Category: Planning to Retire Soon

Caution: Transferring RRIFs between brokers

RobHLeave a comment

DIY investors include a growing number of RRIF holders (like me). If you want a primer on RRIFs, you can read that here. There are some strange nuances involved with moving RRIFs between brokers which may not be obvious and are not documented anywhere — or if they are, I have yet to find where.

I’ve covered parts of this topic before, (here and here) but this post attempts to summarize the weirdness so you don’t get caught unaware. It is my belief that the cautions outlined below are applicable to ALL brokers, but happy to learn otherwise, just drop me a line at comments@moneyengineer.ca, I read all my mail.

For simplicity, I’m going to refer to the “sending” broker (the broker that currently manages the RRIF) and the “receiving” broker (the broker to whom you’re transferring those same assets).

Caution 1: A sending broker cannot transfer a RRIF unless it has fully paid out RRIF minimum for that year.

As RRIF aficionados will know, at the end of the calendar year, a new “RRIF minimum” amount is calculated by the broker based on the market value of the RRIF at that time and the age of either the RRIF owner or the spouse of the RRIF owner. This is a well-known fact. What is perhaps not so well known is that the broker who holds the RRIF at the start of the year is obligated to pay out the full amount of the RRIF minimum, even if that RRIF is transferred in the course of the year1.

This has implications, especially if you attempt the transfer early in a calendar year:

  • You are going to end up with “extra” cash that you weren’t expecting. You’ll have to be prepared to do something with that money, but what? Leave it as cash? Invest it in a HISA? Invest it in an all-in-one?
  • This early windfall also means that your potential tax-free growth2 is lost.

Caution 2: Waiting past end of November to initiate a RRIF transfer runs the risk of tying up your RRIF funds for multiple months

“Fine”, you think, “if I wait until late in the year to transfer my RRIF, I can avoid the problems inherent in Caution 1”. This is what I thought, too. I was, again, wrong.

There seems to be an industry-wide pause on RRIF transfers that starts in late November and lasts until January of the following year. I’ve seen more than one mention of it. Questrade’s message when I attempted to transfer-in my RRIF to them was

“Please be advised that RRIF/LIF account transfers are subject to the industry-wide cut-off date, November 28, 2025. This cut-off date is not specific to Questrade, but is arranged and agreed upon by all Canadian financial institutions to ensure yearly payments are made in an orderly and timely manner to all account holders.”

It appears I got extremely unlucky: the transfer STARTED before November 28th, but failed to fully complete before the deadline. Performing a transfer is a multi-step process using a service called “ATON”34. You can read all about how ATON works over here.

In my case, it took until mid-February for the transfer to complete. During that time, the account was in limbo, and no payments could be made. For someone who expects to be paid monthly from a RRIF, this was a bit of a problem.

Advice: Initiate RRIF transfers before November 1.

This ought to give enough time for the transfer to complete before the cut-off date. And minimizes the amount and time you have “extra” money floating around. You can help make sure your transfer goes as expected:

  • Make sure the assets you hold are supported at both institutions. GICs are a frequent problem. So are bank-backed HISAs. If you hold assets like that, do yourself a favour and sell them before you initiate the transfer so that they are just cash.
  • If you hold fractional shares in your account5, get rid of them by selling off the fractions or buy more so that you have whole shares. From what I’ve read, fractional shares are a construct that is broker-specific and will cause issues when you attempt to transfer them.
  • Make sure you have enough cash in your RRIF so that the sending broker can pay out your RRIF minimum before the transfer begins.

Happy investing. If a transfer really goes astray, it looks like OBSI can help.

