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Nutrition Labelling 101: How to Read between Those Lines
Theresa Albert

Labels are critical to help you keep track of your things. The same is true of the food labels that... more

how to read a nutrition label
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Labels are critical to help you keep track of your things. The same is true of the food labels that appear on every package in North American grocery stores, and those labels are subject to certain standards under the law.

There are also private labeling systems in place. The Health Check System in Canada, which is a Heart and Stroke Foundation initiative, comes to mind as one that hasn’t lived up to rigorous enough standards.

In the US, there is the Hannaford Guiding Stars System, which is now implemented in Loblaw’s stores in Canada. It’s a ‘quick peek’ rating system to help customers identify the healthier products. Each product is given a rating of one, two, or three stars by a third-party panel of experts. Points are weighted according to the presence of positive attributes (like protein and fibre) and the absence of negative (white sugar, flour, salt, fat, etc.). It is a great quick way to help you pick up the best in class.

No matter the rating system on the product, once you get your products home, take the time to actually read the label and focus on:

  • The Ingredient List. The first three items should be real, whole foods and the list should be as short as possible and completely recognizable.
  • The serving size.  Be sure you know that the serving size is not the recommended amount that you should eat, but a reference number upon which the nutritional information is calculated.
  • % of Daily Value. The number chosen is for a 2000 calorie per day diet which represents an average. And you are not average. So much can affect how many calories are right for you.  Be sure that you know how many calories are right for you, your number could be higher or lower.
  • Slippery Sodium. Health Canada estimates that 88% of our salt intake comes from packaged foods, so simply putting away the salt shaker isn’t the solution. Packages contain a ‘% Daily Value’ amount that is too high so it obscures the facts. Most health care professionals recommend around 1500 mg per day as a maximum. Nutrition labels allow 2400 mg per day (because the Canadian average is around 3300). Be sure that this is a percentage that you stay well below. There are ways to reduce your sodium, but in the meantime, read every package, add up your sources for a day and do not go above 75% of the ‘% DV’.
  • There are only 13 ‘important nutrients’ that must be listed on a label. But of course, a healthy diet contains much, much more. If a piece of fruit listed all of its nutrients, the label would wrap around it many times over.

Most of your nutrients will actually be coming from whole foods, so be sure that this is also where most of your calories come from and you will be right on track.

Image of reading a nutrition label from Shutterstock

Theresa is a Food Communications Specialist and Nutritionist. Her French Canadian influences are a part of her 'no bologna' style as everything is on the table...not just the dinner. She has the unique ability to distill complex health concepts into simple, savvy steps to improve any lifestyle choice. Theresa is a sought after media commentator and lifestyle pundit on many topics with a particular fascination with human relationships with food and culture. She has two books published in Canada and the US: Cook Once a Week, Eat Well Every Day and Ace Your Health, 52 Ways to Stack Your Deck. She can be found on Twitter as @theresaalbert and at www.myfriendinfood.com.
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intro to rrsps
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Should you contribute to a Registered Retirement Savings Plan (RRSP)? With Tax-Free Savings Accounts (TFSAs) becoming more popular, there’s debate among financial experts on the pros and cons of each type of account. But RRSPs are still an essential tool for saving for retirement, provided you use them wisely. You still have time—the RRSP deadline for contributions eligible for a 2014 tax deduction is March 3, 2015. But before you jump in, read these three guiding principles for using RRSPs successfully.

Principle #1: Contribute

You can’t start a journey without taking that first step. So open up an RRSP if you don’t already have one. Next, contribute regularly! Money contributed to an RRSP grows tax-free inside the plan, and gives you a tax-deduction for the year of contribution. In effect, you are contributing before-tax dollars that will compound and grow free of tax. You’ll be taxed on withdrawals when you collapse the plan (usually at retirement), but your tax rate will likely be lower than it is in your peak earning years.

You can contribute 18% of ‘earned income’ to an RRSP every year to a pre-set maximum. For 2014, the maximum contribution limit was set at $24,270 (for 2015, it is set at $24,930). If you can’t contribute your maximum in a year, contribute as much as you can.

Make monthly contributions, and start now! The sooner you start tax-sheltered compounding in your RRSP, the better. Start off with small amounts, gradually increasing as your salary rises. Remember the magic of compounding. Even a $500 monthly investment compounded monthly at a relatively conservative rate of 6% will grow to $500,000 in 30 years.

