Author Topic: Transferring Non Reg to TFSA  (Read 1355 times)

J.Milly

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Transferring Non Reg to TFSA
« on: December 29, 2015, 12:17:21 PM »
Hi guys,

Quick question. I have an Employee Share Purchase plan with work (big bank in canada). I've accumulated a market value of $5818, with a book value of $5594. We don't have the option of directly putting it in a TFSA. Is it worth it to transfer in kind into my TFSA and sell it there? I know it's a deemed disposition and I'll pay for the value difference on my taxes (30% tax bracket), but is it worth while? The only reason I haven't yet is that the company matches a % of your contributions, and any dividend kicked off is matched as well. But honestly for the 6$ in dividend match they gave me on 12$ who cares.

Opinions?

P.S. If I were to put it in the TFSA it would be sold off and put into a market index fund.

 

Stasher

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Re: Transferring Non Reg to TFSA
« Reply #1 on: December 29, 2015, 12:49:39 PM »
Are you certain that this employer plan is not a RPP ? If it is you won't be able to withdraw it until you are 65 or otherwise transfer it into a LIRA. Easiest way to tell is on your paycheque, is it taken off prior to deductions or is it lasted under deductions? Being its a company plan are you aware if there is any MER fee? How long have you been contributing to this plan and are you able to gauge the rate of return? Are you currently maximizing your contribution level that they will match up to?

Basically just trying to have you look at the pros and cons to why you would want to transfer out of this plan.

J.Milly

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Re: Transferring Non Reg to TFSA
« Reply #2 on: December 29, 2015, 01:03:39 PM »
Thanks for the reply Stasher.

It comes off after tax, it isn't in an RPP, they give us that option but I chose Non-Reg. It is in just the company stock.
For the stock plan there is no MER associated, in my company RRSP the mutual funds have an MER but the index funds are ridiculously low, 0.02%

I've been contributing since I've been allowed, slightly over 2 years. I contribute up to the max they allow, 6% of salary, and they max up to 3.5% of earnings up to a max of $2250.

I mean to be honest, the return has been kind of flat over the last few years, since July of 2014 we have the same share value but it is a dividend paying blue chip, dividend yield is about 3.6%.


Stasher

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Re: Transferring Non Reg to TFSA
« Reply #3 on: December 29, 2015, 01:32:32 PM »
Thanks for the reply Stasher.

It comes off after tax, it isn't in an RPP, they give us that option but I chose Non-Reg. It is in just the company stock.
For the stock plan there is no MER associated, in my company RRSP the mutual funds have an MER but the index funds are ridiculously low, 0.02%

I've been contributing since I've been allowed, slightly over 2 years. I contribute up to the max they allow, 6% of salary, and they max up to 3.5% of earnings up to a max of $2250.

I mean to be honest, the return has been kind of flat over the last few years, since July of 2014 we have the same share value but it is a dividend paying blue chip, dividend yield is about 3.6%.

I would suggest only depositing to the max that they will match , 3.5% of salary. Then I would be certain to take that 2.5% you normally put into here and invest in your company RRSP if you like the fund they offer otherwise invest into a brokerage self directed RRSP outside of work. Maximize your RRSP contribution limit as you are in a higher bracket and then after that max out your TFSA.