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Hubert's Rates Going Down Again
November 6, 2019
2:32 pm
Loonie
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I have started moving out my registered funds from Oaken, and will continue to do so as they mature until such time as Oaken offers registered SAs.

In order for me to put up with their shenanigans on this matter, they would have to offer me at least 50 bps more than any other FI which I can access, maybe more. So far I've not been tempted.

. When you get to the mandatory RIF stage, as I am, it's not just a matter of having a place to hold the funds until you decide whether/where to move them. It's about having the necessary flexibility to decide, near the end of the year, how much you wish to withdraw, above the mandatory, for tax purposes. This is essential in managing tax bracket, clawbacks etc. They have so far refused to hear this concern, so the money is gradually leaving. They seem to think they are the only game in town. Not. And the credit unions offer unlimited insurance on RSP/RIFs in at least MB and ON, which Oaken can't match.

November 6, 2019
3:36 pm
GICinvestor
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When you get to the mandatory RIF stage, as I am, it's not just a matter of having a place to hold the funds until you decide whether/where to move them. It's about having the necessary flexibility to decide, near the end of the year, how much you wish to withdraw, above the mandatory, for tax purposes. This is essential in managing tax bracket, clawbacks etc. They have so far refused to hear this concern, so the money is gradually leaving. They seem to think they are the only game in town. Not. And the credit unions offer unlimited insurance on RSP/RIFs in at least MB and ON, which Oaken can't match.

I hear you! I am very very close to mandatory RRIF withdrawals. It seems that no FI does same thing to pay it out. Some give the interest only from GICs and make a dent in another GIC if needed and some will take from Savings Account first. I don’t like any one taking a dent out of my GIC!!! I would rather manage the mandatory RRIF withdrawal to be in my RRIF savings account in advance at Oaken or any other FI.

I have no need for my RRSP or RRIF funds yet. I have been pulling money out of my RRSP=>RRIF in multiple amounts of less than $5000 to fuel my TFSAs.

So what I see will happen when we are of age, we will take the forced amount from Oaken for our TFSAs. And then the balance from Hubert (after the forced amount from Hubert, most likely in savings account), the place that does not have a 1 year RRIF GIC!!!! Will have to use Hubert’s savings account to hold the needed RRIF funds in lieu of 1 year GIC.

November 6, 2019
7:57 pm
Loonie
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Yes, it's a bit of a merry-go-round, and I don't think you can "win" unless you have it all in a brokerage account and give them instructions.
It becomes more and more obvious that RIFs, and thus RSPs, may not be such a great deal after all.

Additional problems you may encounter: some FIs don't offer RIFs but do offer RSPs; some, even though they offer RIFs, don't have the capacity to convert a GIC from RSP to RIF; some (Tang) insist that THEY are in charge of when, during the year, your RSP will be converted; some give lower rates for RIF GICs than for other kinds; some take an eternity to convert your RSP to RIF, but some do it immediately; some charge a fee just to close the thing down. To be on the safe side, don't leave it until the last quarter of the year in question.You may discover additional quirks. I will be so glad when I'm done with these stupid things - if I manage to outlive them!

November 7, 2019
5:47 am
Briguy
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Loonie said
Yes, it's a bit of a merry-go-round, and I don't think you can "win" unless you have it all in a brokerage account and give them instructions.
It becomes more and more obvious that RIFs, and thus RSPs, may not be such a great deal after all.

Additional problems you may encounter: some FIs don't offer RIFs but do offer RSPs; some, even though they offer RIFs, don't have the capacity to convert a GIC from RSP to RIF; some (Tang) insist that THEY are in charge of when, during the year, your RSP will be converted; some give lower rates for RIF GICs than for other kinds; some take an eternity to convert your RSP to RIF, but some do it immediately; some charge a fee just to close the thing down. To be on the safe side, don't leave it until the last quarter of the year in question.You may discover additional quirks. I will be so glad when I'm done with these stupid things - if I manage to outlive them!  

Sounds like it's a lot of work figuring out RRIF strategies to lower your tax burden. Can you share which FIs have been best to work with for your RRIFs? Or possibly even a best to worst ? I always value your insights.

November 7, 2019
9:06 am
GICinvestor
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I guess this question is for Loonie.

I am not in the mandatory RRIF withdrawal mode.

I do control moving RRSP to RRIF to non registered cash. And with Hubert I have full control to do it all online myself. They only help that I need is you have to request what amount you want moved from RRSP to go to RRIF.

