Don't put all your eggs in one basket

To the Editor:

I wonder how many people realize the risk of investing all their retirement savings in the company they work for.

I, along with many others, was encouraged to invest in company shares for retirement. In July of 2006, Bell Aliant changed from shareholders to an income trust. We had very little warning of this or its implications.

This necessitated changing from shares to units. It did not matter, of course, whether we wanted to or not as we had no choice. The shares were deemed to have been sold, even though they were just exchanged and no money changed hands.

Consequently, when we filed our 2006 income taxes, we were slapped with a capital gains tax of several thousand dollars. Paying capital gains on a lifetime of savings, all in one year, naturally put many in the highest tax bracket.

In some cases, retired former employees were forced to either sell off their investments or take out a loan to pay Revenue Canada. To add insult to injury, the government is able to claw back all or a portion of old-age security pensions for the coming year.

It is too late now for us retirees, but for those working for major companies and preparing for future retirement, it may be to your advantage to seek a financial advisor. It may not be wise to put all your eggs in one basket.

Mary Hancock

New Minas