Author Topic: Helping father with investments (canada)  (Read 1253 times)

fullpampers

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Helping father with investments (canada)
« on: May 04, 2017, 08:38:02 AM »
I'll try not to make a long story out of this.

My father (who is disabled, getting disability pension), has 37K in RRSPs, which are with BMO right now. They are in two funds, which were chosen for him, one mutual (2.38% MER) and one ETF (1.72% MER). They both have similar Asset Allocations, which are pretty much a normal Index ETF portfolio AA (something along the lines of what Canadian Couch Potato recommends).

He asked me to check on it, because he doesn't know what to do. I am going to recommend he (read: "I") opens a Questrade account and just uses a standard CCP 3 funds ETF portfolio, which would be along the lines of 0,15~0,20% MER.

I know it's not a whole lot of money, my parents get by on my mother's pension and my father's disability check. Since I went to make a budget with them and check on their spending, my father stopped withdrawing from his RRSP for stupid shit he used to buy on the internet. So basically I just want to cut MER's to a minimum, so he doesn't slowly loose money over time.

I don't think he would need that money unless of an emergency. So basically I'm just trying to conserve capital, while cutting back on fees, so he has most of it when he needs it.

Am I fucking up? I just wanted to be sure, since it's not my money... I'm guessing I'll go with one of the "safer" CCP portfolios since he is over 60.

Thanks

J-S

Prairie Stash

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Re: Helping father with investments (canada)
« Reply #1 on: May 04, 2017, 11:25:53 AM »
RRSP's are for saving to spend in retirement. What is his long term plan?

Depending on age is there any advantage to transferring the money out and paying taxes now? Then put the money into a TFSA so that in the future there won't be taxes on withdrawals. RRSP withdrawals limit OAS and GIS payments; as he gets older the money will be converted to a RRIF and he will be required to withdraw from the RRSP.

Of course it also depends on long term health. Maybe your mother will need that money later if he passes and the disability cheques stop.

RichMoose

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Re: Helping father with investments (canada)
« Reply #2 on: May 04, 2017, 06:37:35 PM »
I'll try not to make a long story out of this.

My father (who is disabled, getting disability pension), has 37K in RRSPs, which are with BMO right now. They are in two funds, which were chosen for him, one mutual (2.38% MER) and one ETF (1.72% MER). They both have similar Asset Allocations, which are pretty much a normal Index ETF portfolio AA (something along the lines of what Canadian Couch Potato recommends).

He asked me to check on it, because he doesn't know what to do. I am going to recommend he (read: "I") opens a Questrade account and just uses a standard CCP 3 funds ETF portfolio, which would be along the lines of 0,15~0,20% MER.

I know it's not a whole lot of money, my parents get by on my mother's pension and my father's disability check. Since I went to make a budget with them and check on their spending, my father stopped withdrawing from his RRSP for stupid shit he used to buy on the internet. So basically I just want to cut MER's to a minimum, so he doesn't slowly loose money over time.

I don't think he would need that money unless of an emergency. So basically I'm just trying to conserve capital, while cutting back on fees, so he has most of it when he needs it.

Am I fucking up? I just wanted to be sure, since it's not my money... I'm guessing I'll go with one of the "safer" CCP portfolios since he is over 60.

Thanks

J-S
Yeah I think it's worthwhile to transfer RRSP to Questrade, even at that low value. I would also suggest looking at liquidating the RRSP and moving the money to a TFSA. Between your dad and mom they should have over $100,000 in TFSA room. By completing the Successor Annuitant forms, in the event of your dad's death the money in a TFSA would move over to your mom 100% tax free and not affect her TFSA room at all. (A must for anyone else reading this as well).

If their income is low enough they should be able to liquidate the RRSP at a very low tax rate. I guess you'll need to do some math on that.

Al1961

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Re: Helping father with investments (canada)
« Reply #3 on: May 04, 2017, 07:22:46 PM »
You mentioned that your father is disabled. Maybe check into starting a RDSP. Because of federal government matching grants, it may be worth incurring taxes on RRSP withdrawals to fund the plan.

I'm not really up to speed on them, so there may be issues like minimum holding periods before withdrawing funds.... Worth a look.

fullpampers

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Re: Helping father with investments (canada)
« Reply #4 on: May 08, 2017, 01:54:14 PM »
Thanks for the suggestions, i'll read up on RDSP's and do the math on withdrawing the RRSP for a TFSA transfer and I'll talk to my father.

I guess he doesn't have any long term plans. He just hasn't been on top on things and wants to save what he can.

In french we have an expression "sauver les meubles" not sure what it translates to in english ("save the day"?) but it's basically making the best of a shitty situation...

Thanks!