Retiring This Year? Time to Start Spending

    BMO helps seniors make the psychological shift from saving to spending
    through the concept of an RSEP - a Retirement Spending Education Program

    TORONTO, Dec. 20 /CNW/ - After decades of saving diligently, Canadians 69
and older can now begin to reap the rewards of their hard work by converting
their Retirement Savings Plan (RSP) into a Retirement Income Fund (RIF). By
law, Canadians must choose a retirement income option for their RSP by
December 31st of the year they turn 71.
    However, the psychological shift from saving to spending can be difficult
for many older Canadians who may not know how to turn their savings into
retirement income that may need to last them more than 20 years. That's where
the concept of an RSEP can help.


    Similar to building a retirement nest egg, drawing on the funds saved
requires expert advice. BMO Mutual Funds came up with the term Retirement
Spending Education Program (RSEP) - a concept, not a product, to help educate
Canadians who are close to retirement on how to make a plan to spend that nest
    Linda Knight, President of BMO Mutual Funds has the following tips to
help Canadians create their own RSEP and make the switch from saving to
spending in a tax-efficient way.

    1.  A good place to start is to sit down with an investment professional
        to discuss your situation and the options available. For example, BMO
        Bank of Montreal offers free advice and planning at its branches
        across the country.

    2.  Make withdrawals from any non-registered investments before taking
        money from a RIF. Money in a registered investment is tax-sheltered,
        while income from non-registered investments increases annual taxable

    3.  If a RIF represents your main source of income, make monthly
        withdrawals, taking account any other amounts you may be receiving,
        such as income from a company pension fund. Otherwise, think about
        making annual withdrawals (at the end of the year) so your capital
        can grow tax-free.

    4.  Consolidate all of your investments into a single RIF to make keeping
        track of your retirement income easier.

    5.  Like any other investments, examine your RIF on a regular basis to
        make sure it corresponds to your personal goals, risk tolerance, and
        time horizon.

    6.  Enjoy your retirement money! Similar to investing in an RSP, working
        with your investment professional to develop an RSEP will allow you
        to relax and enjoy what you've worked so hard to save.

For further information:

For further information: JoAnne Hayes, Toronto,,
(416) 867-3996; Lucie Gosselin, Montreal,, (514)
877-1101; Laurie Grant, Vancouver,, (604) 665-7596;

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