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Time to consider RSPs

Fall is now upon us and is the time of year when many retirees look to convert their RSPs into retirement income.

Fall is now upon us and is the time of year when many retirees look to convert their RSPs into retirement income.

Government rules dictate RSPs must be collapsed by the end of the year its owner turns 71.

Most will choose the RIF option. This can be a scary proposition with financial markets around the world exhibiting extreme daily volatility due to challenging issues that include the European debt problem, the U.S. debt and fiscal problems — and the list goes on. However, with GIC rates around 1.25 to 2.6 per cent, investors are seemingly left with few choices, and tough ones at that.

Investors often perceive market or equity market risk to be the primary risk to their retirement income. Although capital preservation is extremely important, there are more related risks that are equally important to address when considering one’s retirement income.

These include: inflation risk – the risk your income does not keep pace with the cost of living; longevity risk – the risk you outlive your savings; accelerated withdrawal or depletion of investments – most often occurs when the investor is forced to withdraw from funds in a declining market.

All of these risks can leave retirees with a diminished lifestyle in their latter years when the risk of health problems and related expenses can increase.

If you are an investor who finds themselves at or near this critical juncture, you will want to attend a free seminar this Thursday at Crown Isle 6 p.m.

The event is hosted by ScotiaMcLeod and features guest speaker Karen Jeffrey, retirement consultant with Standard Life Investments. Karen will discuss potential solutions that address these risks with innovation and tried and true strategies.

Call Lindsey or Natalie at 250-890-3579 to register.

— ScotiaMcLeod