RIF & LIF minimum withdrawals with TD Direct Investing

Your yearly mandatory withdrawal amount is determined by your portfolio’s market value on December 31st of the previous year. Your scheduled amount may be affected.

The date, frequency, destination and elected amount (if applicable) of your scheduled withdrawals are carried over from the previous year.

hwyc2007 wrote: ↑ Hope this helps

Scote64 wrote: ↑ TD processes the minimum withdrawal automatically on Dec. 15 if you have not done it earlier. They won't notify you that it's coming up, they just do it - it;s up to you to have cash in the account. There was an issue last year that they did not take into account the one-time COVID-related reduction in minimum withdrawal that the fedgov announced during the year.

profile wrote: ↑
Phillips Hagar & North mutual fund company automatically sells a percentage of all held mutual funds to make up the required withdrawal. So easy.

Interest on Debit Balances for Registered Accounts: Interest will be charged on debit balances at TD’s prevailing overdraft interest rate calculated on the daily closing balance of the account and payable monthly.

hwyc2007 wrote: ↑ The scheduled withdraw is pre-programmed so it is possible to go into a negative balance.

I did once briefly and made correction immediately. However, I am not sure (found nothing written at TDDI) if TD will take over & force a sell if one remain inaction. I think it is crucial to open the dialogue with TD in that situation.

Hope this helps again

lmcjipo wrote: ↑ I'm thinking of retiring in a few years and was wondering how TD Direct Investing handles the minimum withdrawals for a RIF and LIF when invested in stocks, mutual funds, and ETFs.

I know that every year, one must withdraw a minimum percentage (based on age) from the accounts but do they tell you these amounts or are we responsible for determining the value of our LIF/RIF portfolios on a specific date and then cash in the amount of securities which would make the minimum withdrawal?

lmcjipo wrote: ↑ Yes, easy but if you didn't want to sell those mutual funds but wanted to sell other mutual funds, it could be a nuisance. I'm not with Phillips Hagar & North for my RRSP but if I wanted my minimum withdrawal (when it gets converted to a RIF) to come out of the investments/mutualfund which is doing very well as opposed to doing poorly or vice versa, having them do it across the board would mean not being able to take the money from the security that I want.

TuxedoBlack wrote: ↑ You are supposed to be responsible to calculate and determine it yourself but it's a very simple and easy calculation which the bank can also confirm.

This is what I plan on doing: I plan on opening up an RRIF when I am 50 and transfer out $200K or so from my RRSP to the RRIF. I'll then start taking out $40K each year for the next 5 years and close down the RRIF. I'll do the same thing again at the age of 55, 60, 65, etc.

I want to know if I can open up a RRIF account before age 55. That's my question.

georvu wrote: ↑ Helped a friend's parents with their RIF few years back with CIBC.

Apparently they miscalculated the min amount to be higher then it should be... don't know how as pretty straight forward calc... so just heads up to check the math.

There was automatic payment for min amount for Nov or Dec of the year but if you do a manual payment then the automatic payment should be cancelled but best to cancel online if possible. Should be similar in TD.

lmcjipo wrote: ↑ I don't know how CIBC does it but I can see people miscalculating if the financial institution doesn't show the balance as of December 31 and they forget to check.

This was one of the reasons why I asked my question since due to a hectic schedule and being absent minded, I might fail to check my balance of my portfolio on December 31 and by the time I check, it might be January 3 or whatever date... and my balance on December 31 might have been $100k and the time that I checked, the balance might be $98k and then I base my calculations on $98k or whatever value.

I've only had my LIRA and RRSP account with TD Direct Investing for less than a year but I believe that most financial/investment firms will supply a statement on December 31 (whether it is annually, quarterly, or bi-annually) so I was worried for nothing.

lmcjipo wrote: ↑ I don't know how CIBC does it but I can see people miscalculating if the financial institution doesn't show the balance as of December 31 and they forget to check.

This was one of the reasons why I asked my question since due to a hectic schedule and being absent minded, I might fail to check my balance of my portfolio on December 31 and by the time I check, it might be January 3 or whatever date... and my balance on December 31 might have been $100k and the time that I checked, the balance might be $98k and then I base my calculations on $98k or whatever value.

I've only had my LIRA and RRSP account with TD Direct Investing for less than a year but I believe that most financial/investment firms will supply a statement on December 31 (whether it is annually, quarterly, or bi-annually) so I was worried for nothing.

lmcjipo wrote: ↑ I've only had my LIRA and RRSP account with TD Direct Investing for less than a year but I believe that most financial/investment firms will supply a statement on December 31 (whether it is annually, quarterly, or bi-annually) so I was worried for nothing.

willowberry wrote: ↑ You can always login to TDDI, and under the RRIF account, you'll see the withdrawal information, and current status i.e. when I login I can see the withdrawal amount for the year, and also how much I've withdrawn so far this year, etc.

leeder wrote: ↑ I'm helping my folks with their RRIF mandatory minimum withdrawal at TDDI. The scheduled withdrawal date is Dec 30, 2021 per the RRIF payment screen. I was originally thinking of helping them rebalance and sell the minimum withdrawal into cash before the scheduled withdrawal date (sell securities to cash around Dec 22 or so). I am wondering if that is enough time or whether I should do so earlier (e.g., Dec 15). Also, does TDDI do an automatic sweep from the TDDI RRIF cash (after I manually sell the securities) to the taxable account?

TuxedoBlack wrote: ↑ I'm also interested in confirming this, but this is what I do know: Your RRIF balance as of December 31 of last year is used to calculate the RRIF factor. At age 55, the factor is 2.8571%. At age 56, it is 2.9412%, and it keeps on increasing each year until it is 4% when you hit 65.

You are supposed to be responsible to calculate and determine it yourself but it's a very simple and easy calculation which the bank can also confirm.

The dollars determined by your balance as of Dec 31 last year and RRIF factor need to be cashed out by Dec 15th and if you don't withdraw the minimum, then TD will put you in a negative cash situation.

Note that TD will NOT sell your stocks/bonds/ETF, but the negative cash means that you'll be paying a lot in interest so you will need to sell some of your funds to cover the negative cash. (Addendum: You cannot add to this RRIF by adding more cash. This is important to know. But you can have multiple RRIFs.)

Ex: You have $100K in RRIF that you added on July 15, 2020. By Dec 31, 2020, the RRIF has grown to $108,000. Meaning, you need to take out a minimum of $3,085.67 by Dec 15, 2021. (Assuming you're 55 years old.)

This is what I plan on doing: I plan on opening up an RRIF when I am 50 and transfer out $200K or so from my RRSP to the RRIF. I'll then start taking out $40K each year for the next 5 years and close down the RRIF. I'll do the same thing again at the age of 55, 60, 65, etc.

I want to know if I can open up a RRIF account before age 55. That's my question.