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My Experience with Manulife
February 5, 2018
4:51 pm
Save2Retire@55
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As I always like to talk about my experience with different financial institutes. Here is what happened with Manulife. I was enrolled in RRSP plan through work. There was contribution from work which was the only reason I took this plan. I have been using them since Oct 2013 till Jan 2018.

I have had 25% in Canadian stocks, 30% in US stocks, and 45% in two different Global and International stocks. (These are all mutual funds).

Considering all the management fees are paid by the company, knowing that the yearly interest was 3.4% is a big disappointment (12.4% for the past 1 year). Their management fee is 1.8% yearly. If they deduct that, I would end up at 1.6% yearly. Why do people even use these funds? Don't people know about the availability of higher with no headache interest rates?

I am leaving my current employer so I in the process of moving half of the fund to a separate LIRA (Locked) and half to regular RRSP. Haven't decided where to move them but looking @ the bleeding sell off makes me wonder if I should just go with one of the available GICs. Maybe a 5 year GIC for something over 3.2%.

February 5, 2018
6:09 pm
Wayno
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If you are not in equities, rather than putting all your RRSP money in One 5 year GIC term, consider starting to build a 5 year ladder, that gives you the flexibility to withdraw RRSP funds, for tax purposes, in any given year.

The restrictions with a LIRA makes it important to have future yearly RRSP withdrawal options available because employment situations change.

February 5, 2018
7:21 pm
Trump
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I am NOT a huge fan of ManuLife. I have withdrawn a lot over the years by keeping in the lowest tax bracket and use the funds to fully fund our TFSA accounts. I had some other GICS that ManuLife acted as an agent and the GIC was in Coast Capital so at maturity I was able to move the GIC from Coast Capital to my Coast Capital personal account and then move to either Hubert and Oaken. I saved $100 in transfer fees each time as ManuLife charges $150 for a transfer and Coast Capital only charges $50. Coast Capital dragged their feet the second time as they saw my "pattern". They are such sore loosers!!!! My ManuLife adviser stepped in to get the transfer moving. I have very little left at ManuLife and what I have will only generate around $3000 interest in a 5 yr. GIC....so does paying 150 a year plus tax for self directed fees make sense? Make $3000 and give ManuLife $750????

With the GIC rates today and possible to increase I would put it all in the 5 year if you do NOT need the money for quite awhile. Other wise I would do the 5 year ladder to and then renew every year for 5 years to get the best 5 year rate...blended. Or most in a 5 year and estimate what your needs might be for the next 5 years and take that amount divided by 5 and do the ladder.

ps. I have yet to figure out what the $150 self directed fee gives me as it goes to ManuLife not the advisor. Or is it like a money making surcharge?

February 5, 2018
9:28 pm
Loonie
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Achieva is one of the few high interest FIs that accepts LIRA accounts.

If I were going to go into GICs at this stage, I would buy 1, 2,3,4 and 5 yr GICs, dividing total sum by 5. Then, as each one comes due, I would move it to a 5 yr GIC. In terms of GICs, this appears to be the safest route in a rising-interest environment.

I couldn't really follow your paragraph on the mutual funds, so can't comment on that. However, mutual funds per se are rarely worth their management fees, and hardly ever on a consistent basis. They are indeed losing favour to ETFs.

There was a lot of angst today about the market correction, causing a certain amount of hysteria by saying it was the biggest drop in history. That is misleading. It was perhaps the biggest drop in absolute numbers, but not as a percentage of the total, not by a long shot.

That said, you never know what tomorrow will bring in the stock market, and that's why I avoid it. It's even crazier today with all the automated sell orders. One has to have a thick skin.
Perhaps, as you're much younger than I, you could still make it work with ETFs.

February 6, 2018
6:03 am
Save2Retire@55
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Ladder is a great idea and I think it makes sense. Maybe I do 2 years to get a better rate. I don't need the money and I don't want to withdraw to avoid paying tax as well.

