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Email this8:33 am
September 11, 2013
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If all you've got in the RRIF account is GICs and you don't want to be all in 1-year terms then I guess some form of laddering is what you'll be doing as you need to make sure enough matures every year so that you can withdraw the minimum/desired amount.
As the minimum withdrawal is based on the value of the account at the beginning of the year how is this value determined in the case of a GIC? Is it just the principal amount of the GIC, or is there some kind of accrued interest calculation needed?
9:12 am
September 24, 2019
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I have GIC RIF's with four different banks, i.e. Oaken (HB),Tangerine, CWB & a very small one with CIBC.
For example in my RIF's with CWB, I currently have 3 GIC's with them. My minimum payment with them is say $4500 and I elected to get that payment on 15 Dec each year. I can change that date if I wish. Anyway, one of the GIC's is maturing in July of this year. They have been taking all the funds out of that GIC every year so in July there will only be about $1500 left. I have asked to have that GIC cashed instead of rolling it over. So I'll get that $1500 in July and it will be taken off my minimum payment in Dec. In December they will take the remainder of $3500 out of the GIC that is maturing in May 2023. That is my choice. I could have rolled the GIC over and the entire minimum would have been taken out of the May 2023 GIC, or I could have also cashed the $1500 and opted to also take the full $4500 minimum out in Dec. And so instead of getting $4500 this year, I could have received $6000.
11:38 am
October 21, 2013
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It all sounds rather complicated. Just remember that any amount over the minimum withdrawal will be subject to withholding tax, so that you don't get a nasty surprise.
11:44 am
October 21, 2013
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Bill said
If all you've got in the RRIF account is GICs and you don't want to be all in 1-year terms then I guess some form of laddering is what you'll be doing as you need to make sure enough matures every year so that you can withdraw the minimum/desired amount.As the minimum withdrawal is based on the value of the account at the beginning of the year how is this value determined in the case of a GIC? Is it just the principal amount of the GIC, or is there some kind of accrued interest calculation needed?
It's based on accrual, i.e. value at year's end. Oaken, in particular, calculates exact value as of end of year and it is based on that.
11:50 am
September 24, 2019
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Loonie said
It all sounds rather ocmplicated. Just remember that any amount over the minimum withdrawal will be subject to withholding tax, so that you don't get a nasty surprise.
Thanks Loonie. Actually, I'll have to pay the withholding tax if I cash it in even though I won't be taking more than the minimum. Doesn't matter to me if I pay a little tax on the $1500 right then in July as I'll just deduct that amount on my quarterly income tax payment in September.
11:52 am
October 21, 2013
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RetirEd said
Would GIC laddering in an RRIF be a way to handle withdrawals? Just have the proper amounts coming due as needed, with a small cushion at annual or bi-annual rollovers as a just-in-case?
RetirEd
If all you have is GICs and none is coming due, they have to figure out a way to get money out of one of them. They are obligated by law to make the mandatory withdrawal. I's not something you are responsible to arrange. It's possible that they wouldn't let you set up a situation where this was necessary.
They can do it if they have to. All FIs that issue RIF GICs do it.
12:16 pm
April 6, 2013
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Bill said
… Just had to make their desires clear and he did it all without hitch, including looking after everything properly and efficiently during estate settlement time, which might be another factor for some folks. Maybe we just got a nice guy, very good experience in our case.
You did get a nice guy. He likely was successful in gathering enough assets under management. The commissions covered the overhead with enough left over to provide him with a reasonable living.
That is in contrast to the person who opened the Edward Jones branch in a nearby strip mall. It was gone after about a year. Drove by a few weeks ago and the space is now a Money Mart. 
5:12 pm
September 11, 2013
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Yes, I never got the impression he was rolling in dough but appeared to be comfortable enough. Based on that experience I might go with EJ once I'm no longer any more capable of or interested in DIY via discount brokers, I don't know what other options are out there aside from big bank full service brokers but I don't really trust them even as much. Seems to me finding the right person is more important than what institution is handling your investments.
10:59 pm
October 21, 2013
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Anyone who can't manage their money or doesn't want to , and who doesn't trust a POA to do it, need to look for someone who has legal fiduciary responsibility to invest the money in the client's best interests. This is vital. Most of the people offering their services are just obligated to invest in something "suitable", which allows far less responsibility and prudence. Those who have fiduciary responsibility generally cost more but can be found in Wealth Management circles, even through banks.
I'd be very surprised if anyone at Edw Jones bears fiduciary responsibility.
One also need to ensure that, if the person you have chosen retires or quits, that there will be another person with the same qualifications and responsibilities to replace them.
The only person I ever knew who worked for them was a very nice guy, son of friends. He knew nothing about finance when he started and not much more when he quit. They get the job because they project pleasing personalities. It is, after all, a sales job.
12:13 pm
September 11, 2013
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Very true, important to know that fiduciary duty is vital for some folks. In my case, like for many people, I will be involving one or more of my children to do as I did for my parents, i.e. do as little or as much as requested, as I lose interest in spending increasingly-precious time on my financial affairs.
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