MONEY MATTERS

For 2012, one thing is clear: job security is a major worry for Canadians, according to a new poll commissioned by Edward Jones. When asked which of the following are you most concerned about for 2012, one-third (31 per cent) of Canadians cited employment security. The concern has gone unchanged from a similar poll completed by Edward Jones in 2009.

Not surprisingly, there has been a 10 per cent rise in the concerns about healthcare costs (25 per cent, up from 15 per cent in 2009). Although, job security is still the biggest concern for half (51 per cent) of young Canadians aged 18-34, they are also becoming increasingly worried about healthcare costs, as their concerns rose sharply from 8 per cent in 2009 to 17 per cent in 2011. Canadians aged 65-plus are the most concerned overall (47 per cent) about the cost of healthcare.

"It's no surprise that job security continues to loom on the minds of Canadians as we continue to feel the effects of the economic recession," says Linda E Ouart, an Edward Jones financial advisor in Yorkton. "But while employment may seem like the priority, it is also vital for Canadians to prepare for the expected and unexpected costs of aging and retirement. Having a solid long-term financial plan in place will help ease the fears of job insecurity and rising healthcare costs."

Like healthcare costs, Canadians' concerns about stock market performance (21 per cent, up from 19 per cent) have increased since 2009. But nervousness about saving for retirement (unchanged at 14 per cent) remains stable.

Ouart recommends the following tips to help Canadians prepare for the unexpected:

Stay one step ahead - Working with your financial advisor, set aside cash reserves or put money in shorter-term securities. Investors should have a plan in place for dealing with unforeseen events like a job loss or sudden illness.

Plan for expenses - Try to estimate out-of-pocket expenses such as health or long-term care as "necessary expenses" and factor these into your overall budget. Consider what other expenses you might have to worry about if you leave or change your job.

Focus on what you can control - No investment performs well under all conditions, so don't make emotional decisions based on short-term market fluctuations. Staying diversified and taking a long-term outlook can help smooth out the normal ups-and-downs of the market.

Working with your financial advisor to prepare for the expected -and unexpected - will help to make sure that healthcare and saving for retirement don't take a back seat.

Other key findings from the survey:

Canadian men are more concerned with job security than women (32 per cent, 30 per cent respectively).

Similar to 2009, Canadian women (29 per cent, up from 18 per cent) are more concerned with the cost of healthcare than men (20 per cent, up from 12 per cent).

Canadian men are more concerned with stock market performance (27 per cent, up from 21 per cent in 2009) than women (16 per cent, down from 18 per cent in 2009).

Residents from Manitoba and Saskatchewan are the most concerned about saving for retirement in 2012, (19 per cent, up from 11 per cent in 2009), while Quebecers are the least concerned (unchanged at 11 per cent).

Ontarians (41 per cent, up from 34 per cent in 2009) overtook Albertans (30 per cent, down from 38 per cent) as the most concerned about job security compared to the rest of Canada.

For more information about Edward Jones, please contact Linda E Ouart, Edward Jones in Yorkton.

(NC) - It has been common to plan for a retirement that ends around the average Canadian life expectancy of 80 years. But Statistics Canada tells us that people are living longer. The fastest growing portion of the population is those 80 and over, and the trend is expected to continue.

Dave Ablett, a retirement planning expert at Investors Group, says the longer-life expectancy of Canadians is great news, but it also means that you should prudently plan for a retirement that could extend to your hundredth birthday, and perhaps beyond. This means more funding for a longer time.

"For example, a woman who retires at age 65, puts her retirement savings into investments held within a Registered Retirement Saving Plan (RRSP) that earns 6 per cent, and draws $3,000 through a Registered Retirement Income Fund each month (without indexing). Ignoring taxes, she would need to have $361,000 to last until age 80," Ablett explains. "However, if she needed income to age 100, she would need $539,000 or $178,000 more at age 65."

(The rate of return is used only to illustrate the effects of the compound growth rate and is not intended to reflect future returns on investment.)

Since age 65 is no longer the automatic retirement age, early or phased-in retirement, and progressive retirement, are concepts rapidly gaining in popularity.

