Drowning in information

[hecallsmehisown]

Hi Everyone, I’ve been reading as much information as I can find but I think this has been to my detriment. I’m totally drowning in information and hopefully someone can give me specific instructions on how to setup investment accounts.

I bank with TD and Tangerine, but will be consolidating at TD. I *think i want to setup monthly pre-auths to buy TD e-series funds following CCP method.

Pertinent information: I make approx $80K, hubby makes $90K. I have a TFSA, but there’s nothing special about it - strictly savings no investments/RRSPs. We own a house and contribute about $400/mth to RESP’s for our 2 small kids.

Q’s: What should I hold in RRSPs (for spouse) ? What should I have in the TFSA?
I’ll be going into the bank to setup these accounts and would like to know specifically what I”m asking them to do.
Help?!

 

[jjp297]

@hecallsmehisown To buy TD's e-series, you have to open a TD Direct Investing brokerage account (TFSA and RRSP accounts) From there you can buy the e-series.

For which e-series, it depends on your risk tolerance: https://www.vanguardcanada.ca/individual/questionnaire.htm#/

And portfolio options here: https://cdn.canadiancouchpotato.com.../CCP-Model-Portfolios-TD-e-Series-Dec2020.pdf

 

[mormarw]

@hecallsmehisown Given your situation it would probably be fine if you invested in either your TFSAs or your RRSPs, probably not a big deal which one you pick. I would focus on that over the RESP... it will be better for your kids to pay off student loans for 4 years of school than to support their parents for 30 years of unfunded retirement.

Don't go to a bank. Use a discount brokerage. Buy ETFs.

Go to the Canadian Couch Potato site, and read up, keep it simple, diversified and cheap.

 

[hecallsmehisown]

@mormarw To clarify, I’m looking for a tax savings for my spouse. I typically get a return, but he does not, and we are looking to contribute an additional $12000/year (at min) to either investments/tfsa in addition to the RESP. The RESP is a non-starter for us....I started life with massive student loan debt and it was crippling.

 

[zango11]

@hecallsmehisown

I typically get a return, but he does not,

A return is what you file. What you "get" is called a refund.

The fact that you get a tax refund and he does not simply means that you give the government an interest free loan throughout the year, while he does not.

 

[mormarw]

@hecallsmehisown If you're looking for a big tax refund for this year then he should put more money into his RRSP end of story... really short sighted way to plan things though. The ideal should be to save income tax over time. Note, if he uses the RRSP, gets a refund, and spends it, then he is borrowing from his future self.

So the recommended for retirement savings is 15% as a baseline... at your combined income that would be $25K that you should be putting into retirement savings...

 

[hecallsmehisown]

@mormarw The $25K or 15% baseline - does this include our pension plans, or in addition to?
\

 

[mormarw]

@hecallsmehisown Wait you have pension plans and you omitted that when asking this question?

Come on why ask a question like this missing huge pieces of extremely important info.

 

[resjudicata]

@hecallsmehisown Do you or your spouse have a pension with your employer? If so what type?

 

[hecallsmehisown]

@resjudicata Yes, I’m enrolled in the CAAT Pension DB Prime plan, and spouse is enrolled in the Sunlife Group Choices RSP

 

[asmodea]

@hecallsmehisown

I have a TFSA, but there’s nothing special about it - strictly savings no investments/RRSPs. ... What should I hold in RRSPs (for spouse) ?

I'll trigger the bot that may help you decide if you should start using your RRSP contribution room. !TFSARRSPTrigger The following articles may also help you make the decision.

https://www.planeasy.ca/tfsa-vs-rrsp-pick-the-right-one-and-save-100000/

https://www.planeasy.ca/canada-child-benefit-hidden-tax-rate/

 

[mb114901]

@hecallsmehisown To buy TD-E series funds you shouldn’t need to talk to the bank, you can do it all online (i.e. open a TD Direct Investing TFSA account) and start buying the funds once everything is approved which takes a few days. Then you can set up SIP (systematic investment plan) that will automate monthly contributions into each of the funds.

 

[zango11]

@hecallsmehisown First off, you both have pensions so additional retirement savings may not be particularly important. Make sure you follow the money steps and don't invest additional money until you reach Step 5: https://www.reddit.com/r/PersonalFinanceCanada/wiki/money-steps

I’ll be going into the bank to setup these accounts and would like to know specifically what I”m asking them to do. Help?!

Be careful - the bank will gladly open these accounts for you, even if there are better things you should be doing than investing.

We own a house and contribute about $400/mth to RESP’s for our 2 small kids.

Lets start there. Where are the RESPs held and what are they invested in?

 

[hecallsmehisown]

@zango11 TD Mutual Fund RESP Aggressive Growth Portfolio.

 

[zango11]

@hecallsmehisown So if you are happy with that for your RESPs, and if you are at Step 5 of the money steps, then you would probably want to get TD to open a TFSA each for you and your spouse, and invest roughly the same way.

For the TFSA vs. RRSP question, I suggest TFSA simply for the fact that you and your spouse already both have pensions. TFSA allows for flexibility during retirement to "top up" your steady pension income whenever you need more.

People here will be quick to point out that TD Mutual Funds have high fees. At a 2% fee, for every $10,000 invested you would pay $200 per year. It certainly will add up year after year, but can be dealt with in the future when you have more money invested. Remember that TFSAs, RRSPs, or RESPs can be transferred to different institutions quite easily if you ever decide in the future that you would prefer to invest in lower cost products.

 

[hecallsmehisown]

@zango11 Thanks for working through this with me.
Yes, I did notice the 2% fees for the RESPs, and I am interested in pursuing something cheaper - but where to put it? Since we have another 12 years saving on this, I’d prefer to move it now.

 

[zango11]

@hecallsmehisown Justwealth is a robo-advisor that specializes in RESPs and has "target date" RESPs at a low cost. If you transfer your RESPs to them, they can put the RESPs into funds that automatically become less risky as you approach the date you need the money. These you can really "set and forget".

For your TFSAs, since you indicated you want to stick with TD, you could potentially check out "TD GoalAssist" which lets you invest in TD ETFs commission free. It is a fairly new offering, and I just checked and unfortunately they don't have RESP accounts yet. I suspect that given a couple of years they may add them.

 

[dingding]

@hecallsmehisown Move your savings to a 1.5% HISA with Eq Bank. Beats all the other banks by miles. Use my EQ bank referral code to earn $20 on your first $100 deposit.

https://join.eqbank.ca?code=RILEY2265