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RRIF GIC account withdrawal rule - Is this normal?
May 11, 2023
3:28 pm
NCC1701Z
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Talked to Motive today and they told me I cannot withdraw more than the minimum percentage of the total of all my RRIF GICs regardless of when the underlying GIC's mature.

So, if I have 100k with them and my minimum is 5% I cannot withdraw more than 5,000 that year even if one of the GIC's matures that year.

My plan was to create 10 10k GIC's with 1-10 year terms to be able to collapse the RRIF in 10 years but with this policy I cannot withdraw the matured GIC if it exceeds the minimum of all RRIF's with them

Is this similar to other institutions?

Is there another strategy I could use?

I have 5 years before I must convert to a RRIF

May 11, 2023
3:41 pm
AltaRed
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I think you need to talk to a different person. If a GIC matures this year, you should be able to withdraw all of it on, or after, the GIC matures.

May 11, 2023
4:03 pm
Norman1
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That is an odd answer from Motive.

RRIF's don't have a maximum annual withdrawal unless it is a RRIF that's locked in under some pension legislation.

May 11, 2023
4:06 pm
NCC1701Z
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AltaRed said
I think you need to talk to a different person. If a GIC matures this year, you should be able to withdraw all of it on, or after, the GIC matures.  

I questioned her several times because it was so unbelievable . She also mentioned that Motive was a little different ! lol
Here's the number 1-877-441-2249

May 11, 2023
4:13 pm
AltaRed
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Someone else may want to check that out. I have all registered (actually all investment) accounts only with discount brokerages.

May 11, 2023
5:36 pm
Wayno
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Talked to Motive today and they told me I cannot withdraw more than the minimum percentage of the total of all my RRIF GICs regardless of when the underlying GIC's mature.

This is INCORRECT !! RIFF withdrawals ignore the GIC maturity date !

With a RIFF containing a GIC, you are required to withdraw the minimum amount (based on your age) each year that can be payable yearly or monthly.

IN ADDITION, you can withdraw any amount from a RIFF GIC , at anytime by sending a letter to the financial institution requesting an additional withdrawal amount ( minus a withholding tax in excess of the minimum amount.)
Withholding tax is 10% up to $5K , 20% from $5001 to $15K, 30% above $15K.

Therefore, you only need ONE RIFF GIC account. i.e. no need for multiples
( I think Motive staff are confusing your request with a RRSP. )

May 11, 2023
6:05 pm
NCC1701Z
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Wayno said

Talked to Motive today and they told me I cannot withdraw more than the minimum percentage of the total of all my RRIF GICs regardless of when the underlying GIC's mature.

This is INCORRECT !! RIFF withdrawals ignore the GIC maturity date !

IN ADDITION, you can withdraw any amount from a RIFF GIC , at anytime by sending a letter to the financial institution requesting an additional withdrawal amount ( minus a withholding tax in excess of the minimum amount.)
Withholding tax is 10% up to $5K , 20% from $5001 to $15K, 30% above $15K.

Therefore, you only need ONE RIFF GIC account. i.e. no need for multiples
( I think Motive staff are confusing your request with a RRSP. )  

I've talked them twice about this and they say no withdrawals other than the minimum % for our age on the total of all GIC's. I never heard of this letter you mention. Is it a legal requirement they are neglecting to tell me? Source?

May 11, 2023
7:44 pm
Pewter
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No, not normal.
You can begin to cash in RRSP or RRIF when ever you like. Plan well, as it’s all taxable. When you get to the mandatory RRIF age, even if there is no tax withhold on the mandatory amount....it is still taxable.

Being retired with a constant income might be the best time to start taking extra RRIF or RRSP. If you are not at the age of mandatory withdrawals, taking RRSP money can help reduce your mandatory amounts, and that helps reduce your income.

Banks have different rules. But none, that I use, have a rule of not being able to take more than the mandatory amount.

FI’s have people working that are totally inept when it comes to RRIFS. Some just “think” you should not take more and assume you are not making a wise decision. It’s your money...so do what you want with it. So you may have to be in the drivers seat and demand to speak to a manager. Best to do by email and get it in writing.

