Personal Finance

Advice for catching up on TFSA/RRSP limits

  • Last Updated:
  • May 12th, 2021 11:25 pm
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[OP]
Newbie
May 11, 2021
7 posts

Advice for catching up on TFSA/RRSP limits

So I just moved back to Canada after spending a few years working in the US. I haven't been keeping up with my personal finances and am attempting to catch up now.

I am planning on meeting with a financial advisor soon but thought I'd get started myself and see what advice I can get from the board here as well.

I currently have the following:
Your 2020 RRSP deduction limit: ~$113k
Your 2021 TFSA contribution room: ~$74k

I have a large number of shares from my company vesting over this year and next year (so my taxable income is going to be higher than normal for these next 2 years in particular).

What I need advice on:

1) I was thinking of taking the shares from my upcoming vest and to move them directly into a TFSA account. That should shelter any future growth from taxes and since they are just vesting, there won't be any capital gains to worry about. One caveat here is that it is a US-based company so not sure if there are any implications with moving that into a Canadian TFSA.

Would you recommend the above? If so, any advice on where I should open my TFSA account with? I currently have a TFSA account with about ~1k in it at RBC. Should I look to moving my stocks into that one? Or are there benefits I can take advantage of opening a second TFSA account?

2) I've already enrolled in my company's RRSP plan once i switched over to Canadian payroll so I've been contributing about $600 per month with that being also matched by my company (which probably isn't reflected in the $113k amount). Should I be trying to move more of my savings into my RRSP?

3) I have about $50k in savings that's going to be sitting in a Scotiabank savings account (with a boosted interest rate of about 1.8%). That promotional rate is only until August. Any recommendations where that should go either now or once the promotional rate is over?

I'm not expecting answers to all the questions above. As I mentioned, I will be trying to get an appointment with a Financial advisor at some point soon. Just looking for any advice/guidance this board may be able to provide.

Thanks in advance!
7 replies
Sr. Member
May 5, 2006
797 posts
251 upvotes
Check out www.canadiancouchpotato.com and don't let the advisor sell you any funds with high management fees. You can't go far wrong with any of the CCP portfolios, especially with a relatively modest amount of money. I'd recommend just picking an asset allocation all-in-one fund.

Keeping the vested stock is a risky move that puts many of your eggs in one basket. If your employer goes down, you lose your job and your savings. Better to diversify it out, at least most of it.
[OP]
Newbie
May 11, 2021
7 posts
randomthoughts wrote: Check out www.canadiancouchpotato.com and don't let the advisor sell you any funds with high management fees. You can't go far wrong with any of the CCP portfolios, especially with a relatively modest amount of money. I'd recommend just picking an asset allocation all-in-one fund.

Keeping the vested stock is a risky move that puts many of your eggs in one basket. If your employer goes down, you lose your job and your savings. Better to diversify it out, at least most of it.
Thanks for taking the time to reply!

I'll definitely check out Canadian Couch Potato so thanks for that resource!

I don't think ill be looking for a recurring relationship with the financial advisor. I'm looking more of a one-time service where they can go over all my details and provide a financial plan - how I should be structuring my accounts, how to leverage my RRSP/TFSA properly, any particular things I should be doing with my taxes (getting married this summer so will be filing jointly next year), etc. After getting things on track, I'm more than happy to put in the work and managing things myself. Balancing my portfolio is already something I'm looking into so already on top of that!
Deal Addict
Oct 4, 2009
2780 posts
1666 upvotes
Montreal
RedDragonSlayer wrote: (getting married this summer so will be filing jointly next year)
No such thing in Canada, contrary to the US.
Deal Addict
Mar 3, 2018
2234 posts
2278 upvotes
GTA
In regards to your TFSA room you mentioned you have $74K. Not sure if your are adding TFSA room for years you were in the US. TFSA room does not increase for the years you were non resident.
[OP]
Newbie
May 11, 2021
7 posts
S5 wrote: No such thing in Canada, contrary to the US.
This is why I need to do more research! Face With Tears Of Joy

DaveTheDude wrote: In regards to your TFSA room you mentioned you have $74K. Not sure if your are adding TFSA room for years you were in the US. TFSA room does not increase for the years you were non resident.
I logged into my CRA account and this is the amount it shows so should be accurate. My tax has always been complicated. I have rental property in Canada so I've been filing taxes in Canada even when I was in the US.
Deal Addict
Mar 3, 2018
2234 posts
2278 upvotes
GTA
RedDragonSlayer wrote: I logged into my CRA account and this is the amount it shows so should be accurate. My tax has always been complicated. I have rental property in Canada so I've been filing taxes in Canada even when I was in the US.
I assume CRA did not know you were non resident as you never completed the emigration section in the tax return. Did you file your tax returns for the rental income with CRA's international tax office as required or just file a return by net file as though you were resident. You might get away with it but something to be aware of if CRA finds out.
Deal Addict
Jul 16, 2019
1157 posts
542 upvotes
I am not an expert but I would do the following.
1) Move the vested share into TFSA. As another poster suggested, you might want to gradually diversify instead of keeping shares in your company.
RBC and any major bank has advisors that tend to push their products. Might be better to manage your own thru self directed or thru a independent financial advisor.
2) Maybe move some of the $50K in savings into RRSP gradually so you max your RRSP which already has $1200/month going in plus whatever you put in effectively getting your taxes to zero.

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