Author Topic: Moving from Taxable Account to RRSP  (Read 1360 times)

climatechanger

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Moving from Taxable Account to RRSP
« on: August 26, 2014, 09:11:17 AM »
Due to prior tax ignorance, I opened up a online trading account a few years ago because it was much cheaper than buying stocks through my financial advisor.  Plus, I was interested in seeing if I could BEAT THE MARKET myself. 

Now because of MMM and Canadian couch potato I know better, but my online trading account is not a registered account. So my question is - when should I switch over?  I've now opened a RRSP with my online broker that I will be able to transfer my ETF's over to but I would like advice as to how quickly I should do this.

Non registered Account - $47000
Room in RRSP - $55000

2014 income - around $30000
Future income - $15-  $20000

I started semi- retirement this month

I'm thinking it would be better to move to the RRSP slowly because I will not be lowering my tax bracket. Perhaps moving enough over to just bring me to the basic personal amount thats tax free?  Is that wise?

rocketpj

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Re: Moving from Taxable Account to RRSP
« Reply #1 on: August 26, 2014, 02:46:04 PM »
Not an expert, but it seems practical to bring over enough each year to reduce your total tax paid to zero each year, then save the rest for future years.  Certainly moving extra over that amount would be a waste.  Up to that point moving it over amounts to an instant 'gain' of whatever the marginal tax rate you would have been might be - which would compound fairly quickly.

It also depends how old you are.  At 71(?) you need to convert all RRSPs into an RRIF and start taking income from them (and paying taxes on that income).  So if you are 40 that's not a big deal and the payoff will be worthwhile.  If you are 65 it is a different story.  It might still be worth it, but it is different.

You might also consider moving some of that money into a TFSA, which will then be tax sheltered forever - income and withdrawals.

AssetGrinder

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Re: Moving from Taxable Account to RRSP
« Reply #2 on: August 26, 2014, 05:30:07 PM »
I would suggest speaking with your accountant to see how much to move over. As far as transferring its pretty easy. Contact your brokerage and they will journal them over however they will be journaled over at that days market trading range. So choose a price in the range that suits you for capital gains or losses. I transferred 96k over in a day because I am in the lowest tax bracket as I dont have a salary.