MONTREAL, Feb. 8, 2013 /CNW Telbec/ - Although the RRSP is an excellent
vehicle for reducing taxes, that is not the primary aim of this plan.
According to financial planners at Laurentian Bank, it is essentially intended
to be a means of saving for retirement.
"The RRSP is particularly pertinent within today's context," underlines Denis
L'Hostie, Senior Manager, Financial Planning. "People who long believed that
their pension plan would be sufficient saw their savings suffer setbacks
related to the economic crisis, in addition to feeling the effects of weak
returns generated by guaranteed investments. As such, personal savings are
more important than ever today in order to avoid a potential lack of
sufficient income at retirement."
In response to the ageing of the population and weak growth in the number of
workers, the Canadian government recently decided to gradually increase the
age of eligibility for the old age security program and the guaranteed income
supplement from 65 to 67. Moreover, the population is expected to age more
rapidly in Canada than in other countries. In fact, the proportion of seniors
in the Canadian population vis-à-vis working age citizens is likely to almost
double in the next 20 years, which means that other measures aimed at
increasing the eligibility age for retirement can be anticipated as well.
Consequently, establishing clear and realistic retirement objectives has
become all the more vital.
During this RRSP season, it is important to remember that the Registered
Retirement Savings Plan was designed to meet revenue availability objectives
at the time of retirement. "The RRSP should be seen, first and foremost, as a
long-term strategic savings tool intended to provide savers with a safety
cushion for once they stop working," adds Denis L'Hostie. "And because
people's perception of retirement has changed a lot, many individuals don't
see it as a permanent stoppage any longer. Thus, one must be ready to meet the
needs posed by new lifestyles."
The best way to save is to spread out RRSP contributions throughout the course
of the year — ideally in the form of a systematic savings program. By
adopting such a methodical plan, the saver can progressively accumulate
capital and see it grow in a disciplined fashion, while gaining the
flexibility to confront different eventualities. "In so doing, we not only
increase our savings, but we also reduce the stress associated with scrambling
to find the sums to contribute at the end of the year," concludes Mr.
L'Hostie. "So the tax saving should no longer be seen as the ultimate
objective, but rather, an added benefit that the saver can apply to their RRSP
or to some other urgent financial need."
At this time of year, in particular, it is in everyone's interest to consult a
financial advisor or planner to be familiar with the different means of
preparing strategically and effectively for retirement.
About Laurentian Bank
Laurentian Bank of Canada is a pan-Canadian banking institution that has
nearly $35 billion in balance sheet assets and $33billion in assets under
administration. Founded in 1846, Laurentian Bank was selected in 2012 as one
of the 10 winners of the Canada's Passion Capitalists program in recognition
of its sustained success through the promotion of passion within its ranks.
The Bank employs more than 4,200 people.
Recognized for its excellent service, proximity and simplicity, Laurentian
Bank serves more than one million clients in market segments in which it holds
an enviable position. In addition to occupying a choice position among
consumers in Québec, where it operates the third largest branch network, the
Bank has built a solid reputation across Canada in the area of real estate and
commercial financing thanks to its teams working out of more than 35 offices
in Ontario, Québec, Alberta and British Columbia. Its subsidiary, B2B Bank,
is a Canadian leader in providing banking products as well as investment
accounts and services to financial advisors and brokers, while Laurentian Bank
Securities is an integrated broker, widely recognized for its expertise and
Mary-Claude Tardif Public Relations Advisor 514 284-4500, extension 4695
SOURCE: Laurentian Bank of Canada
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-0- Feb/08/2013 13:48 GMT
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