  1. This CRA link seems to be the one that states this. ↩︎
  2. Since the average gains of the market are positive, I’m always going to make the assumption that it’s better to be invested than not. You could of course get lucky and avoid a big market downturn because your RRIF cashed early, but that’s not how I think about investing. Time in the market is always better than timing the market, per Ken Fisher ↩︎
  3. “Account Transfer Online Notification”, apparently per https://cffim-fcmfi.ca/wp-content/uploads/aton-best-practices-guide-Jan-15-2021-v9.9.pdf ↩︎
  4. I am indebted to Financial Wisdom Forum users NorthernRaven and OptsyEagle for their help in understanding what went wrong in my case ↩︎
  5. Wealthsimple (for all shares/ETFs) and Questrade (for some US shares/ETFs) both offer this option. There may be others. ↩︎

“How Much do You Need to Retire”?

RobHLeave a comment

This was the title of a recent webinar I attended via PWL. You can watch it yourself over here: https://www.youtube.com/watch?v=pQl6n4zepys. I don’t think I learned a ton from it — the short answer? “It depends”. “On what?”, you may ask. Here’s some things that influence the answer to the question:

It depends on HOW you live.

Put another way, “what’s your budget in retirement1“? This is a question that many people don’t have an answer to. There’s a few buckets to think about, it’s not intended to be exhaustive:

  • Necessities: shelter (and associated maintenance) and utilities(heat, light, water, internet, streaming services, phone), food, clothing, exercise, transportation and associated insurance/maintenance2, taxes (municipal3, federal)
  • Medical expenses (drugs, dentists, optometrists, physiotherapy)
  • Entertainment (eating out, shows, memberships/user fees)
  • Travel (transport, housing, activities)
  • Charities

One thing you don’t have to worry about is setting aside money for an RRSP, since once you’re retired, that’s no longer a thing. But don’t neglect the need for a savings fund for unexpected larger expenses. We always keep a “house fund” that gets a monthly payment that we don’t touch for anything other than home renovations or repairs.

Your bank/credit card4 statements5 might be a good place to see what your typical spending looks like.

It depends on where you live

Live in Toronto? Vancouver? Yeah, that’s not cheap. But if you were willing to move to, say, Thailand or a low cost Canadian city, you might be able to spend a lot less on housing. But since most people aren’t willing to uproot, these costs are known, or can at least be reasonably estimated. And if you’re staying put, then will you downsize? When?

It depends on whether you have a pension outside of CPP/OAS

And I’d add, “and it depends if that pension is indexed to inflation”. (The CPP and OAS are, which is why they are great).

It depends on how long you’re going to live

Not predictable, obviously. The oft-cited “4% rule” of retirement assumes a 30 year retirement. That’s living until age 95 if you retire at the “usual” age of 65. When I engaged a financial advisor in the lead-up to retirement, the charts stopped at age 95 as well.

It depends on whether you want to leave an estate to your beneficiaries

Want to die with nothing6? Then you need less money than if you want to leave assets behind. It’s a pretty fundamental question. And if you want to leave assets behind, then how much? And to who? (You do have an up to date will, right?)

It depends on what your CPP and OAS payments are likely to look like

CPP is dependent on how long you’ve been contributing to the plan, up to a maximum that is published annually7. You can take CPP as early as age 60, and as late as age 70, with penalities/bonuses accumulating every month. CPP needs to be applied for before the cheques start rolling in.

OAS is dependent on how long you’ve lived in the country. If you’ve lived here for 40 years or more, then you qualify for the maximum payment of $742.31 at age 65 and automatically starts at age 658 (for most people) unless you specifically ask for it to be deferred.

It depends on how much income you’re intending to make in retirement

The CPP isn’t designed to pay a living wage9. For this reason, many people “ease” into retirement by working part-time or on short-term contracts. This income impacts the answer to the original question — obviously, if you are earning money, then the retirement nest egg can be smaller.

It depends on what your retirement assets are invested in

This, in my view, is frequently overlooked. The fact is that retirement can be quite long, and assets invested in a retirement portfolio still have growth potential. My retirement assets are 80% equities, 15% bonds, 5% cash. This provides me with more growth potential at the risk of having to weather periods of market volatility. I’m comfortable with that degree of risk, but others may not be. Having a lower exposure to equities means your nest egg needs to be bigger.

