BMO: Investing Strategies Should Vary With Age and Stage
- As the RRSP contribution deadline approaches, Canadians of all ages
should review their portfolios to ensure they align with their
- BMO SelectClass(R) funds offer four portfolios with varying risk
levels to help suit the needs of investors at various life stages
TORONTO, ONTARIO -- (Marketwire) -- 01/23/13 -- As the March 1st
deadline approaches to contribute to a Registered Retirement Savings
Plan (RRSP), BMO reminds Canadians to take their age, anticipated
life goals and milestones into consideration when developing their
According to a study by BMO Financial Group:
-- Sixty per cent of Canadian investors have time frames or target dates in
mind to reach their financial goals.
-- Eighty-nine per cent agree that it is important to hold investments that
evolve over time to become less risky as key life events approach.
-- However, only 49 per cent currently hold investments that become less
risky over time.
"Whether retirement is many years away, just around the corner or
already here, there are strategies investors can implement now to
make the most of their money," said Steven Shepherd, Vice President,
Investment Strategist, BMO
Asset Management Inc. "By making wise
choices and reviewing their financial plan regularly, investors of
all ages and stages can ensure they are on track to reaching their
BMO offers the following investing strategies for each life stage:
In Your 20s - Getting That First Job:
-- Though you may be just starting off your career and cannot even imagine
retirement, it is not too early to think about establishing a long-term
-- With years to your advantage, consider taking a more aggressive approach
to your asset mix by diversifying with a higher mix of equities compared
to fixed income instruments or cash.
-- Pay down debt and try to save as much money as possible.
In Your 30s and 40s - Family and Big Purchases:
-- You may be getting married, raising a family, saving for a child's
education and making large purchases such as a house, car or cottage.
-- Build a relatively balanced portfolio across all asset classes. Include
a Registered Education Savings Plan (RESP) to help save for your child's
-- Set up a Continuous Savings Plan that automatically puts money into your
RRSP. Investing smaller amounts regularly is easier than coming up with
a lump sum at the end of the year, and it allows you to take advantage
of dollar cost averaging for any investments that fluctuate with the
-- Some employers will match your RRSP contributions up to a maximum, so be
sure to contribute enough to take full advantage.
In Your 50s and 60s - Serious Business:
-- Retirement is on the horizon - start strengthening your retirement
savings by shifting investments from a long-term to a mid-term focus and
taking a low-risk approach.
-- Consider a conservative asset mix with a good portion of fixed income
instruments such as GICs.
-- Create a snapshot of how much you own to help you understand how your
assets could help fund your future. For instance, an RRSP can be a
source of income during retirement while other accounts can pay for a
child's education or a major purchase.
-- Pay off outstanding debts.
In Your 60s and Older - Looking at Retirement Head-On:
-- Adjust your financial plan to achieve your ideal retirement lifestyle,
whether that includes taking early retirement or an extended trip, or
launching a second career.
-- Consider income-generating investments coupled with a conservative asset
-- Maximize your RRSP contributions and consider an RRSP loan for making
catch-up contributions, as you will only be able to contribute to your
RRSP until the year you turn 71.
-- Review and update the beneficiary designations for RRSPs, Registered
Retirement Income Funds (RRIFs), TFSAs and insurance policies.
To assist Canadians in choosing investments that match their current
age, life stage and risk tolerance, BMO SelectClass(R) Portfolios(i)
come in four portfolios options designed to align with different
client risk profiles. Whether an investor is conservative, bold or
somewhere in between, or they are approaching key life events and
want a portfolio that matches their risk level, there is a portfolio
tailored to that investor. Additionally, investors can transfer money
between SelectClass Portfolios in a tax efficient manner. This type
of portfolio design can give investors confidence that they can be
financially prepared for retirement.
For more information on saving for retirement, please visit
Get the latest BMO press releases via Twitter by following @BMOmedia.
Risk is generally the uncertainty of a return and the potential
capital loss in your investment.
The following are general comments and do not constitute financial
advice by BMO Financial Group. Investors should always seek advice
from a qualified financial advisor prior to investing.
(i)BMO SelectClass Portfolios are offered by BMO Investments Inc., a
financial services firm and separate legal entity from Bank of
Commissions, trailing commissions, management fees and expenses all
may be associated with mutual fund investments. Please read the
tus of the mutual fund before investing. Mutual funds are not
guaranteed, their values change frequently and past performance may
not be repeated.
Amanda Robinson, Toronto
Valerie Doucet, Montreal
Laurie Grant, Vancouver
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