up of two components – personal and financial – and both areas need to be addressed.

We have outlined below some key financial retirement strategies that should be considered as you look towards retirement:

RRSP Deadline

The RRSP deadline is quickly approaching. The last day for RRSP Contributions for the 2000 tax year is March 1st, 2001.The contributions must be received in our offices on or before the final day to qualify for the 2000 tax year.

To find out your contribution limit call Revenue Canada at 1-800-959-8281 or visit their website at

Know where the money is coming from...

Gain a clear understanding of where the
necessary income to fund retirement will
come from.  There are three sources of
retirement income: government sponsored 
plans such as OAS and CPP/QPP; 
company sponsored plans; and your 
personal savings, both registered and 

Will Government Plans be enough?

The aging population will place a huge strain on these plans, and with fewer people in the workforce, the Canadian tax base will be smaller which will further stretch pension programs not to mention the health care system.  With less money to go around, never before has it been more important for Canadians to save and invest wisely.

Statistics show that over 60% of Canadians will retire on CPP and Old Age Security alone.  It's frightening to imagine the number of impoverished seniors who will be relying on dwindling social assistance programs for support in the 21st century.  The solution lies in proper planning.

Setting up a budget

If you are not currently doing so, set up a budget to determine where you spend your money.  Will this same amount be needed once you are retired? (The general rule of thumb is that you will need 70% of your current income.) When looking at approximately a 25-year savings horizon, putting at least 10% of your current income into an RRSP can help you reach those goals. Even better if you can maximize your RRSP room, which is 18% of your income (subject to pension adjustments – see your Revenue Canada Assessment for details). Remember that it is important to pay yourself first. If you have trouble saving money, you can set up a pre-authorized deduction from your bank account or your paycheque (where applicable).

ScotiaMcLeod's website provides investment tools such as a ‘Cash Flow Calculator' that can help you assess your spending as well as a ‘Reality Check' where you can see how you are doing with respect to your RRSP savings to make sure you are on target.   We also have links to other useful sights, visit our website at:  and check out Investment Links and Tools.

Other Tips

  • Be sure to keep your Retirement income as well as your spouse's at par with each other – this includes any company pension plans as well as your RRSPs. This will insure that you are taxed at the lowest rate possible when you go to withdraw the funds.
  • Once you start to draw on your investments, use your income from non-registered sources first, allowing your registered investments to continue to compound, tax sheltered, for as long as possible, or until you have to convert them at age 69.
  • Be sure to maximize any unused RRSP contribution before you convert your savings to retirement income.
  • Continue contributing to a Spousal RRSP if your spouse is under the age of 69 and you have earned income.
  • If you are offered early retirement with a corresponding retiring allowance, take advantage of the ability to transfer all or part of this allowance directly into your RRSP, thus deferring income tax on this lump sum and allowing it to grow tax-sheltered within your RRSP.  Revenue Canada allows $2000 for each year of service before 1996 to be transferred into your RRSP, plus an additional $1500 for each year of service prior to 1989 in which you were not a member of a vested company pension plan.
  • When funds have been converted to a RRIF, if possible take only the minimum required annual withdrawal and base this amount on the younger spouse's date of birth.
  • Hold fixed income products in your RRIF and hold growth investments outside your RRIF to reduce taxes.

Mutual Funds for Kids

Scotia has launched a Canadian first – The Scotia Young Investors Fund is a great way to introduce younger Canadians to the world of investing.  Ideal for RESPs, and great as gifts for children from Grandparents and family members, the Scotia Young Investors Fund will hold medium to large size global companies.  Quality businesses held in the fund such as Nintendo, Disney and Toys R Us are widely recognized and will encourage young investors to learn the fundamentals behind investing.  

This new fund is great for Registered Education Savings Plans or as a gift for your children or your grandchildren.  They also have a low minimum investment of $100.

Call us or email us for more information.

Manager Change at AIM

Trimark Discovery Fund has undergone a recent manager change and will now be run by Jim Young and Bruce Harrop.  The mandate of the fund, to invest in innovative, emerging companies in a number of sectors across the US and abroad, will not change.

Other News

Foreign Content Limits have been raised to 30% effective January 1st, 2001

Speaking of Retirement...

Eventually, everyone retires...

or almost retires.

John Zufelt, founder of the Mutual Fund Reporter Newsletter in 1986, the longest running newsletter of its kind, will be transferring daily client contact responsibility to the rest of the MFR Team.  John will remain a director of  ScotiaMcLeod and a consultant to the Mutual Fund Reporter.

We would also like to assure all of our clients that it will be business as usual. Carl Spiess, MFR co-editor and John's partner of 10 years will be continuing to manage the team.  Our fundamental buy and hold philosophy of investing in well run funds and focussing on your asset allocation, remains in place to help you to reach your retirement goals.

Quickly again, here is your MFR team:

Carl Spiess, MBA, Director

Allan McGlade, CLU CFP, Planner

Sharon Calvert, Investment Associate

Nicole Keeler, Investment Associate

Jane-Ann Crombeen, Investment Associate

Jennifer Hart, Administrative Associate

Ron Pante, Administrative Associate

Brenda Cordeiro, (on Maternity leave)

Brenda Petrunick, Admin. Assistant

Nalini Singh, Admin. Assistant

For more details visit


Contact Us

T.  416.863.RRSP (7777)
F.  416.863.7479

ScotiaMcLeod is a division of Scotia Capital Inc., member of CIPF.

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