By Ashley Wills

Bad day on stock markets has silver lining, says Sask. financial expert

Aug 5, 2011 | 7:25 AM

Cash and bonds may be looking more attractive after a disastrous Thursday on the stock markets.

The TSX alone is off a thousand points from where it was at the beginning of the year, and this could signal a serious hit to some people’s pensions.

Generally, there are two types of pension plans the average person has.

Saskatoon financial expert Paul Jaspar explains that one plan is the money purchase plan.

“The amount you will get as a pension is dependent on how much is in the plan on the day that you retire,” said Jaspar, adding that if funds in the plan have gone down, your pension will be affected.

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Meanwhile, a defined benefit plan will keep your pension intact, but the corporation or government, will have to make up the difference if it's short, which could lead to tax hikes.

However, Jaspar says one bad day doesn't make the stock market crash. He adds that for some, this downturn could be a great buying opportunity.

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