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Me and Mrs Clipperton would like to open TFSAs, and we're trying to figure out how much money we're allowed to put in them. She's a Canadian citizen but we've been living outside Canada since 2007, and she's only been a resident of Canada since July 2012 so I'm assuming her contribution room is $10,500 ($5000 for 2012 + $5500 for 2013). I've been a resident since December last year BUT I only became eligible for a TFSA (ie got a SIN) in 2013. So is my contribution room $5500, or $10,500, or what?
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Oct 30, 2013 21:41
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Kal Torak posted:You are correct, your wife would have contribution room of $10,500 and you would have $5,500. Thank you! Also: tuyop posted:I think it's important to point but that the MER on those ING funds is just a portion of the costs related to active management. You also have to deal with the hidden costs of spreads, commissions, capital gains, and so on. These costs vary and can go up to something absurd like 10%, especially in good market years. Do you mean by this that ING Streetwise funds have costs in addition to the 1.07% MER? I read the Canadian Couch Potato paper on them and I don't remember anything like that. Sorry, I have a fingernail grip on all this poo poo so there's probably something hugely obvious I'm missing.
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Oct 30, 2013 21:52
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tuyop posted:Without doing a ton of research on my part, and assuming that that is an actively-managed fund (judging by the MER, it is), then yes. I mean that. Whenever you buy or sell a stock, including if you are a fund manager, you have to deal with the following costs, among some others (I don't remember the exact list): As far as I know (and I'm mainly going by the CCP paper I linked in my last post here), it's not an actively-managed fund, though: quote:The Streetwise Portfolios are a family of index mutual funds launched in 2008 and sold online exclusively by ING DIRECT. And then later: quote:Moreover, in terms of overall costs—including trading commissions and administrative fees—the Streetwise Portfolios may even come out ahead. This is because the 1.07% MER is the only cost associated with the ING DIRECT funds. By contrast, ETF investors typically pay a commission of $10 to $30 for every transaction. Most discount brokerages also charge an annual fee on RRSPs below a certain minimum ($100 plus tax for accounts under $25,000 is common). Some even charge inactivity fees when clients don’t make enough trades. These additional costs can easily wipe out any potential savings from using ETFs with a lower MER. Bolding is all mine. Again, I don't pretend to know jack poo poo about any of this, just trying to figure it all out.
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Oct 30, 2013 23:24
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tuyop posted:I just ran that through a quick calculator (1k initial investment, 20k annual contribution), and over ten years that difference in MER accounts for $7 700 in additional fees, which is about 3.6% of your principal, so it's not insignificant. I don't think there's any danger of us contributing even close to $20K a year 
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Oct 31, 2013 15:31
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