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Looking for Advice on How To Allocate Employer Group RRSP Funds

  • Last Updated:
  • Feb 6th, 2018 10:55 am
[OP]
Deal Addict
Jul 11, 2008
1904 posts
1460 upvotes

Looking for Advice on How To Allocate Employer Group RRSP Funds

My employer matches my RRSP contributions (up to 4% of gross annual income). I was informed that I can only buy funds through Manulife however which is not ideal due to Manulifes higher MER. Despite this, I think there is little doubt that it still makes sense to go ahead with RRSP contributions to get the company to match up to 4%.

Our group administrator handed me a pamphlet with the IMF% and returns and asked me to decide how I want to allocate the funds. However, I know very little about these funds and was hoping for some feedback from RFD in terms of how I should allocate my investments. I don't believe I have the option of index funds/ETF's through the employers group RRSP plan. I'm curious how I should go about this - the pamphlet does not list MER's, just IMF% and returns. Should I narrow it down to the ones with lower IMF% or is there more to it?

A little about me and investment goals. 30 to 40 years from retirement. We just bought our first home in 2017 and I withdrew the $25k from my RRSP for the home buyers plan so any $$ being invested in RRSP from this point forward will be a long term investment (I only plan to contribute 4% of my annual gross income into RRSP since that is all the employer matches). No other debts other than mortgage (300 k remaining on mortgage, 2.94% 5 yr fixed mortgage so our goal at the moment is to pay off the mortgage as soon as we can). Given the timeline of the investment, I know I should be more aggressive which I'm trying to wrap my brain around - I have to say that the risks (ie market crash) does worry me with an aggressive portfolio (I have generally been more conservative with my savings/investments to this point since over the last few years, I was saving up for my down payment to buy a house so I am trying to change my mindset now especially with RRSP investments). Any feedback is appreciated even if it helps me narrow it down a bit...
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3 replies
Sr. Member
Mar 15, 2011
534 posts
172 upvotes
Toronto
Its 2018, ask for a more recent info. I have manulife too and l can go online and lookup things like MERs.

Also l had a survey about my risk tolerance that then advised me on how to allocate funds.
Sr. Member
Jan 3, 2005
704 posts
107 upvotes
I also have Manulife with my employer matching 4%....maybe we work at the same company.

Anyway, with 25+ years left before retirement you can be aggressive. Manulife has 3 plans all picked out for you and you can just choose one if you wish depending on what kind of risk you'd like to take. If you're feeling a bit uneasy then choose the middle plan with and see how it does for a year, after that maybe you'd want to step it up to aggressive, but I think I would go with that right off the bat. Markets recover over time and with 25+ years you're good. Of course you can also pick your own individual funds if you're fairly good at it and know what you're doing.
Deal Addict
Dec 4, 2016
1910 posts
932 upvotes
Since 4%+4%=8%, and RRSP contribution room is 18% of your gross income, you still have 10% of your income left as contribution room. Looking at the list, most non-index funds are quite expensive. I would choose the Canadian index fund for your portion, and US index fund for your employer portion. These MER's seem to be comparable to TD e-series, so you can leave them at Manulife for a while, until your portfolio grows large enough to warrant buying ETF and doing Norbert's Gambit. Use your self directed RRSP at your bank for balancing, especially the international portion.

I'm of the opinion that mortgage pay down is equivalent to investing in bonds, so go 100% equity while you're still paying down mortgage.

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