It depends on future inflation

Inflation can fluctuate a lot over the course of retirement. Take the last 30 years as an example:

CPI for last 30 years, courtesy StatsCan (https://www150.statcan.gc.ca/n1/pub/71-607-x/2018016/cpilg-ipcgl-eng.htm)

Inflation is really the biggest concern in my retirement since most of my current income is not inflation-protected10.

My approach? Knowledge and a willingness to be flexible

What kind of knowledge?

  • I had a sense of what my budget desires were
  • I knew my retirement portfolio was going to stay 80% equities
  • I knew I had no pensions outside of CPP/OAS. With advice from my advisor, this lead to the current plan to defer these pensions to age 70 so I can maximize my inflation-protected income.
  • My advisor advised me that I had enough saved up that I could retire

But I gained additional, non-data-driven knowledge:

  • no realistic plan lasts 30 years11
  • that market returns are highly variable12, that inflation is highly variable, that my personal spending budget is highly variable
  • that I have always, always, always, adapted to life changes (income, expenses) by either being looser or tighter with money.

The decumulation strategy I use (VPW, Variable Percentage Withdrawal, talked about here) is deceptively simple, but requires you to be flexible, as your monthly calculated salary is based on your net worth. My salary has generally ticked upwards in the past 12 months, but it could just as easily turn in the other direction in the event of a sustained market downturn. I’ve decided I can live with that. And if you want to see a much longer test in action, check out longinvest’s VPW forward test at https://tinyurl.com/vpwForwardTest.

My final thoughts: be suspicious of a specific answer to “how much do you need to retire”? It depends on so many factors, including your own propensity to adapt to changing conditions, that a simple answer doesn’t seem possible — or reasonable.

  1. And does it change over time? I expect my budget needs are higher now than they will be in the future, when presumably I’m less able/willing to travel. ↩︎
  2. If you own a car ↩︎
  3. If you own a house ↩︎
  4. A lot of my spending takes place using my credit card so I can collect the free money offered. ↩︎
  5. A bit crude, but once in a while it flags something for me: https://www.cibc.com/en/personal-banking/ways-to-bank/mobile-services/insights.html ↩︎
  6. Doing this with 100% accuracy would imply you know the date of your own demise, so probably not a realistic objective ↩︎
  7. And is currently $1507.65/month if you’re 65 this year. ↩︎
  8. This one thing I did learn from the PWL webinar: that for most of us, unless you take action, the OAS will start when you turn 65. ↩︎
  9. Per the CPP website (emphasis mine): “The Canada Pension Plan (CPP) retirement pension is a monthly, taxable benefit that replaces part of your income when you retire” ↩︎
  10. Owning equities is a sort of imperfect inflation hedge since equity prices, like all prices, are influenced by it. ↩︎
  11. I’m reminded of the famous quote by Mike Tyson: “Everyone has a plan until they get punched in the mouth” ↩︎
  12. One year after paying for my retirement plan that informed me I was still three years from retirement, I retired. Why? My retirement savings had blown past “the number” I was advised to hit. And, after a year of retirement, my net worth is 10% higher than when I started retirement. The market sometimes works in your favour. ↩︎

Quick links for the long weekend

RobHLeave a comment

(Quick aside: as a retiree, I did have to make sure this coming weekend was, in fact, a long weekend 🙂 )

What’s the deal with AOA?: updated

While many Canadians are familiar with all-in-one products that trade on the Canadian exchanges (XEQT/XGRO, VEQT/VGRO, TEQT/TGRO, ZEQT/ZGRO), there is also a USD product that I use quite heavily in my retirement portfolio. That ETF is AOA. In this updated post, I break down what’s inside it. TL/DR: lots of US Equity, lots of International Equity, a tiny slice of Canadian equity, and broad coverage of the US and international bond markets.

Rob Carrick is back in (digital) print

One of my favourite ex-Globe And Mail staffers was Rob Carrick, the keyboard behind such valuable assets as the ETF Buyer’s Guide. He retired last year, but it seems he’s back doing the same job in a different way. He’s now writing on Substack, and you can find his words of wisdom over here: https://substack.com/@robcarrick1.