February 6, 2018
7:06 am
Trump
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Save2Retire@55 said
Ladder is a great idea and I think it makes sense. Maybe I do 2 years to get a better rate. I don't need the money and I don't want to withdraw to avoid paying tax as well.  

That is what I thought. You don’t need the money right now as you are still working. The best time to take funds from RRSP is in your days of lowest income....ie retired or unemployed.
Here is an example of $50,000 in a 5 year ladder. Rates right now are pretty good to take a 1 2 3 4 5 year GIC. Then with the unknown future of rates you renew 1/5 every year for another 5 years. Then you will have a blend of the highest rates and have 1/5 available to you every year.

February 6, 2018
12:22 pm
Save2Retire@55
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Wouldn't managing it be a challenging task? Keeping track of what is what is already confusing me and looking at my Excel sheet with all the complicated mathematical rules is giving me a headache.

February 6, 2018
12:59 pm
mmlt
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There's a couple tv commercials about the high cost of investment management I've noticed recently.
As far as I'm concerned, these portfolios banks, credit unions, etc. pressure customers into signing up to weigh heavily on the scammy side.

February 6, 2018
1:39 pm
Joint
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mmlt said
There's a couple tv commercials about the high cost of investment management I've noticed recently.
As far as I'm concerned, these portfolios banks, credit unions, etc. pressure customers into signing up to weigh heavily on the scammy side.  

could not agree more , most of the info is self serving .and the question remains should you by any thing from them at all ever

In a CBC interview I heard once I was told that most books on investing are written for people who make over 50,000 per year but they do not state that

And when I took a course to be a financial planer ( I want to see if their was any thing to this ) much the same was said as we were all ways making financial plans for people who made 100,000 or more and at one point we ( people in the class ) asked how do you plan for say a car mechanic or baker and was told CCP and OAS would look after them by the instructor

February 6, 2018
5:36 pm
Loonie
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Save2Retire@55 said
Wouldn't managing it be a challenging task? Keeping track of what is what is already confusing me and looking at my Excel sheet with all the complicated mathematical rules is giving me a headache.  

No, it's not really that difficult. Just do i said in #4 above and don't overthink it. Getting started is perhaps the most work. To make it easy, just pick one FI where you like the rates in general. Transfer your RSP therer, divide it into five equal portions and put each one in a GIC (1,2,3,4,5 yrs). For the first few years you will not get as high a return as if you'd taken the full five years for all the money, but this is what you have to do to get started. After that, it will just run on its own basically, and all will be in five year GICs.
As each GIC comes due, you move it into a five-year GIC. There will only be one coming due each year, so you just look around for the best rate or wherever you want to put it, and reinvest it, or you can just let it roll over. You do this in perpetuity, once a year - or until you decide on some other investment policy.
If possible, I would arrange it so that I made these investments in late November or early December. That way, they will alwys be coming due at that time of year. When it comes time to withdraw the funds, this will enable you to make a decision near the end of the year as to whether you want to withdraw a lump sum for tax purposes, and it will be at a time of year when you have a good handle on your taxable income for that year.

February 6, 2018
5:41 pm
Loonie
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Joint said

could not agree more , most of the info is self serving .and the question remains should you by any thing from them at all ever

In a CBC interview I heard once I was told that most books on investing are written for people who make over 50,000 per year but they do not state that

And when I took a course to be a financial planer ( I want to see if their was any thing to this ) much the same was said as we were all ways making financial plans for people who made 100,000 or more and at one point we ( people in the class ) asked how do you plan for say a car mechanic or baker and was told CCP and OAS would look after them by the instructor  

Have you ever noticed how most of the articles that deal with income tax and how to minimize it assume that the person is in a 50% marginal tax bracket? This is exactly where the vast majority of Canadians are NOT!

Really stupid of that professor to assume that people with moderate incomes don't have much in assets. However, it's perhaps best for the moderate and low income earners if financial planners like him never get their hands on those assets! They could make them disappear in no time!

