Becki Patterson, Freelance Writer

It is no secret that saving for retirement and financing your passage into the after life are costly, and often requires an adjustment in lifestyle, but the actual numbers still gave participants of the First Global Bank's estate-planning seminar a jolt on Monday.

"Possibly the best piece of advice I can give you is to start now. Begin by arranging a salary deduction to a savings account and move to an interest-bearing chequing account - and add overtime too," said First Global's vice-president of corporate banking, Paula Barkley.

Barkley, who was among a team from the bank trying to simplify and demystify personal financial planning to meet medium- and long-term needs and goals, took participants through the steps on how, to calculate and how much would required to retire and live comfortably.

The retirement calculator Barkley referred to and used in her presentation can be found at the website www.planningtips.com/ cgi-bin/retire.pl.

This site does the actual crunching of the numbers, but you would have to decide - among other things - how much you would need to live in the years after employment, at what age you would like to retire from the rigours of the work world, and what financial part, if any, your current pension plan play in your overall projected needs.

Once you have decided what your retirement income needs are, depending on lifestyle, here are the steps to take as outlined by Barkley:

HOW TO PLAN

Step 1: Work out a budget that will allow you to begin saving the difference/shortfall that the pension plan at work will not cover, or the entire amount if you do not have a pension plan in place.

Step 2: Sit with a professional financial adviser to begin structuring a portfolio of investment instruments that will constitute this retirement fund. The foundation principle of investment portfolios is diversification - selecting a range of instruments - and these are determined on the risk tolerance of the investor. It seems, the older the individual, the more stable the instrument should be, but starting to save earlier in life will allow for choosing instruments with more risk and, therefore, the probability also, of higher returns.

Step 3: Manage your debt, that is to say, borrow money to invest now and repay later. Especially if younger with chances of acquiring loans being better, one should borrow now and repay later. This might also be as simple as investing now in tax-fee instruments that are taxed at encashment.

Step 4: According to Barkley, "Don't go to Paris." By that she means, stay on track. The temptation to cash in when the bottom line is looking healthy will come after a few years of dedicated savings, but one must resist.

ESTATE TAXES

A second presentation was made by estate planning consultant and attorney K. Denise Henry-James. As it turns out, even the dead have to pay taxes, or at least their estates do.

Here is a summary of estate duties payable on death as outlined by Henry-James. When added up they amount to 19 per cent-26 per cent:

TRANSFER TAX

Fifteen per cent on the new market value of taxable property within one year of the date of death of persons dying before June 1, 2005.

Seven and a half per cent on the new market value of taxable property within one year of the date of death of persons dying after June 1, 2005.

Six per cent interest runs on the day following the first anniversary of the date of death.

Until the transfer taxes are paid, no taxable property can be transferred to the beneficiaries of the estate.

STAMP DUTY

Three per cent payable on the new market value of the estate. The duty is affixed to the documentation for a grant of probate/letters of administration, and is payable before you can obtain a grant from the Supreme Court to call in the assets of the deceased, such as insurance policies and money in the bank.

ATTORNEY'S FEES

These are broken down into Bar Association fees and those payable under the Fair Competition Act (FCA). The following Bar fees apply:

Three per cent fees payable on the gross market value of the estate of the deceased as at the date of the death of the deceased where the estate exceeds $250,000 in respect of obtaining a grant of probate and letters of administration from the courts.

For estates less than $250,000, the attorney's fees are five per cent of the gross market value of the estate plus GCT.

Two per cent payable on the gross market value of the real estate of the deceased to be transferred to the beneficiaries, plus GCT.

Eighty thousand dollars for preparing the revenue affidavit for obtaining the Stamp Commissioner's assessment of transfer tax payable in the estate, plus GCT.

With the passing of the Fair Competition Act on September 9, 1993, attorneys can no longer set fees for estates. The fees, therefore, will differ from attorney to attorney, based on what the client is prepared to pay.

Attorney's fees are usually 3.5-five per cent to obtain the grant of probate or letters of administration and two per cent to 2.5 per cent to transfer the land. The total attorney's fees, therefore, range between 5.5 per cent and 7.5 per cent, plus GCT.

CASH FEES

$3,000: Advertisements for creditors in the Daily Gleaner and the Gazette.

$3,000: Advertisement for notice of application for grant of administration in The Gleaner and the Gazette.

$6,000: Photocopies and miscellaneous expenses.

$1,200: Registration fees on transmission. This cost is to be charged for each title for properties in the estate.

EXECUTORS' COMMISSION

A commission is paid to the executors/administrators of the estate for money passing through their hands at a rate of 6:106.

beckipatterson@hotmail.com