Ablett also explained that RRSP eligible investments are a valuable, tax-savings income-builder, but limits on the total amount you can contribute make it unlikely your RRSP alone can deliver the level of income you'll need for a long retirement. That means you'll have to augment your income through contributions to a tax-free savings account (TFSA) or through a portfolio of non-registered investments that do attract taxes - and they must be carefully selected to minimize your yearly tax bite while maximizing long-term returns, the Investors Group expert noted.

Are you newly retired or thinking about retiring? Have you got a plan for the next phase of your life or are you going to wing it? Whatever your situation, the good news is it's never too late to crack your retirement nest egg in the most advantageous way.

My retirement date will be? If you decide to retire earlier than the 'usual' age of 65, each extra year will be one less you'll have to save for retirement and one more you'll have to fund. If you retire after age 65, you can continue the tax-saving, income-building advantages of your RRSP until the end of the year in which you turn 71.

My retirement lifestyle will be? Maybe you'll decide to keep working full- time or part-time, even start a business. If so, you can afford to save less in advance because even a modest amount of extra employment income can go a long way.

Be sure to factor in the additional costs for health care that are often a by-product of aging and look at income protection options that will help cover these additional costs.

My retirement income sources are? Varied - ranging from your personal savings, company pensions, investments held within a RRSPs or TFSAs and non-registered investments to government sources including the Canada Pension Plan/Québec Pension Plan (CPP/QPP) and Old Age Security. Add 'em all up.

Will my retirement paycheque be sufficient to sustain my lifestyle? Find out by identifying your continuing costs and expenses. Take inflation into account and the happy fact that you could need that income for 40 plus years. Establish a mix of investments that will bridge the gap and deliver the cash flow you will need without depleting your underlying assets.

My taxes will be? Minimized - with a withdrawal plan for your registered and other income-producing investments that takes full advantage of all the tax benefits available to you, such as age and pension income credits, while avoiding OAS clawbacks.

There are other ways to reduce taxes and increase your retirement income to the comfortable level you seek. Your professional advisor can help you evaluate and take full advantage of those that will work for you.

This column, written and published by Investors Group Financial Services Inc. (in Québec - a Financial Services Firm), and Investors Group Securities Inc. (in Québec, a firm in Financial Planning) presents general information only and is not a solicitation to buy or sell any investments. Contact your own advisor for specific advice about your circumstances. For more information on this topic please contact your Investors Group Consultant

(NC) - Emotional investing doesn't pay - it costs you instead, says Andy Beer, strategic investment planning expert at Investors Group.

"Market study after market study have clearly proved that when investors are driven by emotions - jumping into and out of stocks looking for the next winner, pouring money into mutual funds following a period of strong market growth, and then moving to the next 'hot' asset class during market troughs - they often lose, and sometimes lose big."

Beer explains that trying to time the market or an individual stock almost never works. But time in the market often does by delivering better overall returns - especially when you couple your long-term stay the course strategy with other key strategies such as effective asset allocation and dollar-cost averaging.

He noted that volatility is the nature of stock markets, but with a carefully selected and properly diversified 'mix' of assets, you can effectively reduce risk, and enhance your chances of achieving your long-term goals.

Beer also suggests that dollar-cost averaging (the strategy of buying a stock or fund on a regular basis regardless of the stock or fund price) is an investment strategy that saves you from trying to time the market. This approach is designed to lower the average cost of your stock or mutual fund units, and ensures you are always participating in the market, so you will never miss out on periods of excellent returns.

This column, written and published by Investors Group Financial Services Inc., presents general information only and is not a solicitation to buy or sell any investments. Contact a financial advisor for specific advice about your circumstances. More information on this topic can be obtained from your Investors Group

(NC) - Living the retirement lifestyle you want means making the most of your income. "Establishing effective tax planning and tax management strategies aimed at maximizing your retirement income by reducing taxes and potential OAS 'clawback' pressures is essential," says Investors Group tax planning expert Tannis Dawson. "Strategies such as pension income splitting, sharing CPP/QPP benefits, investing extra income in a TFSA and considering a monthly income portfolio are solid strategies for maximizing your retirement income by managing taxes."

Financial tips and investment information are available online at www.investorsgroup.com.