By Staff | February 20, 2008 | Last updated on February 20, 2008
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(February 20, 2008) Nearly seven in 10 Canadians say the amount of money needed for a comfortable retirement is the key driver in their decision about when to retire, according to the 18th Annual RBC RRSP Poll.

“As the RRSP contribution deadline on February 29 approaches, many Canadians are thinking about their savings and whether they will have enough money to retire comfortably,” says Lee Anne Davies, head of advanced retirement strategies for RBC. “But how do you determine how much money you will need until you have a clear picture of your retirement, taking into account things like your lifestyle, health care and family needs?”

Indeed, this year’s poll of 1,200 Canadian adults, finds that other factors apart from money are increasingly factoring into retirement decisions. RBC says 60% of Canadians think that their health care needs are also an important driver, up from 54% in 2006. Nearly half of respondents (49%) expect to use some of their retirement savings to pay for health care costs — which on average will represent one-fifth of their retirement savings.

“As Canadians come to terms with the health impacts associated with aging, they realize some of their retirement savings will be needed to pay for health care costs which may not be covered by government or employer programs,” says Davies.

According to those surveyed, retirees, on average, say they had a goal of nearly $450,000 as the amount of money required for a comfortable lifestyle. People who have yet to retire think they will need nearly double that amount, or almost $900,000.

This gap widens further by gender. Among Canadians who have not yet retired, men and women have dramatically different views — men estimate that they will need more than $1,000,000 to retire comfortably, while women say it will be closer to $675,000.

Nonetheless, Canadians are generally optimistic about their retirement lifestyle, the poll finds. More than four in five respondents (81%) believe they will have a comfortable lifestyle in retirement.

“As we have also seen in our past research, people approaching retirement don’t always have a realistic view of how much money they need to retire comfortably, and men and women have substantially different perspectives,” Davies says. “Retirement is a major decision, and there really is no magic number.”

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Scotia buys stake in Barbados bank

(February 20, 2008) Scotiabank has expanded its presence in the Caribbean by acquiring a minority equity stake in Cidel, the largest privately owned bank and trust company incorporated in Barbados. The investment is being made through the private equity investment arm of Scotiabank. Terms of the agreement were not disclosed.

Under the terms of the transaction, Tony Cestra, the managing director and head of Scotiabank Private Equity will be nominated to the Board of Cidel. Scotiabank and Cidel will explore opportunities to provide cross referrals for products and services where appropriate.

“We are very excited about our investment in Cidel,” Cestra says. “We are impressed with Cidel’s performance, its experienced management team and future growth prospects.”

In addition to Barbados, Cidel, which is regulated by the Central Bank of Barbados, has offices in Bermuda, South Africa and Canada.

Scotiabank has been active in the Caribbean and Central America since 1889. The company believes it is now the leading bank in the region, with operations in 24 countries and 11,689 employees in the region serving more than two million customers.

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CPP appoints two new directors from Vancouver

(February 20, 2008) Minister of Finance Jim Flaherty announced today two appointments to the board of directors of the Canada Pension Plan Investment Board (CPPIB).

The two new appointees are Pierre Choquette and Michael Goldberg, both residents of Vancouver.

Choquette is chairman and former chief executive officer of Methanex Corporation. Goldberg is the former chief academic officer of Universitas 21 Global, an international network of 20 universities.

“I am pleased two people with such broad experience are joining the board to help it continue to achieve its long-term investment mandate,” Flaherty said.

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Mixed reaction to B.C. budget

(February 20, 2008) The government of British Columbia’s provincial budget has been met with mixed feelings from financial services groups.

The Chartered Accountants of B.C. are pleased to see that the B.C. budget has balanced environmental and social goals with economic competitiveness.

“We understand that the environment and climate change are important priorities of this government, and they have consistently played a leadership role on this file. We are pleased that they are planning to meet their goals in a revenue-neutral way that does not increase the overall tax burden in the province,” says Richard Rees, CEO, Chartered Accountants of B.C.

The CAs also stressed that the government must ensure that its environmental initiatives don’t hamstring the province’s economy. They caution that businesses with significant energy use will face increased costs that may not be offset by tax reductions, which could negatively impact their competitiveness.

“We understand and support the need to take action on climate change. However, as these policies move forward, and other regulatory regimes such as cap and trade are introduced, we would like to see an integrated approach across Canada,” says Rees.

B.C.’s Certified General Accountants say they have mixed feelings.

“The government has taken some good measures to tackle the environment and reduce business taxes to some of the lowest in Canada. However, we are concerned with the introduction of a carbon tax and a lack of action on the expanding provincial debt,” says Pat Keller, president of CGA-BC.

The CGAs believes that the key to a strong economy and a healthy environment is to implement a comprehensive strategy to reduce the accumulated provincial debt. The CGAs say debt continues to grow and will increase by $7.5 billion over the next three years, hitting $42.47 billion by 2010/11. It now costs some $2.2 billion a year to pay the interest on that debt.

The Investment Industry Association of Canada gave the budget a thumbs-up, particularly for its emphasis on small- to mid-sized businesses.

“The small- and mid-sized business sector in the province accounts for one-quarter of all employment and a significant share of overall economic activity. It is the expansion of these local businesses that holds the future of the province and will fill the ‘head office’ gap,” says Ian Russell, president and CEO of the IIAC.

Russell also noted that the reduction in the general corporate tax rate to 10% from 12% in the next two years, and the small business rate cut to 2.5% from 4.5% in the same period are positive steps.

(02/20/08) staff


The staff of have been covering news for financial advisors since 1998.