February 6, 2018
7:17 pm
Save2Retire@55
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Thanks everyone. I think I am comfortable to start the ladder 🙂 I will have to make a decision in 2.5 months. And as mentioned, I will most probably have to open new accounts with one of Manitoba financial institutes.

I hope they can cover the $100 charged by Manulife to take the fund out.

Funny, I got a letter today from one of their so called Financial Advisors telling me to contact him for help (Not sure if he meant I help him making more $$ or the opposite!)

February 6, 2018
7:37 pm
Loonie
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Save2Retire@55 said
Thanks everyone. I think I am comfortable to start the ladder 🙂 I will have to make a decision in 2.5 months. And as mentioned, I will most probably have to open new accounts with one of Manitoba financial institutes.

I hope they can cover the $100 charged by Manulife to take the fund out.

Funny, I got a letter today from one of their so called Financial Advisors telling me to contact him for help (Not sure if he meant I help him making more $$ or the opposite!)  

Generally, the FIs that charge transfer-out fees will reimburse; the ones that don't (Hubert) will not. The ones that will do so may not go up to $100 if they themselves don't charge that much.

February 6, 2018
8:43 pm
Trump
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Save2Retire@55 said
Wouldn't managing it be a challenging task? Keeping track of what is what is already confusing me and looking at my Excel sheet with all the complicated mathematical rules is giving me a headache.  

I quess you can do it on paper to track by GIC number or? I have a humongous excel file for GICs and more and each line can have a number of codes ie.. TFSA RRSP, a code where it came from, etc etc. Then I use the @if command to isolate values by code and year of maturity and from there display my 5 year ladder results for a specific code.

February 6, 2018
8:55 pm
Trump
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Save2Retire@55 said
Thanks everyone. I think I am comfortable to start the ladder 🙂 I will have to make a decision in 2.5 months. And as mentioned, I will most probably have to open new accounts with one of Manitoba financial institutes.

I hope they can cover the $100 charged by Manulife to take the fund out.

Funny, I got a letter today from one of their so called Financial Advisors telling me to contact him for help (Not sure if he meant I help him making more $$ or the opposite!)  

Save2Retire@55 said
Thanks everyone. I think I am comfortable to start the ladder 🙂 I will have to make a decision in 2.5 months. And as mentioned, I will most probably have to open new accounts with one of Manitoba financial institutes.

I hope they can cover the $100 charged by Manulife to take the fund out.

Funny, I got a letter today from one of their so called Financial Advisors telling me to contact him for help (Not sure if he meant I help him making more $$ or the opposite!)  

Try to get the new FI to cover fee but if not, don’t worry as the GIC rate you get from Oaken Hubert or Acclerate ..... you will make far more than that $100 based on the crappy rate Manulife will give you and keep in mind you adviser gets .25%. Also for registered GICs use an FI that has an associated savings account for YOUR flexibility at maturity time. Oaken does not have ....but.... on the other hand their transfers are free.....so you have to preplan for what to do at maturity.

February 7, 2018
11:19 am
Save2Retire@55
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I will 100% move it out. I just need to check the rates and decide.

Thanks everyone.

February 7, 2018
12:28 pm
semi-retired
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Save2Retire@55 said
I will 100% move it out. I just need to check the rates and decide.

Thanks everyone.  

Another thing to consider with the ladder system with RRSP's.Have a FI with a "daily interest RRSP account" to run ladder out of.When a GIC comes due it is deposited in it,any RRSP deposits for that particular year can then be added & then the total moved into the next 5 year term.

February 8, 2018
2:41 pm
Save2Retire@55
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semi-retired said

Another thing to consider with the ladder system with RRSP's.Have a FI with a "daily interest RRSP account" to run ladder out of.When a GIC comes due it is deposited in it,any RRSP deposits for that particular year can then be added & then the total moved into the next 5 year term.  

Good point. All I have now accumulate daily but paid monthly.
And just to make this case even worse, my total fund lost 3.2% of its value in just 2 weeks (Crazy market).

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