You can also increase your contribution in a given year by using ‘contribution room’ you’ve carried forward from previous years. And you should also reinvest your tax refund to increase your nest-egg.

Looking for ways to make RRSP contributions? Here are some favourites:

Automatic deposits. Arrange with your bank or your employer (if they’ve set up a group RRSP) to automatically deposit funds to your RRSP with every paycheque. Contributing through the year gets your money invested and compounding that much sooner.

Severance payments. If you received a severance payment in 2014 (and you haven’t already blown it on something), use it to make an RRSP contribution. That way, you’ll shelter some or all of the severance amount from income tax.

Inheritances. You may have received a bequest during the year. If it’s a substantial sum, use at least some of it as an RRSP contribution. Bequests themselves are generally not taxable as income, but any investment income from that bequest is. So put some of it into an RRSP, where investment growth is tax-sheltered until your RRSP matures.

Contributions in kind. If you have qualifying investments outside an RRSP in a non-registered account, consider transferring some of them to an RRSP. Their current value will be deemed to be the contribution amount for tax purposes. If you make this type of contribution, keep in mind that there will be a ‘deemed sale’ of the asset, and 50% of any capital gain may be taxed. However, the upside is that you’ll get a tax deduction on 100% of your contribution. To make contributions in kind, you’ll need a brokerage account or have a self-directed RRSP that lets you pick and choose your own investments.

Should you borrow? The biggest downside to borrowing your RRSP contribution is that you are leveraging your investment. It makes no sense to put borrowed money into a safe, interest-bearing investment like a GIC, because it earns less than the cost of your loan. But if you invest in equity investments, either directly or through a mutual fund or ETF, you run the risk of magnifying any losses that may occur. In other words, the value of your investment may end up being less than the value of your loan—never a good situation!

Another minus is that an ‘RRSP loan’ is still a loan—a debt with interest payable. And you must pay the lender (usually your friendly neighbourhood bank) the money when it’s due, regardless of what happens to your RRSP investment or anything else. People who jump into RRSP loans without thinking about the effect on their cash flow are usually in for a rude awakening.

Speak with your financial advisor or qualified planner about more complex RRSP contribution ideas, such as contributions in kind or RRSP loans.

Principle #2: Invest

Putting your RRSP funds in a savings account or a GIC might sound ‘safe,’ but that strategy fails to make optimal use of the RRSP’s most powerful feature—long-term tax-sheltered compounding. RRSPs may hold a wide variety of investments. And with the right asset mix, you can boost your investment return far beyond what’s offered by the meagre returns on savings accounts or GICs. Here’s a quick list of what the Canada Revenue Agency says are qualified RRSP investments. For more detail, check the CRA website:

  • Bonds
  • Exchange-listed securities
  • Exchange-traded funds (ETFs)
  • Mutual funds
  • Options
  • Money or cash deposits
  • GICs
  • Other qualified investments include annuities, mortgages, certain shares of small business corporations and venture capital corporations. You may also put money into investment grade gold and silver bullion, coins and certificates.

Principle #3: Know yourself and invest wisely

For many of us, an RRSP is our only source of retirement income apart from the Canada Pension Plan. And while you can invest in just about every type of asset class, an RRSP is not the place to speculate on junior mines, high-tech start-ups, commodities or other risky and volatile assets, even though they might be qualified investments as seen in the list above. Remember—tax benefits like the dividend tax credit, the capital gains tax exemption and the ability to offset losses against gains are lost within an RRSP.

Aside from not contributing to an RRSP at all, the RRSP investment choice is where most people go astray. Most of us tend to overestimate our capacity to deal with market volatility and take investment losses. So be realistic about your own tolerance for risk (and ignore what your neighbour, uncle or barber thinks—they generally exaggerate!). Work with a qualified financial planner to allocate your RRSP assets according to a plan determined by your personal goals and a realistic assessment of your tolerance for risk.

Image of RRSP from Shutterstock.

GoldenGirlFinance.com is a thoroughly modern, free online financial resource for women in Canada today. Born out of the notion that too many smart women let their financial situation be ignored, swept under the rug or dictated by others, GoldenGirlFinance.com is rebranding finance with a feminine spin to engage women of all ages to take a greater interest—and play a greater role—in those financial issues that affect their everyday lives and financial futures.
Comments | Tagged under money, advice, saving, finance, rrsp
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