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Retirement Planning with Grant Hicks
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 Grant
Hicks, C.I.M., FCSI is a professional speaker, co-author and
a Retirement Planning Specialist with Manulife Securities. and Hicks Financial Inc. A leader in
the financial industry, Grant has been helping Vancouver
Island residents plan and create their retirement lifestyles
since 1989. |
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Common Mistakes In Retirement
When it comes to the world of
personal finance, there are some common mistakes
that I hear day in and day out. Here's my top two
list for 2010.
Mistake number 1 Not minimizing
tax. "
I should have never bought RRSPs
because they tax me when I take it out anyway."
Quite often, this statement comes from those that
are already retired who want or need to withdraw
some money from their RRSPs.
When you take money, you have to pay
tax at your marginal tax rate, which means that if
you want to spend a dollar, you need to take out at
least a $1.21 to net a dollar.
What retirees often forget is they
got a tax deduction a long time ago when the money
went into the RRSP. In other words, the government
lent them money when they made the contribution.
Although they have to pay that money
back when the money is withdrawn, in most cases,
they got a bigger deduction when they put the money
in than the amount of tax they are paying when they
take it out.
For example if you put the money in
while you were working and in a 36% marginal tax
bracket and you take it out when you are in a 21%
marginal tax bracket, you just made 15% in a return
based on tax. This 15% is on top of any investment
your return through investing.
Sure, you might dislike the thought
about paying 21% when you take it out but don't lose
sight of the benefit you got when the money went in.
One of the best investments you can make is save a
dollar in tax.
Mistake number 2, Not getting a
second opinion.
When it comes to your finances, you
want to trust the advice you are getting, however
you also want to get a second opinion. You wouldn’t
buy the first house you looked at, you would explore
your options.
When it comes to investing and
retirement, getting a second opinion (usually for
free) is one of the best investments you can make.
Financial professionals expect wealthy retirees to
get second opinions on their nest egg. If you won
the lotto tomorrow, you wouldn’t get one financial
opinion.
Talk to your friends or family who
their trusted advisor is and get a second opinion
and tell the financial advisor you are here for a
second opinion. It is common in the financial
industry. You will be glad you did.
Prepared by: Grant W. Hicks C.I.M., FCSI, Retirement Planning Specialist with Manulife Securities, Parksville. Information provided is not a solicitation and although obtained from sources considered reliable, is not guaranteed.
The views and opinions contained in this article are those of Grant W. Hicks, not Manulife Securities.
Comments or questions Grant can be reached at
954-0247 or 1-866-954-0247, email:
grant@ghicks.com
web:
www.ghicks.com
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| Copyright G. Hicks. All
Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed without the permission of the author. |
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