November 7, 2019
4:44 pm
Loonie
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Briguy, I wish I had a good answer for you but I am still learning and in process, moving things around and looking for the best arrangement. My ideal would be to find an Ontario CU where we could dump all our RIF GICs, as they have unlimited insurance and it's local. However, as you know, there is a problem getting consistently good rates in that sector, so you must compromise in some way: rates, service, fees, competence etc. Hubert has perhaps been the most accommodating overal, but there is the problem of lack of one year RIFs and the fact that it's out of province - as you know. It boils down to which nuisance factors bother you the most - or scare you the most. Motus scares me the most.
Spouse has not quite reached mandatory withdrawal stage. I have whittled mine down substantially on purpose so only have 2 GICs left now. One is still at Oaken and the other went to Meridian after motus failed me so miserably. I've moved others around and closed all the others but didn't find any FI exemplary. You just have to watch them all carefully. All of them have done something to offend me!
I find that many staff are inexplicably unversed in RIFs. Sometimes it seems as if they've never seen one before - and maybe they haven't!
Accordingly, these are the things I would advise you to especially watch for:
1. Each time you convert to an RIF, you will need to fill out new beneficiary info. They won't necessarily tell you this or be aware of it. Don't transfer any money until the RIF account is open and you have done a beneficiary for it AND they have said they have received it - especially important with online Fis. (Hubert claimed never to have received my beneficiary form, for example - when I asked.)
2. Be aware, before you make the conversion arrangement, of which of you (you or your spouse) is going to be the person whose age counts as basis for mandatory withdrawals. Normally, one would choose the younger spouse. They won't likely ask you this, and you have to ensure that they get it right.
3. Review carefully all conversion documents prepared on your behalf by them before signing. There is a reasonable chance you will find errors. I have fond more errors in these kinds of docs than any other bank docs.
4. When transferring an RIF from one FI to another, watch the date for the first mandatory withdrawal on the new FI's documents. By law, the relinquishing FI must withdraw the mandatory amount before forwarding to new FI, and this will be done, but staff at new FI don't always understand this and attempt to set it up to withdraw it again in same year. This appears to reflect a discrepancy between "sales" function and back room or investment side.
5. If it's important to you, ask a lot of details about what will be withdrawn, how calculated, and when. (You get to decide when.)
Mandatory withdrawal amount is based on balance 31 Dec previous year. Does this mean what has been paid out in interest by then or what is accumulating towards next interest payment? I know that Oaken takes the latter view but am not sure about others.
If you make more than one voluntary withdrawal, how will they calculate the amount to be sent to CRA on your behalf? Some assume you intended just one and then added another ( in which case each one is assessed at its own value) and some will assume you intended to do more than one withdrawal and will assess the second one accordingly (higher). May depend too on how far apart they are in time.
This is what I know so far! In 3 years, I expect to be an expert!sf-laugh

P.S. You probably already know this, but be aware that only RIF withdrawals count for pension splitting and for the pension tax credit. RSP withdrawals don't count. So sometimes one needs to open an RIF account specifically for this purpose earlier than one might have expected to do so, creating an unwanted proliferation of accounts.

November 7, 2019
4:50 pm
Loonie
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GICInvestor: I am not sure what your question is. If you rephrase, I will try to answer.

November 7, 2019
4:53 pm
Loonie
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Some of the above should probably be moved to a separate thread.

November 7, 2019
5:25 pm
GICinvestor
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Loonie said
GICInvestor: I am not sure what your question is. If you rephrase, I will try to answer.  

I was referring to Briguys question as underlined.

Sounds like it's a lot of work figuring out RRIF strategies to lower your tax burden. Can you share which FIs have been best to work with for your RRIFs? Or possibly even a best to worst ? I always value your insights.

November 7, 2019
7:33 pm
Briguy
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Thanks Loonie for all your insights !! What you said made perfect sense. eg. even if I keep my entire RRSP at one FI, I'll probably need to start one RRIF up earlier than
71 years of age for pension splitting. I have a feeling that I may need an accountant at that point as my wife is from UK and she will be getting a pension from there and no CPP from here. As you know I keep all my RRSPs at Hubert and Saskatchewan Pension Plan as I like to keep things simple.

November 7, 2019
9:22 pm
Loonie
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You're welcome.

GICInvestor - I don't think there is anything more I can say to advise you.

November 8, 2019
12:00 pm
GICinvestor
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Loonie said
You're welcome.

GICInvestor - I don't think there is anything more I can say to advise you.  

Thanks. I might need some support in a couple of years!
What I am doing now works and RRSP=>RRIF funds are all cash from matured GICs.

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