PWL on Retirement: “Finding and Funding a Good Life”

Not a new publication, but new to me…It’s penned by Ben Felix, a certified Canadian financial rockstar. Looks like a good read over a cup of coffee. Finding and Funding a Good Life.

RRIF Support Showdown: Wealthsimple, Questrade, QTrade

RobHLeave a comment

I’m currently holding RRIF accounts at three different online providers (QTtrade, Questrade and Wealthsimple)1. So I am perhaps uniquely positioned to comment on the relative goodness and badness of the support of this kind of account at these three brokers. I also have some experience with BMO Investorline in this regard, but that experience is getting a bit long in the tooth now.

So without further ado, let’s take a look:

Wealthsimple

Wealthsimple now provides support for both RRIFs and (relatively recently) Spousal RRIFs. And although Wealthsimple supports USD accounts, they do not (for whatever reason) support USD RRIFs2, which, for many readers, isn’t a big deal, but to me it is.

But for all that, I still hold a CAD RRIF with Wealthsimple. It started last year, when I realized my DPSP couldn’t be immediately converted to a RRIF, and Wealthsimple was offering a shiny new Macbook to win the business. How could a certified cheapskate refuse?

Since I only opened the RRIF last year, this year is the first year where I’m obliged to take out RRIF-minimum payments. Wealthsimple makes this stupidly easy on many levels:

  • They clearly display what your minimum payment for the year is right on the account screen, and they also show how much you have left to go against that minimum
  • They make it easy to create a “recurring withdrawal” from the RRIF, which is something I do every month, and I can easily change this whenever I want, although I’m not planning on doing that.
  • And — bonus — they support XGRO fractional shares AND the ability to place a sell trade in dollars and cents rather than # of units. This means I can sell EXACTLY the number of XGRO units I need to every month, with no excess dead-money cash floating around.

You have to set up your bank account for EFT withdrawals before this works, of course.

QTrade

I still hold 3 RRIF accounts at QTrade, although I’ve been trying to move them to Questrade since late November. Seems that there is an industry-wide freeze on moving RRIF accounts in the month of December.

QTrade supports USD and CAD RRIF accounts, and they keep them completely separate — different account numbers, even. They are linked, however, because the TOTAL value of the 2 accounts is used to determine your CAD RRIF minimum payment. I’ve only withdrawn RRIF funds in Canadian dollars, because I couldn’t get a straight answer whether I could withdraw USD funds natively to my USD account.

QTrade also supports Norbert’s Gambit, which is important if you want to convert between USD and CAD cheaply.

With QTrade, you have to send in a form to set up your RRIF withdrawals, either monthly/quarterly/annually. And per their fee schedule, if you deviate from this, you owe them $503.

Once the schedule is in place, the withdrawals happen automatically. You have to make sure you sell your assets in advance of the withdrawal date. What happens if you don’t have enough funds? Not sure, cannot find any documentation that addresses this. There is also no indication online as to what your RRIF minimum payment is; you have to contact support if you want the exact amount.

Questrade

The majority of my RRIF holdings are here. As mentioned above, I’m trying to move 3 RRIF accounts from QTrade to Questrade. The delay from end of November to beginning of January seems like it’s explainable by the aforementioned industry-wide freeze. But since then, I lay the blame fully on Questrade for dragging their feet on getting the right forms in QTrade’s hands.

Questrade supports USD RRIFs, and combines them with CAD holdings. Same account for both, and they do a nice job of providing you with multiple views so you can see your portfolio in either currency.

Questrade also supports Norbert’s Gambit, and I’ve used it multiple times already to convert USD holdings into CAD holdings.

Questrade requires a form to set up RRIF payments, and like anything involving a form at Questrade, you have to sit on top of support to make sure someone actually reads the form.

Like QTrade, Questrade treats RRIF minimum payments as some sort of secret, forcing you to contact support if you don’t know what the value is.

