rgocs posted:

Does it have to be a specific type of RRSP account?

Kal Torak posted:

Yes. You open an actual Spousal RRSP. The annuitant is the lower income spouse who will declare the income upon withdrawal. The contributor is the higher income spouse who will take the deduction.

You can't just use any RRSP to implement this strategy.

Femtosecond posted:

I was thinking the other day about TFSAs, and if, in the case where you have non-registered investments and TFSA investments, if there is ever any scenario where it makes sense to withdrawl everything in the TFSA into cash, wait until you can contribute again, and move a bunch of your registered investments into the TFSA.

Of course when you move a registered investment into a TFSA you pay capital gains tax on this, so it seems like there'd be no point to doing this if the equity in the TFSA you were selling was the same as the equity you were moving into the TFSA. The same effect would be had if one just sold their unregistered equity. (eg. Huzzah I sold 100 shares of MSFT for a big tax free gain, now to move 100 shares of MSFT into my TFSA... oops I have to pay capital gains tax).

So the only scenario I can think where it makes sense is:

Your marginal tax rate is (temporarily?) low and you expect it to go higher in the future.

Say you're travelling around the world for a year and you're going to have near zero income. Would it make sense to clear out your TFSA, and then refill it from the sale of unregistered equities at a very low marginal tax rate?


Does this make any sense? Can anyone think of another situation? I mean other than "I need money now for a down payment on a house so I need to clear out my TFSA."

Square Peg posted:

If your tax rate is temporarily low and you need money why not just take it out of your RRSP? If you don't think your tax rate will ever be as low then there's no better time.
Same for the travelling around the world. RRSP isn't strictly for retirement, taking money out whenever your tax rate is at it's nadir and you need income is good practice.
TFSA on the other hand is much better to just leave untouched until retirement, as you'll get the maximum compounding tax-free return the longer you leave your investments in there.

Trillian posted:

I thought you lose the contribution room from your RRSP permanently, whereas with TFSA you can re-contribute later. Am I misunderstanding? That would make withdrawing from your RRSP way worse.

cowofwar posted:

If you had a TFSA, RRSP, and unregistered accounts would you go equities/growth 100% in TFSA?

Evis posted:

The RRSP is more of a deferred tax mechanism, so you’re not “losing contribution room” in the same way. If you have really low taxes one year then it probably makes sense to withdraw some of it. (I’ve never looked into this so please don’t do that just cause I said it seemed like a good idea.)

Less Fat Luke posted:

I don't think that's really a good plan; the gains and dividends inside your RRSP are also tax sheltered and interrupting that potential compounding before you have to is not a great strategy IMHO.

Square Peg posted:

Well, the scenario is needing money and the choice of taking money out of either an RRSP or a TFSA. If you have the funds you need in an unregistered account, you should certainly use those first.

Femtosecond posted:

I was thinking the other day about TFSAs, and if, in the case where you have non-registered investments and TFSA investments, if there is ever any scenario where it makes sense to withdrawl everything in the TFSA into cash, wait until you can contribute again, and move a bunch of your registered investments into the TFSA.

Of course when you move a registered investment into a TFSA you pay capital gains tax on this, so it seems like there'd be no point to doing this if the equity in the TFSA you were selling was the same as the equity you were moving into the TFSA. The same effect would be had if one just sold their unregistered equity. (eg. Huzzah I sold 100 shares of MSFT for a big tax free gain, now to move 100 shares of MSFT into my TFSA... oops I have to pay capital gains tax).

So the only scenario I can think where it makes sense is:

Your marginal tax rate is (temporarily?) low and you expect it to go higher in the future.

Say you're travelling around the world for a year and you're going to have near zero income. Would it make sense to clear out your TFSA, and then refill it from the sale of unregistered equities at a very low marginal tax rate?


Does this make any sense? Can anyone think of another situation? I mean other than "I need money now for a down payment on a house so I need to clear out my TFSA."

Globe and Mail posted:

Wealthsimple Inc., Canada’s largest robo-adviser, is infiltrating the discount brokerage business with the launch of a new trading platform that will allow investors to buy, sell and track stocks and exchange-traded funds with zero trading commissions.

The online portfolio manager – which manages more than $2.5-billion in assets and is predominately owned by investment giant Power Financial Corp. – is naming the platform Wealthsimple Trade. It’s a mobile app that will provide users access to unlimited zero-commission trades of more than 8,000 publicly traded stocks and ETFs listed on major Canadian and U.S exchanges.

At launch, securities can be bought and sold that are traded on the Toronto Stock Exchange, TSX Venture Exchange, Canadian Securities Exchange, New York Stock Exchange and the Nasdaq Stock Market.

“The options for stock trading in Canada aren’t great – traditional brokerages have high fees, the technology is dated and clunky, and the experience isn’t exactly user-friendly,” Mike Katchen, chief executive and co-founder of Wealthsimple, said in a statement. “We saw an opportunity to take the simple, human approach we’re known for and apply it to the trading experience.”

The platform is currently in a beta version and will soon be rolled out to users by invitation this month, followed by a wider, public launch later this year. The platform is available on iOS and Android systems and will include market and limit orders and a stock-watch list to monitor stocks without buying.

