Personal Finance

TD and minimum RRIF withdrawal

  • Last Updated:
  • Mar 8th, 2021 11:29 am
[OP]
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Jan 21, 2018
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TD and minimum RRIF withdrawal

My mom is complaining that she went online to TD today to do her annual minimum RRIF withdrawal, taking into account the 25% COVID reduction that the CRA is offering, only to find that TD already did it 3 days ago without the 25% reduction. She has always done the RRIF withdrawal herself, never asked TD to do it automatically. She called TD and waited a long time to talk to an agent, who told her that they've had a lot of complaints about that, but they're too busy to deal with it right now, and in any case nothing can be done. Angry Face
17 replies
Deal Fanatic
Aug 5, 2006
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Global Village
When you have a RRIF if you don't specify when you want the bank to withdraw the minimum amount each year they will do it automatically, they have to based on how the program works. Your mom can specify to them which day/month she wants that amount withdrawn each year starting next year.
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[OP]
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Jan 21, 2018
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scoper wrote: When you have a RRIF if you don't specify when you want the bank to withdraw the minimum amount each year they will do it automatically, they have to based on how the program works. Your mom can specify to them which day/month she wants that amount withdrawn each year starting next year.
You are making 3 unwarranted assumptions:

1. That it was possible to get through to TD on the phone

2. That your request would get to the right place

3. That they would not ignore it and do whatever the heck they want.
Deal Fanatic
Jul 1, 2007
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The absolute deadline for RRIF payments to be made is Dec 31st, but many institutions want to get these out of the way before the holidays. If someone didn't manually process their annual RRIF payment before Dec 15th, it's entirely reasonable for the bank to process it for them.

The 25% reduction was an election she had to make at some point in the year, but best well before the RRIF payment deadline. Overall bad planning on her part.
Money Smarts Blog wrote: I agree with the previous posters, especially Thalo. {And} Thalo's advice is spot on.
[OP]
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Thalo wrote: The absolute deadline for RRIF payments to be made is Dec 31st, but many institutions want to get these out of the way before the holidays.
Why? It's her responsibility to make the minimum withdrawal by the end of calendar year (i.e., Dec 31, not Dec 15), not the bank's. They should have no authority to act on her behalf. That's the way it has always worked in previous years. What the institution would prefer has nothing to do with it.

Expecting people to just know that there is an unstated informal deadline in advance of the stated due date for making an election for a special COVID-related policy is silly.
Deal Addict
Mar 3, 2018
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If she is under age 71 and still has any RRSP contribution room left she can contribute the RRIF excess amount she received to a new RRSP. Then immediately transfer it to her RRIF. Puts her back in the same position she wanted with an offsetting RRSP deduction.
Last edited by DaveTheDude on Dec 18th, 2020 11:01 pm, edited 1 time in total.
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Jul 29, 2013
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You have to request the 25% reduced RRIF, it will not be automatic.

My account at Alterna Savings paid out 100% RRIF to my BMO account on the annual December 3rd date I requested. On December 4th phoned to see if it could be altered. They said, yes if the money had stayed within Alterna.

PHN RRIF sent me a letter earlier in the year asking if I wanted the reduction. I always get caring personal service from them.

BMO Investor line RRIF, I called to ask for the reduction which they did. I always feel like an outlier. They are efficient but cold.
Last edited by profile on Dec 19th, 2020 6:47 pm, edited 1 time in total.
[OP]
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Jan 21, 2018
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profile wrote: You have to request the 25% reduced RRIF, it will not be automatic.
I think everyone anticipated that, but TD didn't bother asking their clients what they wanted to do. It's just typical of TD: terrible customer communications. This isn't the first time this year. My mom has used TDDI for 20 years, but this year has been a nightmare of screwups and poor communications. I've told her she should move her money out of there, and I think this time she will.
Deal Fanatic
Apr 5, 2016
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I’m pretty sure all banks have a mandatory date set to withdraw minimum RIF payments. I know for a fact BMO does too and RIF goes out December 15th.
Deal Fanatic
Jul 1, 2007
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Scote64 wrote: Why? It's her responsibility to make the minimum withdrawal by the end of calendar year (i.e., Dec 31, not Dec 15), not the bank's. They should have no authority to act on her behalf. That's the way it has always worked in previous years. What the institution would prefer has nothing to do with it.

