Investment Q&A

Q: Comment: If it's not "fair" to pay taxes when you withdraw from an RRIF, it's not fair to avoid the taxes in the first place. The trouble we all have in calculating our net worth is we forget about the taxes! The tax deferral just doesn't work as well for those of us with high incomes in retirement. I expect there arr many who think that's a good problem to have!

Q: Being 73, I saved most of my life to an RRSP which flipped to a RRIF @71, with mandatory withdrawals. In the process of doing estate planning, and with the RIFF, being taxed @50% of withdrawals which is a difficult pill to follow. Initially I was withdrawing cash, however after further consideration, this year I transferred loss position "Crescent Point".
1. Would it be best to try and tsf everything before you expire and pay the tax.
2. When you tsf, is it best to tsf your losers initially, and then the winners.
3. I assume there is no other means of elevating the tax on RIFF.

For sure, RRSP are great during your working years, but never considered the tax burden after retirement. As an example if you have a 1 million RRSP after taxes $500,000.00 Does not seem fair
Look forward to your rely and thanks for your service
Rick

Q: My current holding in one RRSP consist of the following:ABT
CSW.A
FR
GUD
IPL
ITC
PKI
PLC
RIC
SIS
T
TLT.V
BEP.UN
BPY.UN
CSH.UN
TOY

What do you think of this setup? Is there any additions that you would suggest? My time horizon is 20 to 30 years. Cheers
seamus

Q: Hi 5i team,

I am trying to save to retire early or if the doesnt happen then just have much more saved when I do. I know I should max both TFSA for my wife and I, but how much %-wise should I put in a registered vs a non-registered? I'm stilll 14 years away from my ideal retirement date and about 24 from my latest. Right now I have about 30% of my total saving in a non-registered account, and have yet to max out my wifes RRSP but should I just put it all in a registered account then use just the TFSA for liquidity? I'm sorry if the question is not quite within the purpose of 5i, but I do value you guy' opinion highly.

Thank you

Q: Whenever I rebalance my portfolio, I find it somewhat troubling that I am treating a dollar in my RRSP account as equivalent to a dollar in my TFSA account or a dollar in my unregistered account. I am very near to the time when I will be converting my RRSP to a RIF and withdrawing mandatory amounts starting at 5.28% and rising in subsequent years. I will have to pay tax on these withdrawals and my marginal tax rate is not much below 50%. Moreover, I do not expect my marginal tax rate to change much over the remainder of my life. This means those withdrawals will be worth only about half as much to me after tax. Of course, when I withdraw a dollar from my TFSA or my unregistered account I get to keep the entire dollar. So I am inclined to treat a dollar in my RRSP account as equivalent to just 50 cents or so when I am totalling up my total assets and doing the rebalancing. Does this make sense to you?

Q: I need to convert my RRSP to a RRIF by Dec 31. The portfolio is all GIC and bond ETF's. I want to add an equity factor to increase the total return that will cover the early minimum withdrawal requirements. For each sector I want to pick one larger stock that is stable and fairly valued vs an equity etf. I picked BNS.NFI,MG,ATD.B,OTC,BCE,BEP.UN,ENB,GUD and CCL.b.

What do you think of the selections and any other thoughts you may have? Thanks

Q: Your comments please on ITC's earnings report.
Thank you

Q: Hello,
Is it possible to use a portion of my RRSP or LIRA to invest in an apartment building ? How complicated is it in terms of forms to fill and accounting. Would the net rental income remain tax free in a segregated account ? Thank you for your help and please fill free to include website with relevant information in your answer if you know any. Thank you.

Q: I noticed that you have this stock on the Income Portfolio, if you could only choose one technology for a RRSP from all 3 portfolio that you cover would you choose still ET or one of the other tech stock that you cover? This is for a long term hold. If you were to choose another stock which one would it be?

Thanks

Q: My son is diligently saving to purchase a house and currently is taking advantage of the benefits of a TFSA. I have mentioned that he should also consider opening an RRSP to take advantage of their home buyers plan. He can contribute an extra $15k and get an additional 35% tax refund. He has about a 4-5 year time horizon before he needs the money. Is this sound advice? Can you recommend what stocks he should consider?
Thank you

Q: I have searched but cannot find out if interest on US bonds held in a RRSP are taxed (i.e. withholding tax)? I am aware that US dividends in a RRSP are not. Thank you for your help. Peter

Q: Hi,
I remain somewhat confused about which account it's best to hold Dividend paying stocks in. I've noticed some responses where you indicate it's best to hold the dividend payers in non registered accounts and higher growth stocks (capital gainers) in a registered TFSA or RRSP account.
For whatever reason, I assumed the opposite as I thought receiving dividends was more along the lines of receiving income (i.e.- cash) so it would be best to put these into your registered accounts to lower the tax bill.
So, in my situation, as I receive approx 60k in annual pension income- am I better to put the dividend payers into the registered or non registered accounts to keep the tax bill as low as possible.
Thank you.

Q: My son is currently 39 years old and is trying to develop a solid diversified portfolio. All of his holdings are in his RRSP except for some money in a Tangerine International growth fund which is in his TFSA. He has some new funds to add to his holdings. Could you please recommend some companies from your model portfolios that would add more diversification to his portfolio keeping in mind his relatively long investment horizon. As always, thanks for your advice.

Q: I am confused. The 30 day rule for buying a stock you sold only applies to a cash or margin account and only applies to losses not gains on that stock. The 30 day rule doesn't apply in an RRSP, RIF or TFSA account. Is this true? Thanks.

Q: I have heard that at higher incomes dividends can be taxed more heavily than capital gains. If true, at what income point does it make more sense to hold dividend paying stocks in a non-registered account instead of in an RRSP?

Q: CSH has dividends in something called CAPITAL DIVIDENDS. As I understand it, these dividends are not taxable. Does this mean the cost base goes down by this amount, or what? In a related question, is it best to hold CSH in an RSP (where I currently have my units) or in a taxable account. Should I sell CSH in the RSP and buy it back in the taxable account, adding something else into the RSP?

Q: Hi Peter,

if I buy any US stock in my RRSP account and sell it on same day,will it effect on my tax?
or it would be ok with day trading on US stock in my rrsp?
Thank you
KT

Q: Saw George's question regarding US dividend withholding tax rate, just a reminder, don't forget to complete the W8BEN form and submit to your financial institution, once completed, the form is good for 3 years and need to be renewed before expiry. With the form on file, the US withholding tax is 15%, otherwise, it will be 30%.

Q: What happens to US dividends received in a RRSP? Is the 30% withdrawal tax applied?

Q: Hi 5i,
Following your Q&A for awhile and I have built this as my RRSP.
I have another $20,000 to invest. Looking for two more names (or more for choice). Very long term...kind of a buy and hold person.
Appreciate your advice and direction.
Thanks Paul