Planning GIC amounts for the “over amount” to mature every year helps. An FI should have a RRIF or RRSP savings Account to better assist you.

Accelerate had a policy of giving, I think, your mandatory amount from a GIC Plus 20% more. Keep in mind that the more amount up to $5000 will have a tax withhold of 10%. Over $5000 is a higher tax with hold %. Accelerate has RRIF and RRSP savings accounts. But check out their service fees.

Multiple “over amounts” at same or another FI, $5000 or less will only have a tax withhold of 10%.

Like I say find out the rules of what GIC they pick on.

Ie Hubert takes the lowest %.
So this year I had money in RRIF savings. And I had GICs at a much lower rate. I spoke with them and they would take it from wherever I asked. So I took from the lowest % GIC vs the cash in savings. I then asked for an over amount to close that low % down. Might as well!! They did that for me.

Oaken has different rules an with no RRIF or RRSP savings account there is not enough flexibility to play with. But you can take more. This year I had a $2000 GIC mature, so I took it all. They made it clear that it would not be part of the mandatory amount.

Oaken CSR’s are hopeless to speak to about RRIFs. We have made 3 calls to tell how much interest and interest was taken from a GIC to cover the mandatory amount over the past 2 weeks. 2 promises to call us back with the answer. This is the third time for us and only 3 times we have been promised a call back.....never happens. Black eye for Oaken.

Some old rules.
Don’t put all of your eggs in one basket.
Don’t be loyal to an FI...just for the sake of being loyal.
Use each FI for what the are good for....for you.
If flexibility with Motive is not to your liking.....move your RRSPs or RRIFs out.

Any questions?

May 11, 2023
9:32 pm
NCC1701Z
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This is what I got in writing from Motive :

"You are able to take more than the minimum required payment, however if you choose this option, your funds can only be held in a RRIF savings account. RRIF GIC’s are not available if you take more than the minimum required payment."

There was no mention of exceeding the minimum % of my total RRIF GIC holdings. I've never heard of such a rule. I was ready to transfer in and set up 10 1-10 year GIC terms then they told me about this silly rule.

Motive's is about the only FI that offers 6-10 year terms and their rates are ~.5% higher than others so I'd like to take advantage of them

Withholding tax is not an issue for us.

May 11, 2023
10:01 pm
Pewter
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NCC1701Z said
This is what I got in writing from Motive :

"You are able to take more than the minimum required payment, however if you choose this option, your funds can only be held in a RRIF savings account. RRIF GIC’s are not available if you take more than the minimum required payment."

Ok makes sense, I think. If you want “extra” they will give it to you from a RIF savings account only, but not from a GIC. But the mandatory amount can come from a GIC. Every one has different rules to where the funds come from...mandatory vs extra. So you have to manage what you want to achieve within the guidelines of their rules.

There was no mention of exceeding the minimum % of my total RRIF GIC holdings. I've never heard of such a rule. I was ready to transfer in and set up 10 1-10 year GIC terms then they told me about this silly rule.


Hmmmm. I would not go beyond 5 years. And do a 5 year ladder. That will help with availability of extra funds every year as long as you don’t allow auto renew and set up every GIC at maturity to go into your RRIF savings and then reinvest what you don’t need for another 5 years. Usually 6 years and on are less % than a 5 year. I believe that CDIC now covers up to 10 year GICs,,,,but if not....don’t buy a GIC that is not covered by CDIC. And don’t exceed principle plus interest to be over $1000,000

Motive's is about the only FI that offers 6-10 year terms and their rates are ~.5% higher than others so I'd like to take advantage of them

Oops I was wrong.....but for .5, I would not bother. Keep to a 5 year ladder.

Withholding tax is not an issue for us.  

Yes, I thought so. You have to pay...and I manage my withdrawals to not exceed the tax bracket that I am in.

May 12, 2023
7:24 am
COIN
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Maybe the Motive agent is confusing a RRIF with a Lif where is there is both a floor and a ceiling?

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