Planning & Advice

You can switch. Move your RRIF to us, save on fees

November 23, 2017


You can switch. Move your RRIF to us, save on fees

Planning & Advice

You’ve retired. You’re finally ready to loosen the purse strings and start spending the money in your Registered Retirement Income Fund (RRIF) on the things you love. I’m going to go out on a limb and suggest that you don’t want to spend a lot of that hard-earned cash on fees.

With WealthBar, you don’t have to.

But just so we’re on the same page, if you’ve got a RRIF with a traditional financial institution like a bank, that’s exactly what you’re going to do.

At an average 2.2% management fee, you could be paying tens of thousands of dollars for them to manage a dwindling asset. Which is to say, you’re going to have to scale back your big retirement dreams because a non-trivial amount of your hard-earned money is propping up your financial advisor’s car payments.

Or, you could pay 0.6% or less, at WealthBar — and those fees go down, the more you saved. So if you were a diligent, responsible investor and saved a lot, you’re rewarded. Over $350,000, your fee is 0.4%. Over $500,000, the annual fee is 0.35%.

So, I’ve got a blunt question for you before you start spending that retirement nest egg: which sounds better to you: 0.6% (or as low as 0.35%) with WealthBar, or 2.2% from the banks?

The math is simple. Spend less on fees and more on the things (and people) that you love.

The time to move your RRIF in 2017 is running out, fast

If you’re a Canadian retiree over age 70, you have a RRIF, or are about to have one. The RRSP converts to a RRIF when you turn 71.

Unfortunately, there’s actually not much time left to move your RRIF if you need to do it in 2017. But there is still time, if you make your move this month (or in early December).

The cutoff for RRIF transfers is around mid-December. That is, RRIF transfers are generally frozen from then until the end of the year. So if you want to make your move, you’re going to have to do it soon.

Invest online with a dedicated financial advisor.

“But I’ve been with my financial institution since I was 12 years old. Why would I change it now?”

Simple. Companies change, and not always for the better. They update their investment philosophies. They change their service standards, or their pricing.

Well, if your favourite restaurant raised prices while their service declined, you’d take your business elsewhere.

The same principle applies to your the financial firm that helps you invest. The client has the right to choose their investment provider, regardless of the account type.

“But you’re a robo-advisor. Do I get a human advisor?”

Not only do you get a human advisor. You get even better access to your financial expert than you’d get at the bank.

Just like with all of our clients, you’d be getting unlimited financial advice, from some of the most knowledgeable and friendly people around, just for starters.

The truth is that many financial institutions tend to take longtime clients for granted. They might have set up a boiler-plate plan that is workable, but based off your financial situation from years ago. It’s not necessarily optimized to make sure that, for instance, the CRA doesn’t scoop up a big heaping portion your golden retirement nest egg as you melt it down for withdrawals.

Do you feel like you aren’t getting the attention you used to get, as you get close to the shift from accumulating wealth to decumulating it? That’s common. But we’re not like that. You get the attention of a financial advisor who doesn’t try to steer you into certain products because of commissions, who is just working with your best interests at heart.

Throw in lower fees on your money than similar options with a bank, easy access to your investments through a simple online dashboard and you’ve got a winning case for making the move.

“So I’m not locked in somehow? Can I really move my RRIF to a different investment provider?”

Yes. absolutely! You are not trapped with your current financial institution. If you find a more suitable RRIF provider, you have the right (and a personal obligation to your own financial security) to move that account.

“How do I make this move if I want to transfer my RRIF to a different financial institution?”

Not all investment accounts follow the same process of transfers. Moving an RRIF can be a bit tricky if you don’t have someone to walk you through the basics. That’s just what we’re going to do here.

As you probably already know, the RRIF account does not allow contributions (That makes it very different from an RRSP). In fact, the you need to make mandatory withdrawals each year you hold assets inside a RRIF account.

For these mandatory withdrawals, you can receive your money from a RRIF as a lump sum once a year, or get it as a quarterly or a monthly withdrawal. With me, so far?

Now, let’s say you are the type of retiree that wants to take one lump sum from your RRIF each year. You can move your RRIF at any time during the year after your lump sum payout has been withdrawn to your account. 

If you’re on a quarterly or monthly payout, and you’ve got a scheduled withdrawal for March (just as an example), you can move your RRIF any time after that without problems. The institution you are leaving will just have to pay you out the remainder of your withdrawals for that calendar year before they move the money to the new provider.

For folks on monthly or quarterly schedules, moving to another institution early in the year can be disruptive to their well planned out cash flow. And for that reason, many are advised to wait until later in the year before they make a move.

“I want to know that if I move my RRIF account, my money is still safe”

And it is — if you’re moving that account to WealthBar. All of the funds we manage are held with custodian members of Canadian Investor Protection Fund (CIPF), the same as at your bank. Even better, we use BBS Securities as a custodian. So, on top of the protection you get through CIPF (up to $1 million), your RRIF would be insured additionally for up to $10 million. That’s most likely even better than the protection you’d get at the bank.

Naturally, we’re here to make that RRIF transfer as quick and easy as possible. Send your under-performing financial institution into early retirement and move your RRIF to WealthBar today.

A few minutes today could save you thousands tomorrow.
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