Investment Q&A

Q: Good morning
My wife and are both under age 65. Each have an RRSP and my wife has a spousal as well.
She has the higher income.
Should we withdraw from the Spousal RRSP can I claim it on my Taxes as I have the lower income?
Thank you
Mike

Q: I am trying to weigh the after tax consequences of withdrawing my entire RSP this year with a RIF alternative of withdrawing funds over say the next 15 yrs. I collect both CPP and OAS. Can you point me in the right direction as to how or where I could have the various scenarios "modeled"?
Thanks,
Terry

Q: Dear 5i
I know this question may not be in your area of expertise but I'm sure you have a good idea of the answer .
I have an RRSP , my wife has an RRSP , and my wife has a spousal RRSP .
She has an income (employment ) as do i so you might argue that both of us have contributed to her spousal RRSP .
The question is , at the time of retirement when we are drawing income , who claims the income coming out of the spousal RRSP .
Knowing the answer to this determines at least to some degree what investments are in what account . The aim of course is for each of us to draw out the same income so as to be tax efficient .
Appreciate your input .
Thanks once again .
Bill C

Q: Could I have your top 3-5 Canadian stock recommendations (any sector, growth focus although dividend would be nice) for a RESP? Present value is $30k with about 50% in US/EAFE ETFs, and 10% in XIC. The rest is in Canadian banks, utilities, telecoms. No withdrawals needed for 12 yrs.

Q: I have an RRSP account that I have had for years with only mutual funds in it. It doesn't have very much growth and I'd like to do something else with the money, but don't want to pay it a lot of attention, but rather let it sit in the background and grow for the next 15-20 years. It represents about 25% of my total holdings. All my other accounts are fairly balanced, mostly with your recommendations, but I realize I have no REITS at all. I'm wondering about rolling this one into a group of solid dividend producing REITS. Are you able to mention 5 or so that would be diverse and relatively safe for this kind of hold? If you find 20% too large of a position for REITS please suggest some other larger stable co's that I could buy and forget. Thanks. Kim

Q: We have $60,000 D.un in a RRSP which is about 3% of our total portfolio.
We would like to sell (yes?) and replace with two better income equities for the RRSP.
68 years old.
What do you recommend?

Q: What is the most tax effective way to hold US stocks? I’m 32 with a good income, and have a full balanced tfsa holding Canadian stocks and etfs. I’m interested in building an account to hold US dividend aristocrats/Kings set up on auto deposit/drips as a set it and forget it style account. From everything I’ve read the dividend aristocrats generally have returned better than market average with good security and fairly stable growth, would you agree? I own my own companies so my income is structured to be very low tax, so I don’t need the break offered by the rrsps but I do have quite a bit of contribution room there. Would you recommend rrsp for US holdings for tax reduction, or is there a more efficient way?

Thanks

Q: Since writing covered calls and cash-secured uncovered puts has the same risk/reward profile why is only covered call writing permitted in registered accounts? Is that a government regulation or an individual bank decision?

Thank you.

Milan

Q: Dear 5i
For two seniors retiring soon with an anticipated retirement income of $75-$80k , what would be the ideal sources/ types of income coming from her RRSP , his RRSP and her spousal RRSP ?
1- 100% from capital gains and or return on capital or
2-100% from dividend income or
3-Somewhere in between ,
with the view of minimizing tax consequences.
Obviously there will to some interest income which I'm aware is least desireable .
I`m figuring that the end result for sources of income is reflective of the balance of fixed income vs equity in the portfolio ie risk profile each person or couple is willing to accept or live with . In essence i think i`ve answered my own question but would welcome your input anyways .
Also any income or capital gains achieved from a TFSA would be the most favourable due to no tax consequences correct ?
Thanks once again .
Bill C.

Q: Ancient person would like your insight on whether or not best to make transfer out of mandatory RRIF deduction early in year or late?

Q: Hi. Wondering about what types of investments to put where. How about this:
Non- Registerred Account: Canadian Dividend payers to maximize the dividend tax credit.
Registerred Account: interest bearing instruments, REIT’s, MLP’s etc
TFSA: growth stocks ( Canada and International)
Appreciate your comments.
Thx Frank

Q: Could you tell me if i transferred all of my holdings, eg. Stocks, Etf's from an RSP into a TFSA, if i would take a tax hit? If i did, would it not make sense to do it, thanks?

Q: How do you recommend holding various investments? I am self employed with my own incorporated company, I am 32 so also have a long timeline. With my accountant we have structured my income to be very low for personal income tax. Do you recommended first filling tfsa then rrsp (since I don’t really need the write off) then moving to non registered for whatever’s left? Or do you recommend a continual mix or possibly omitting the rrsp to save on tax later in life? How do you generally decide what to hold in which account? I know lots of this would be specific to the individual but some general advice/opinion would be appreciated.

Q: Pretend you just came into $20,000.00. You deposit it to your RRSP so you can take advantage of the reduction to your income and lower marginal tax rate. Without any consideration to the current portfolio, which stocks would you purchase today with growth and/or dividend income in mind OR would you wait for another market correction?

Q: I contributed to my wife's Spousal RRSP for several years, She is now working, can she now make contributions to this account or does she have to open a new RRSP?
Thank you
Cec

Q: In response to Donald, it appears ok to pay RRSP fees outside the RRSP as of right now. However, the CRA is currently reviewing this rule and says that may no longer be the case as of January 1, 2019. A Google search of "rrsp fees paid outside rrsp" will bring up many discussions on this topic.

Q: Hello 5i. Just wondered if you had seen the article on this topic in the Globe & Mail over the weekend. What it suggests is that dividends from US-listed ETFs held in an RRSP account are not subject to US taxes. However, the article states that this is not the case for dividends paid by Canadian-listed ETFs that invest in US stocks. In this case, dividends ARE subject to US withholding taxes, even if the ETF is held in an RRSP account. The article goes on to say that these taxes cannot be recovered. (Same situation would apply to mutual funds.)

Assuming the article got this, I'm not sure that all ETF investors are aware of this nuance.

Q: Hello Team,

I know you guys don't advise on tax questions but as simple as this one is no one seems to give me a straightforward answer. So, I hope you can help. Which of the following is right regarding RRSP contribution year for 2017:
1- 01 January 2017 to 28 February 2018 (14 months)
2- 01 March 2017 to 28 February 2018 (12 months)

According to an HR Block agent, it is option 1. According to a CRA agent it is option 2. I appreciate it if you are able to support your answer with a website reference from CRA?

Merry Christmas and Happy 2018!

Q: I tend to stay away from holdings that trade on US exchanges to avoid dealing with the withholding/reporting foreign tax rules. My portfolio needs an ETF with global exposure (mostly non-NA) Since there seems to be no good Canadian equivalent to VXUS, what type of trading account would you suggest to buy this ETF with the least/simplest amount of tax implication. Would the RRSP be completely exempt? Thanks.

Q: Hi Peter & team,

Over the years I have been focused on paying off my mortgage and putting the majority of any savings I have into my RRSP account and contributing into my child's RESP account. As a result, the RRSP account has over 80% of the savings that I have accumulated to this point while my TFSA and non-registered accounts total the remaining 20%. I finally have paid off my mortgage and I was wondering whether I should now be focusing on putting most of my money into the TFSA and non-registered accounts, so that the ratio between the RRSP/TFSA/non-registered accounts become more balanced? Is there such thing as a good balance between the 3 types of accounts?

Thanks for the wonderful work and all the insightful answers you provide.

Marvin