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  • May 28th, 2019 4:38 pm
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[OP]
Member
Nov 9, 2015
369 posts
36 upvotes
ON

RESP/RRSP

Hi guys,
Can any experts share your suggestions where to invest:
I have $15000 CAD sitting in my RRSP account & $6000 CAD in my kids RESP account for almost 6 months now, I have not started invested yet.
FYI: I'm 32 year's old, earning around $105K. My wife works only part time, so earns around $30K. We have three kids , age ranges from 5.5yrs, 3.5yrs and 5 month old.
I cannot handle much risk but can handle to some extent (moderate). I have these accounts with TD water house ! Kindly advice......
TIA.
Be positive & stay blessed :)
12 replies
Jr. Member
Dec 15, 2005
132 posts
25 upvotes
Toronto
Well first of all I am hoping that your RESP is NOT in Group RESP (nightmare) but in either Individual (for each child) or preferably Family RESP (easily transferable to each child for tuition). With RESP go with 12 year window for investments (70/30, 60/40,50/50 splits in terms of equity/income), counting that your eldest might go to college/university at age 18/19.

As for your RRSP you have a window up to your dedicated retirement age, some do it for 55, most go for 65. But you will eventually have to take money out at age 71 once it turns into a RRIF.

It all comes down how much money you allocate monthly to RESP/RRSP, you should look into TFSA options if you have room or finances to contribute.

Think of it this way RESP has at least a 12 year window to invest; your RRSP until 65 year, which gives it a 32 year (plus months) window to invest. It should be mediocre equity/income concentrated for a long time. As for your TFSA, treat it as your short term investment to preserve capital if you need it for emergency expenses.

Some will say if not most here: go with ETFs. I personally say tread it with caution; to me they are considered high risk against preservation of capital.
Newbie
May 25, 2019
29 posts
8 upvotes
For your RESP, it seems like you are not contributing fully to take advantage of the government grant. If you contribute $2500 per kid annualy, the government will give a $500 grant annually. Suggest you look into since that one of the benefits of RESP.

I have two kids, and I invest my RESP into TD series fund. Well, actually my wife has the other RESP in a mutual fund with 3% MER in which I am planning to transfer it out.

I don't have any RRSP but I have a TFSA portfolio. My portfolio can be found here.

Cheers.

NJ
Neighbour Joe
FIRE Blogger
Slowly But Wealthy
[OP]
Member
Nov 9, 2015
369 posts
36 upvotes
ON
POLTROJAN wrote: Well first of all I am hoping that your RESP is NOT in Group RESP (nightmare) but in either Individual (for each child) or preferably Family RESP (easily transferable to each child for tuition). With RESP go with 12 year window for investments (70/30, 60/40,50/50 splits in terms of equity/income), counting that your eldest might go to college/university at age 18/19.

As for your RRSP you have a window up to your dedicated retirement age, some do it for 55, most go for 65. But you will eventually have to take money out at age 71 once it turns into a RRIF.

It all comes down how much money you allocate monthly to RESP/RRSP, you should look into TFSA options if you have room or finances to contribute.


Think of it this way RESP has at least a 12 year window to invest; your RRSP until 65 year, which gives it a 32 year (plus months) window to invest. It should be mediocre equity/income concentrated for a long time. As for your TFSA, treat it as your short term investment to preserve capital if you need it for emergency expenses.

Some will say if not most here: go with ETFs. I personally say tread it with caution; to me they are considered high risk against preservation of capital.
Thanks for your information. Yes, I do have family RESP for my kids, I just started last year only. Its not very clear, so what should i tell TD agent, I need to contribute to mediocre equity/income ? Is it a mutual fund or stock , sorry I'm very new to investments !
Be positive & stay blessed :)
Jr. Member
Dec 15, 2005
132 posts
25 upvotes
Toronto
sh8wh4sg wrote: Thanks for your information. Yes, I do have family RESP for my kids, I just started last year only. Its not very clear, so what should i tell TD agent, I need to contribute to mediocre equity/income ? Is it a mutual fund or stock , sorry I'm very new to investments !
Mutual funds are assessed by risk factor of the client. There is income/balanced/equity portfolio in mutual funds; they are categorized based on risk/time.
So if someone like you has a window of 32 years to invest into RRSP but with mediocre risk would put themselves into balanced portfolio, which are usually 50/50 or 60/40 split (equity/income). There are portfolios that are automatically reallocated based on time frame; so if you're 32 and wanting to retire at 65. That would be a "2050" portfolio, what they do is put most of the money into equity and slowly every 5-10 years they allocated small percentage from equity to income to preserve the capital that you put in and secure the investments for your retirement. It all depends on the portfolio. Now what I wrote is based on mutual funds where equity portfolio can be between 1-3% MERs depends on where money is invested; Canadian, global or international equities.

With ETF, you call the shots and timing on buy and sell. ETFs are passive portfolios which means little or to no research is done and usually bought on presumption that it will benefit you in short term or long term. I call it more like gambling, you come out high or lose almost all. Mutual funds are active portfolios with a team being managed to do actual research into the purchases they do, either top-to-down or down-to-up; depending on portfolio. Mutual funds is more diversified, with security at a higher MER cost, because the manager and team need to eat and live too.

However there are options to buy Mutual Funds at low MER with different classes; however when you do that, it basically waves you from seeking advise or consultant option on the funds. There is a front load and low load; I personally do a low-load 2-3 year option for the clients. Why?

1. I get paid commission on trade value of your money from the company with conditions.
2. It is my obligation to provide services and 'know your client' at least once every two years; banks haven't done that except electronically 'i agree'.
3. With a single adviser I help anyone build their portfolio but also understand their financial situation and actually consult them with options regarding finances and investments.