Expecting people to just know that there is an unstated informal deadline in advance of the stated due date for making an election for a special COVID-related policy is silly.
The minimum has to go out of there. Doesn't matter to the bank if it's done on the 15th automatically or if she does it manually later in the month. Bottom line is that the 25% reduction had to be elected much earlier.
Money Smarts Blog wrote: I agree with the previous posters, especially Thalo. {And} Thalo's advice is spot on.
Newbie
Aug 12, 2010
5 posts
2 upvotes
On a related subject, last year my parents requested their TD SDRIF withdrawal be increased above the minimum, and that the higher rate be continued this year. This year the monthly withdrawals went back to the minimum. My parents waited for several hours on hold to talk to TD to get it changed. They were told Ok, then a few days later the rep called them back to tell them that the withdrawals can't be changed after January, so they can't increase the withdrawal amount until next year. Can TD really keep them from their money like that? Should they be looking at transferring to another institution to have access to their money?
[OP]
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Jan 21, 2018
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bs wrote: On a related subject, last year my parents requested their TD SDRIF withdrawal be increased above the minimum, and that the higher rate be continued this year. This year the monthly withdrawals went back to the minimum. My parents waited for several hours on hold to talk to TD to get it changed. They were told Ok, then a few days later the rep called them back to tell them that the withdrawals can't be changed after January, so they can't increase the withdrawal amount until next year. Can TD really keep them from their money like that? Should they be looking at transferring to another institution to have access to their money?
Can't you do a manual withdrawal any time you want? Or is the issue that your parents wanted it to be an automatic monthly withdrawal?
Newbie
Aug 12, 2010
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Scote64 wrote: Can't you do a manual withdrawal any time you want? Or is the issue that your parents wanted it to be an automatic monthly withdrawal?
They'd wanted to increase their monthly amount since it's what they live off of, but I'll check if they can just manually withdraw each month (not ideal though since that makes it more tempting to dip in more).
Member
Oct 28, 2007
248 posts
57 upvotes
Belleville, ON
I'll be following this thread, as I am considering opening a TD SDRIF in a year or two by moving my TD SDRRSP holdings over, in kind. There's very little info available on their website on the ins and outs of how their SDRIF works and if I make an appointment for a in branch meeting, they may not have a knowledgeable TD SD advisor on hand (somewhat supported by comments above on their phone support).
the rep called them back to tell them that the withdrawals can't be changed after January
- That sounds lame. I didn't have that issue when I wanted my monthly RRIF amounts changed at Sun Life.
Deal Addict
Aug 27, 2009
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While in the RIF account summary page there's a tab "RRIF Payments" which shows:

Next Withdrawal
Amount
Frequency
Destination

... as well as other info.

Have a look at that. Our RIF is annual w/d so not sure what it would show for monthly w/d's.
Deal Guru
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Mar 12, 2005
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Victoria
I'm pretty sure you can change the automatic RIF payment part way through the year. I feel like you got someone one green (new). I'd call back and see what another person says. The good news is it sounds like they might of found a way to hire people mid pandemic while working from home?

In regards the original thread. Like everyone else said. The 25% was voluntary. It had to be requested. I'm pretty sure that was the same across the board. It's also pretty common across the board to to have a day the RIF payment automatically goes out (as this needs to be in place in case there are no instructions provided by the client). It's also quite common for this to be Dec 15th. Like most things in life, if you wait until the last second, things go wrong. Logistically Financial Institutions probably go with 2 weeks early, so they don't have any issues processing them all on the dec 31st (or have time to fix something, if something goes wrong).

Moral of the story. Never wait until the last minute to do things (and yah, waiting to do it the last 2 weeks of a year, when there's 50 other weeks to do it, is last minute).
[OP]
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Jan 21, 2018
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zod wrote: In regards the original thread. Like everyone else said. The 25% was voluntary. It had to be requested. I'm pretty sure that was the same across the board. It's also pretty common across the board to to have a day the RIF payment automatically goes out (as this needs to be in place in case there are no instructions provided by the client). It's also quite common for this to be Dec 15th. Like most things in life, if you wait until the last second, things go wrong. Logistically Financial Institutions probably go with 2 weeks early, so they don't have any issues processing them all on the dec 31st (or have time to fix something, if something goes wrong).
So your point is that banks should take automatic action on your behalf for everything the government requires you to do instead of leaving it up to you? Like paying taxes on interest received?

Or maybe your point is that electronic banking systems need at least 2 weeks to complete every action?

Or that there's no penalty to the RRIF holder to withdraw tax sheltered investments earlier than required?
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Mar 12, 2005
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Scote64 wrote: So your point is that banks should take automatic action on your behalf for everything the government requires you to do instead of leaving it up to you? Like paying taxes on interest received?

Or maybe your point is that electronic banking systems need at least 2 weeks to complete every action?

Or that there's no penalty to the RRIF holder to withdraw tax sheltered investments earlier than required?
The banks are required by law to take action for you. This is the problem. By law you have to take out the RIF payment by December 31st. You wouldn't believe how many people don't, ergo a default system has to be in place to make sure the payments go out.

In life things tend to go sideways. Using Dec. 31st as the default day leaves for no margin of error. No system glitches, no fixing a RIF withdraw gone wrong for a client, etc.... I think the 2 weeks buffer is fair, but again this is because of the large swath of people who don't process their transactions manually.

Over a 20 or 25 year span for retirement, I'm going to imagine that sometimes the markets go up in the span, and sometimes they go down. It's probably a wash over the long term in the tax impact.

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