Author Topic: Investing outside of RRSPs for couple with a dual Cdn/US citizen  (Read 603 times)

plainjane

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Investing outside of RRSPs for couple with a dual Cdn/US citizen
« on: September 05, 2015, 08:55:42 PM »
Player One - Canadian resident
RRSP maxxed out, mix of TD e-series, Tangerine Streetwise, and index funds through work plan
TFSA maxxed out, Tangerine Streetwise
Marginal tax rate: 31%

Player Two - Dual US/Canadian citizen
RRSP maxxed out, mix of TD e-series, Tangerine Streetwise, and index funds through work plan
TFSA closed due to US tax code issues
Marginal tax rate: 43%

Currently following, more or less, the balanced Couch Potato (target 35% bond, 20% US, 20% International, 25% Canadian equity) for TD, Balanced Growth for Tangerine (25/25/25/25). Players currently have similar amounts in their RRSPs.

In roughly 5 months we expect to have an extra ~2k/month available to invest. My challenge is how to do this the smartest way. AFAICT, nothing is tax advantaged for Player Two outside of RRSPs, because US equity ETFs get dinged by the Canadians, and Canadian equity ETFs get dinged by the Americans.

So, I think the first move is to open a taxable account in Player One's name, and going forward buy Canadian ETFs there instead of in RRSPs/TFSA like we are now.   Since there is too much new money for us to put it all into Canadian ETFs, we also buy some US ETFs in Player One's name, so that our purchases aim for our target allocation.  (I'm thinking Questrade & Vanguard.)

General question: does this make sense?  Should we be doing something differently?

Specific question: If we do this, Player One is going to be holding the majority of the HH assets when we RE in 7-9 years.  Would it make more sense for Player Two to buy the US ETFs? (note: current marginal tax rates would support more assets in Player One's name but during draw down Player One would then have a larger taxable asset base)