You can also exceptionally get “extra” payments using the “Move Money” menu. I am not sure how withholding tax would work if you did this. It appears that you could also withdraw USD from this menu. The “Move Money” menu is one that seems to be rather fragile — bank accounts previously linked have a habit of disappearing from this screen.

As I write this, Questrade is only batting .500 in delivering the first RRIF payment. I got mine, but my spouse did not. Unclear why this may be, the support person I spoke to also seemed perplexed.

The Verdict

If you have USD in your RRIF, I would probably pick Questrade over QTrade. Questrade’s support of “on demand” payments is a nice flexibility. The one downside is that Questrade charges a flat fee to execute Norbert’s Gambit, whereas QTrade, as far as I can tell, does not.

But once Wealthsimple supports USD in RRIFs and Norbert’s Gambit4, they would be my #1 pick for managing the RRIF payments. High degree of automation, high degree of flexibility, high degree of transparency. If you don’t have USD in your RRIF, then I could recommend Wealthsimple over the other two.

  1. Mishaps and greed have contributed to this current situation. I don’t condone it. ↩︎
  2. Proof: https://help.wealthsimple.com/hc/en-ca/articles/17933575404315-Open-a-RRIF#h_01H8Y8853951RYHHA80S11T5Y9:~:text=Can%20I%20hold%20USD%20cash%20in%20my%20self%2Ddirected%C2%A0RRIF%3F ↩︎
  3. I’ve never had the need, but be forewarned! ↩︎
  4. Coming this quarter per this PR. ↩︎

Questrade and RRIFs: Annoying

RobH4 Comments

It’s January 2026 and so I’m about to undertake my first withdrawals from my Questrade RRIFs. For the entirety of 2025, I’ve only had to deal with QTrade’s methodology for RRIF payout, which looked something like this:

  • Determine what my monthly RRIF-minimum amount would be. (For QTrade, I had to call support to get this number…why, I don’t know). Once this was established, it didn’t change for the year, so that was easy.
  • Before the end of the month, I had to sell assets to make sure I could cover the monthly payment
  • The minimum payment was taken from available cash and deposited into my linked chequing account without any action on my part on the last business day of the month.

So for Questrade, I’m trying to do the same thing, but so far, no joy.

  • Determine what my monthly payment is. When I talked to an agent on January 2, they could not tell me as they claimed that it wasn’t available yet. Or they didn’t understand my question.
  • Today, I got an email from Questrade, reminding me that my payment was due shortly and to make sure I had enough cash to cover the payment. And if I didn’t know what the payment was, I had to call support.
  • I also learned that if I don’t have the cash to cover the payment, they’ll just skip it.1

Now, of course I know how to work out what my RRIF payment for any RRIF account will be — all you have to do is know the RRIF value at the start of the year and know how old you are2, and presto. But because my Questrade RRIFs have USD components, knowing the exact exchange rate is also necessary, and that’s where uncertainty creeps in.

Anyway, I have a pretty good idea what the minimums will be, but I’m not going to hang out for an hour waiting to talk to an agent3 to get it penny-accurate. I’ll have a little extra cash for the first month, at which point it should be clear enough what my monthly payments will be.

This is yet another example of small, but rather irritating shortcoming from the provider of my choice. One that you wouldn’t know about until you experienced it firsthand. Would it really be so hard to report the amount on my account screen4? Anyway, something to ponder if you’re nearing retirement or are starting a RRIF with a new provider…

  1. QTrade would’ve sold things on my behalf and charged me for the privilege, so I suppose this is a better option ↩︎
  2. What the CRA refers to as a “prescribed factor”. You can’t make this stuff up. Their charts only show the factors starting at age 71, but believe me, you can take payments from a RRIF well before that age. ↩︎
  3. Word to the wise: avoid talking to Questrade support when they have a promotion running, it will seriously test your patience… ↩︎
  4. I note that Wealthsimple and BMO Investorline both do ↩︎