In 2017, 59.9 million trades were executed in the online brokerage channel in Canada and the average commission revenue earned per trade over that time frame was $10.07, according to the Retail Brokerage and Distribution Report by Strategic Insight.

Wealthsimple’s zero price tag for stock trading is a first in Canada and comes at a time when investor advocates have been pushing regulators for heightened fee transparency. The majority of Canada’s existing 15 discount brokerages charges between $6.95 to $9.99 a trade depending on the number of transactions an investor makes a month, while a handful of them offer zero-fee trades for exchange-traded funds. Prior to Wealthsimple Trade, Questrade offered one of the lowest fees on the Street at $4.95 a trade.

...

Mr. Katchen said he is able to offer free trades because Wealthsimple runs its own back-office operations, a service they acquired when they purchased online brokerage Canadian ShareOwner Investments Inc. in 2015. The acquisition allowed Wealthsimple to gain end-to-end control over the platform, including trade execution, custody services, portfolio construction and advice – a comprehensive service that is currently done by only a handful of other companies in Canada, such as the big banks.

The platform will also generate earnings through foreign exchange transactions, a fee that will be communicated upfront with clients.

The addition of a discount brokerage platform, along with the launch of the Wealthsimple savings account earlier this year, is shifting the company from only offering automated online portfolios toward a more full financial services provider, Mr. Katchen said.

CBC posted:

A David and a Goliath have shaken up the investment industry this month with new investment products that take the growing trend of low-fee investing one step further and charge no fees at all.

Major money manager Fidelity Investments announced last week that it would offer two mutual funds with a management expense ratio of zero — meaning the funds are free to own, and don't eat away at investors' returns with behind-the-scenes investment fees.

The two funds announced last week — one which invests in American companies, the other in global stocks — were a giant leap for an investment world that has been slowly inching toward lower fees for years.

...

"The trend toward low fee is definitely good," D'Souza says, "but once we hit zero, my question is: How are they making money? And are they making that clear to their clients?"

Financial planner Rona Birenbaum agrees that Fidelity's plan hinges on making up lost revenue elsewhere. "Nobody who is a for-profit business will offer something for free if there is no profit potential in it," she said "So really what it means is there's a fee or there's a cost or some kind of compensation model somewhere else."

Personal finance commentator Preet Banerjee says one way Fidelity is likely planning to recoup costs is to loan out the fund's shares to short sellers. Read this for a detailed look at how it works, but essentially short sellers make money by betting against certain companies. They do this by borrowing shares in them, selling them, and then buying the shares back at a lower price later to replace the borrowed share they sold. (Their profit is the gap between the two prices.)

Investors who loan out shares to short sellers typically charge interest to do so, which could be part of how Fidelity plans to eke out a profit.

"You can actually make, in some cases, more money than you are charging in terms of the management fee," Banerjee says, "so it's still possible to generate revenue even though the management fee might be zero."

It's why he thinks its possible the world could soon see a fund with a fee of less than zero — one that pays you to own it.

A huge, multifaceted company like Fidelity can probably offer no-fee funds because it has myriad other ways of making money once it has enticed someone in the door — selling them other funds or investment products, for instance, to recoup incremental losses incurred on its free offerings.

...

Subjunctive posted:

My Transunion score dropped from 808 to 792 between July and August, and I can't figure out why that is. I didn't take out or apply for any new credit products or miss any payments on anything, or even put anything on the existing line of credit. The only credit-related event that I can think of was that I had to replace a credit card that was compromised.

Is there any way to debug that sort of thing? I"m not alarmed really, but I'm pretty curious.

Lobok posted:

James Baud posted:

I think mostly no, but other factors include use of credit available, ie your balances when they were reported which will fluctuate month to month. Also last payment - I have a few idle cards and LOCs and my scores jump/fall a tiny bit depending on how recently I've made a payment on them all.

From your description, maybe your last use of (payment to) the LOC was long enough ago to cross a threshold a cost a few points.

But maybe an old closed account aged out of relevance so your average account age fell.

Subjunctive posted:

This was the free monthly reporting via CreditKarma, which I don’t think causes a hit. I sure hope not.


Interesting. The LoC payment was fine, but maybe something did age out. I hadn’t thought of that.

Thanks for the thoughts. I’ll see what happens in September.

Lexicon posted:

Dude don’t worry about it.

Risky Bisquick posted:

I signed up with Borrowell who shows a readout of your transunion report on their site while trying to offer you payday loans. If you ignore the payday loans, you can get free online monthly refreshes of the transunion score and report.

Kal Torak posted:

Borrowell uses Equifax, not Transunion.

Credit Karma uses Transunion.

zapplez posted:

RRSP employee match question.

My wife has her employee other employee contribution match for RRSP up to $1000 a year. Her choice in mutual funds are terrible though, as the balanced portfolio's MER is 2.52% !!!!!!!

Right now she is only contributing 2k a year in this fund, but long term how should we handle this? Invest in a low fee fund outside of work and ignore the employer match? Or is there somehow to transfer the cash out of the work RRSP to a private one?

Skizzzer posted:

is it recommendable to go to my bank for a financial advisor regarding my pension plan? i just need some help understanding what i should do. i'm transferring my contributions under a different pension plan (previous job) to my current one and there's a shortfall. i think it's best if i accept the transfer and pay the shortfall. anyway, i need someone to talk to.