Hope extra information helps.
Jr. Member
Dec 15, 2005
132 posts
25 upvotes
Toronto
Oh one extra thing about TD's RESP; if you qualify for RESP Bonds. They wont accept it unless you open another RESP account and put money into Bonds/GIC portfolio. Don't ask me why, but its their own stupid policy. I know cause I had to help a client transfer their RESP to another financial institution.
Newbie
May 25, 2019
29 posts
8 upvotes
sh8wh4sg wrote: Thanks for your information. Yes, I do have family RESP for my kids, I just started last year only. Its not very clear, so what should i tell TD agent, I need to contribute to mediocre equity/income ? Is it a mutual fund or stock , sorry I'm very new to investments !
https://www.td.com/ca/en/personal-banki ... ies-funds/

Do you already have direct investing account with TD warehouse? If so you can search symbol TDB900 for their e series index fund.

You can also invest into e series using a TD mutual fund account but you'll have to tell the TD agent to set it up for e series. When people say equity/income mixture they talking how much to put into stock and how much into bonds. You can use e series fund to achieve your desire mixture.

TDB900 is Canadian Equity Index which is equity. Then i think TDB901 is Candian Bond Index. So if you want 80/20 mixture then put 80% into the equity index and the remaining 20% into bond. You can send me a PM and i can try to explain it to you further, since i am not sure of what i wrote was all that clear.

NJ
Slowly But Wealthy
Neighbour Joe
FIRE Blogger
Slowly But Wealthy
Jr. Member
Dec 15, 2005
132 posts
25 upvotes
Toronto
NeighbourJoe wrote: https://www.td.com/ca/en/personal-banki ... ies-funds/

Do you already have direct investing account with TD warehouse? If so you can search symbol TDB900 for their e series index fund.

You can also invest into e series using a TD mutual fund account but you'll have to tell the TD agent to set it up for e series. When people say equity/income mixture they talking how much to put into stock and how much into bonds. You can use e series fund to achieve your desire mixture.

TDB900 is Canadian Equity Index which is equity. Then i think TDB901 is Candian Bond Index. So if you want 80/20 mixture then put 80% into the equity index and the remaining 20% into bond. You can send me a PM and i can try to explain it to you further, since i am not sure of what i wrote was all that clear.

NJ
Slowly But Wealthy
Should be TDB909 for TD Canadian Bond Index -e
That's almost 100% investment in Canada only; which doesn't tap 3% of world's market.
Last edited by guest656788 on May 28th, 2019 4:24 pm, edited 1 time in total.
Member
Mar 12, 2013
287 posts
116 upvotes
Edmonton
POLTROJAN wrote: Well first of all I am hoping that your RESP is NOT in Group RESP (nightmare) but in either Individual (for each child) or preferably Family RESP (easily transferable to each child for tuition). With RESP go with 12 year window for investments (70/30, 60/40,50/50 splits in terms of equity/income), counting that your eldest might go to college/university at age 18/19.

As for your RRSP you have a window up to your dedicated retirement age, some do it for 55, most go for 65. But you will eventually have to take money out at age 71 once it turns into a RRIF.

It all comes down how much money you allocate monthly to RESP/RRSP, you should look into TFSA options if you have room or finances to contribute.

Think of it this way RESP has at least a 12 year window to invest; your RRSP until 65 year, which gives it a 32 year (plus months) window to invest. It should be mediocre equity/income concentrated for a long time. As for your TFSA, treat it as your short term investment to preserve capital if you need it for emergency expenses.

Some will say if not most here: go with ETFs. I personally say tread it with caution; to me they are considered high risk against preservation of capital.
can you please share more info why the group resp is a nightmare... I enrolled for resp at TD. Does it still be a group plan?

2. Is it possible to change from group resp to individual resp now.??
Last edited by glenn9090 on May 28th, 2019 5:07 pm, edited 1 time in total.
Newbie
May 25, 2019
29 posts
8 upvotes
POLTROJAN wrote: Should be TDB909 for TD Canadian Bond Index -e
That's almost 100% investment in Canada only; which doesn't tap 3% of world's market.
Thanks, yea didn't want to overwhelm OP with too much yet since he said he was new to investing. But i think once he get a little more comfortable he can start looking into other market.

Cheers

NJ
Neighbour Joe
FIRE Blogger
Slowly But Wealthy
Jr. Member
Dec 15, 2005
132 posts
25 upvotes
Toronto
glenn9090 wrote: can you please share more info why the group resp is a nightmare...

2. Is it possible to change from group resp to individual resp now.??
I would double read your contract; how far are you into this Group RESP? There are too many reasons why Group RESP doesn't benefit you or your child but the institution or trust fund organizations. In my opinion should be outlawed.

1. You are paying for fees upfront and commission out of your own pocket to the agent and organization to cover administration costs and what other nots.
2. If you can't keep up payments, penalty is incurred against you. This in my opinion is wrong on so many levels; financial life situations happens year by year.
3. If your child doesn't go to school; you may lose all the funds. With Family/Individual, you can obtain money back at 20% tax penalty, donate it to charity for tax credit or put it into your own RRSP. With Group RESP. you can kiss it all goodbye.

You got to figure out if paying the penalty or biting the bullet in long run pays off for pull out that contract. If you are unsure, send me a pm and see if I can help you.
[OP]
Member
Nov 9, 2015
369 posts
36 upvotes
ON
POLTROJAN wrote: Oh one extra thing about TD's RESP; if you qualify for RESP Bonds. They wont accept it unless you open another RESP account and put money into Bonds/GIC portfolio. Don't ask me why, but its their own stupid policy. I know cause I had to help a client transfer their RESP to another financial institution.
I had to open another one with TD as well for the bond ! You are right ;)
Be positive & stay blessed :)

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