Hubert to offer RRSP/RRIF and transfers of US$ | Page 3 | Hubert Financial | Discussion forum

Kanaka, we could transfer our RRSP's to another financial institution that pays 3.00% for 5 years like the ones I did mention in my prior posts today but that will cost transfer fees of at least $56.50 or more per transfer and lost interest for the time to transfer our RRSP's.

Also, we will not get more than 3.00%, either stay at 3.00% for 7 years or go somewhere else for 3.00% for 5 years.

We could use Duca's 2.75% Flex40 cashable term deposit after 6 months at 1.75% and take a chance at seeing higher rates but this will make us lose another 0.25% per year if it is not worth it to cash it in if rates are lower or the not much higher.

Kanaka, it is a $56.50 per RRSP transfer. So there are at least 6 different RRSP GIC's coming due. If you wait to consolidate them all together, it would take years.

Also, Duca's RRSP transfer fee was $25+G.S.T now H.S.T just about 4 or 5 years ago. I could easily see them adding on another $25 to $50+H.S.T again in coming years.

The lost interest is another decent amount when comparing say 3.00% annual interest divided by 365 days and multiplying it per day lost and by our experience most transfers take anywhere from 20 to 30 days.

In our case, our RRSP's are on average between $13,000 to $19,000 so take the middle there, $16,000, it is around $26 to $40 in lost interest each.

Rates are already so low that this is just more money lost that can add to anywhere from $450 to $500 in less money in our pocket.

I am not working anymore as my income is around $14,000-$14,500 a year from C.P.P. disability because of my back injury and now I am almost 56 years old.

I was making at least 3.5 to 3.75 times that even when things were so so and not so busy. I don't want to keep off topic here but with all the financial hits that all of us are taking, I don't see much improvement on the rate side for us.

These fees and other costs is more money gone for good.

Kanaka, we are all considering many different tax saving and possible rate rejigging money around but we are limited so far because of our younger ages on the tax side so far.

We are maxing out all our TFSA's and this is probably the only major thing that 3.00% tax free compounding is like a 4.00% to 4.25% equivalent rate in a non-registered GIC or RRSP, RRIF GIC.

We have used spousal RRSP's as well that will help with future income taxes as well. Good suggestions Kanaka, as this could help others that are nearing 65 next year.

Kanaka, we thought about RRSP withdrawals but since in most provinces like here in Ontario, you can earn at 65 years old, a bout $18,000 a year and pay no income taxes if maybe $100 to $150.

After that until around $37,500 a year, you pay around 21% to 25% depending on your province. We will not be paying much income taxes as modest income individuals.

You point about making early RRSP withdrawals is a valid and good one for those lower income individuals that will have $25,000 a year and less of annual income.

We will be using the annual $2,000 pension income amount each for our RRIF's, income splitting, personal amount, age amount and in my case disability amount to keep our taxes lower.

I calculated that between us, we will pay between around $7,200 a year in annual income taxes on $80,000 of C.P.P, OAS, RRIF income, interest from non-registered accounts, TFSA interest income when we around 67 years old or older.

Our incomes will be much lower until we get OAS and our RRIF income is received after anytime after 65 years old plus our non-registered investments will be larger by then too generating more annual taxable interest income.

This is only about 9% of all our income so 91% is still left for us for other expenses, cost of living etc..

Even as I believe income taxes will at least 20% higher in coming years, this would bring our annual income taxes bill to $8,640 which is still only 10.8% of our total income.

This is if our incomes don't increase or drop. Kanaka, good points and early RRSP withdrawals and saving taxes which can work and be a good idea for lower income and much higher income individuals than us.