Wednesday, January 24, 2007 · Page 10 The financial fear factor Jim Augerman B.A. B.Ed CFP FMA CSA Certified Financial Planner Kingsville Tamara Cooper Clarica Advisor Cottam & Essex (NC)--Experienced investors consider RSPs a great way to save for retirement while taking advantage of certain tax benefits. However, many Canadians avoid setting up an RSP as they perceive these plans to be complicated and difficult to fund. With this year's March 1, 2007 contribution deadline looming, Linda Knight, vice president & chief operating officer, BMO Mutual Funds explains some common reasons why Canadians are reluctant to meet with a financial planner, and more importantly, how financial planners can help us get organized financially and stay on track. 1. You don't know where to start. The government makes it easy for Canadians to save for their retirement with RSPs. An RSP is an ideal investment vehicle because it allows your money to grow in a tax-sheltered environment until it's time to withdraw your money. The contributions are also tax deductible, so they can help reduce the amount of income tax payable for the year in which the contribution is made. To set-up an RSP, it's best to start with some professional help to guide you through the process step by step. For example, you can meet with an investment professional free of charge at any BMO Bank of Montreal branch. 2. You are self-conscious about your debt and don't want to be lectured about poor financial management. The first thing to know is that you are not alone. However, if you do have debt, it's important to address it now, so that it won't impact your future. Whether your plans for the next five years include buying a house or starting your retirement, a financial planner can help you develop a balanced strategy to achieve your goals without completely compromising your lifestyle. 3. You don't feel you have enough money to meet with a financial planner. There are different types of investment products for different types of investors, and a financial planner will Getting a good start to 2007! Here is a Top 10 checklist of things for you to do this month to help position yourself well for the year ahead! Capitalize on this month's "Resolution" momentum, and don't put it off any longer. 10. Going into the year deep in debt? Meet with an advisor to help lay it all out on the table and devise a plan of action to help get you off the treadmill once and for all! 9. Update, review or get a will and power of attorney for finance and health care. 8. Review your year-end company pension plan statements. Check if all is in order. If you get to choose the investments yourself, check on how they have done. 7. Same as #8 for your personal savings, RRSPs and RESPs. 6. Catalogue what is renewing in 2007. When does your home and auto come due? insurance Maturing GICs and term deposits? Mortgage renewing this year? Start shopping now. 5. How much life insurance do you have? How much are you paying for it? Your life insurance portfolio should be reviewed about every three years or as life changes happen. 4. Between ages 21 and 50? Have you talked to your advisor about critical illness insurance and disability income replacement? 3. Between ages 50 and 70? Want the insurance company to pay for your longterm care down the road? Now is the time to price it out and consider a 20-year paidup plan. 2. Save more, spend less. Your goal should be to allocate 10 percent or more of each pay towards savings and RRSPs. A take-home of $1,000, means $100 per pay period should be saved. 1. Forget product: you need a strategy. If your finances are like most, your insurance, savings, RRSP and RESP investments have been spread over five to six policies/accounts in three to four different institutions over the years. A good advisor can help quarterback and pull the whole strategy together to help ensure everything is working in your best interests. Make 2007 the year that you get a good handle on where you stand today. Jim Augerman and Tammy Cooper are your local, "home-town" Clarica advisors. If you'd like to submit a question for next month's column, please feel free to contact them. help you determine what's best for you. Investments such as mutual funds have appeal for both novice and seasoned investors and many mutual fund companies offer continuous savings plans (CSPs) whereby investors can start an RSP by contributing as little as $25 a month. 4. You didn't save enough money for your RSP this year. You don't need to miss out on the tax benefits of investing in an RSP just because you didn't save enough money. You may be eligible to take out a loan from your financial institution to max out your annual contribution and set up a payment schedule to pay it off within the year. Remember, when you receive your tax refund, you can use it to pay down your loan. To learn more about saving for retirement, meet with an investment professional at any BMO Bank of Montreal branch. More information is available online at www.bmo.com. Partners in retirement planning: How to choose an investment advisor BY SARAH POWLEY (NC)--When planning and investing for their retirement, many people turn to the experience and knowledge of a professional investment advisor. How do you pick an advisor who is right for you? Do your homework "It's important to know what you're looking for in an advisor," says Don Reed, president and CEO, Franklin Templeton Investments Corp. "You probably want to find an advisor who understands your goals and risk tolerance." Ask your family, friends and work colleagues for their recommendations and the reasons why they chose that particular advisor. Also, banks or mutual fund companies often provide referrals too. Gather your information Before you go to an interview meeting with an advisor, make sure that you gather all of your financial information, including past tax returns, financial statements, insurance coverage and pension plan details. "Your relevant financial information will give the advisor a clear view of your financial picture," says Reed. Conduct the interview Many advisors will have an introductory meeting with you at no cost, allowing you to determine if they are a good fit for you, both professionally and personally. For examples of questions that you can ask advisors, go to websites like www.franklintempleton.ca . Pick an advisor Consider which advisor made you feel most comfortable and offered the best plan for your situation. Reed concludes: "Finding the right advisor is a great step down the path to achieving your retirement goals." Life : Critical Assist Ad 3 1/2"W x 2"H Ask me about RRSPs The Co-operators Now there's Mahon support your Patrick a plan to 12 Talbot a time Essex, illness. lifestyle in St. N.,of criticalON patrick_mahon@cooperators.ca *Photo Here Legal Agency Name Ltd. (519) 123 Street Address, City/Town Agent Name, 776-7342 firstname_lastname@cooperators.ca* (000) 456-7890 Critical Assist ® Home Auto Life Investments Group Business Farm Travel Critical Assist®, is a registered trademark of Co-operators Life Insurance Company, used with permission.