#RRSP #Investing #RetirementPlanning
Hey everyone! 💸 So I’m looking to transfer about $600k from my wife and my RRSPs to a self-directed Questrade account. After doing some reading, it seems like the general consensus is to just go for it and invest now, without trying to time the market.
But when it comes to where to invest, it looks like XEQT is the way to go. 📈 Does it really come down to just keeping it that simple?
A bit about us: we’re about 10 years away from retirement and have income from DBP/DCP/other investments. 🏦💼
A couple of things to consider:
– Pension plans might provide around 60% of our target retirement income
– There’s also the possibility of downsizing our GTA home in the future, which could add $500k – $1M to our finances
Got any insights or advice on this? Let’s chat! 🤔💬
Yup. It’s that simple.
Not an expert… Yes, I think keep it simple is the correct approach. With DBP/DCP/Other income, does that cover your expenses and this extra? While XEQT/VEQT is the go to, are you taking on more risk than necessary? Is there a reason to subject yourself to 30-50% swings of value, or would a more balanced approach be worthwhile.
It sounds like you have enough assets and close enough to retirement to pay a for fee certified financial planner for advise/planning. Can’t know what you don’t know, but they might. =)
>My second question of where to invest seems to be …
… a risk appropriate asset allocation ETF. (Which may or may not end in EQT.)
Here is some applicable info on the subject.
https://canadiancouchpotato.com/2010/11/10/ready-willing-and-able-to-take-risk/
https://canadiancouchpotato.com/2014/04/14/ask-the-spud-is-my-pension-like-a-bond/
XEQT (or VEQT, very similar) is 100% equities. It may be too risky for somebody 10 years from retirement. There are other ETFs that have more bonds that may be more appropriate, such as VBAL (60% equities, 40% bonds) or VGRO (80% equities, 20% bonds).
It depends on your risk tolerance and other assets and their allocations. Vanguard has a risk assessment questionnaire that may be helpful to you.
You don’t mention your age but 10 years to retirement plus a possible 30 year retirement = 40 year investment horizon in my opinion. I would feel quite comfortable with XEQT for at least the next 10 years or more. You’ve got DB / DC pensions that will be your guaranteed portion.
Transfer it to me and I’ll transfer it back
With 600k I’d pay a little bit of time and do XIC XUU and VIU
The small saving in fee isn’t a factor when account size is small but could become significant in larger size account. 0.1% of 600k is $600 per year in saving
I wouldn’t worry about when and I would just do it. Your underperforming funds could just as easily drop as XEQT could if the markets took a downward swing. I just transferred about the same from BMO to Wealthsimple and sold most of my individuals stocks and bought XEQT. I figured my individual stocks were also high so selling high for high was no issue.
Loss to foreign withholding tax is non negligible at those amounts. If you want something like VEQT/XEQT you should buy VT and then add some VCN to increase home country bias
You are already in the market with your existing fund. So you sell these and buy XEQT as quickly as possible and hopefully there is no gain/loss.
Just FYI, Wealthsimple has a 1% match on right now which would get you a painless $6k for transferring your RRSP to them.
Hopefully you mean you are transferring into a self-directed RRSP account for each of you. Just double-checking to make sure you aren’t accidentally withdrawing at the highest possible marginal tax rate.
Yes, it’s that simple. Although for peace of mind I would do $450k on $XEQT and $150k in CASH.TO or similar, which I would slowly convert into $XEQT over the next 4-5y. This might not be the optimal return, but you and your wife would likely sleep much better at night knowing that you have cash to take advantage of any crazy sales in the market.