31 thoughts on “I maxed out RRSP and TFSA now what?”

  1. Hi Bob I’m just wondering your thoughts on when I retire if I have a good some let’s say 500k in rrsp what’s the best way for me to withdraw my rrsp to avoid the most amount of tax if my rrsp goes to a riff there’s only so much u can take out no? I have tsfa also just wondering with rrsp to maximize monthly amounts while lowering taxes for the year and withdraw tax? Thanks

  2. Can you maybe write an further article on this: “One very important thing to keep in mind when investing in a taxable account is that you need to keep track of your adjusted cost base (ACB). Usually your brokers can keep track of this for you but I highly recommend keeping a spreadsheet yourself for record keeping sake. If you decide to enroll in the dividend reinvestment plan in your taxable account, it is vital to keep track of your ACB.”

  3. Any harm with holding US non-dividend paying stocks in a taxable account? My RRSP and TFSA are almost maxed out. Thanks!

    • Hi Connor,

      That’s a good question. There’s really no harm holding US non-dividend paying stocks in a taxable account. When you do sell, you have to declare capital gain or loss accordingly.

        • If it’s non-dividend stocks then there’s no withholding tax. If you’re investing in US dividend paying stocks, it’s subjected to the 15% withholding tax and the dividend amount is treated as working income and taxed at your marginal tax rate. However, you do get foreign tax credits on the 15% withholding tax that you paid. Hope this helps.

  4. Hi Bob,

    Happy 2022 and thank you for all the insightful and practical information you provide both on a financial and lifestyle approach. Love the balance and its always nice finding like minded people like one self.

    When it comes to your non-registered accounts, do you have a preference to put dividend growth stocks with a higher yield and lower capital appreciation or a lower yield and potentially higher capital appreciation over the long term?

    Example would it be better to put ENB, FTS and RY in the unregistered vs ATB, TFI and MG in one’s TFSA or vice versa?

    Cheers and keep up the great work.. Hope you crush your 2022 goals 🙂

    • A good question, it depends on many factors. For me, I don’t pay too much attention in terms of high yield vs low yield dividend stocks when I purchase them in non-registered account. The important thing is to buy a solid company that you can hold for a very long time.

  5. What’s your thought on HGRO, compared to dividend stocks in a non-registered account? I read your thoughts on it for an RESP but was curious if your opinion changed if it were in a different account.
    I appreciate your posts and this blog, thank you.

  6. Nice very clear article.

    Beginner level question

    Taxable account is what , I mean when I goto my bank I tell them I need to open RRSP or TFSA what kind of account I should ask them to open if I have maxed out my RRSP and TFSA. Thanks-Zasid

    • Taxable accounts may have different names depending on the broker you’re using. Some common names are:

      -Taxable account
      -non-registered account
      -Margin account
      -Cash investment account

      • This is great thanks for the info I will check with Questtrade.

        One more question please lets say I max my TFSA now for this year and RRSP is max too
        next year I get another TFSA living I think its 5500 or 6000 and I invest 6000 today in my taxable account how can I move that money into TFSA to get it tax sheltered. what would be the best and efficient way to do it? thanks

        • A good question. The TFSA limit for 2022 should be 6000, which might be 6500 if inflation is higher than expected. If you invest $6,000 in your taxable account today and want to move that money into TFSA next year you can do the following:

          1. Sell stocks then transfer the $6,000 cash into TFSA.
          2. Transfer equivalent of $6,000 in stock into TFSA.

          Both will count as TFSA contributions and for both, you will need to declare capital gains/losses when you file your income tax. Furthermore, for #2 you will need to be careful since it can take a few days to transfer the stock into TFSA and the stock value may change on the day of the deposit… so you need to make sure it’s below $6k or you’d be considered as an over-contribution.

          The easiest way is to do option #1.

  7. Great Blog.

    I put all my Canadian ETF’s in non-Reg. If you don’t do this you aren’t taking advantage of the preferential tax treatment on Canadian Dividends. You can earn about $55K in Canadian Eligible Dividends tax-free in Ontario! This differs from province to province.

    I hold my fixed income (Bond ETFs) in my RRSP. You wouldn’t want to put them in TFSA because they will not grow as much as equities. TFSAs are tax-free so you want to maximize growth there. RRSPs are tax-deferred. You will have to pay taxes on that money eventually.

    US Equities go into RRSP and Non-Reg. Keep in mind that if you hold US ETF’s in RRSPs, you should hold ones that are traded on US stock exchanges such as ITOT or VTI as only these are exempt from the 15% foreign withholding tax. If you hold US ETFs traded on Canadian Stock Exchange like UXX, VFV or VUN, the foreign withholding tax exemption is lost resulting in a tax drag of about 0.26% per year. To keep things simple, I now only have my US ETFs in a registered account. I’ll get the withholding tax taken off, but I get it back when I file my tax return.

    International Equities go into my TFSA because they typically have higher yields compared to US Equities and foreign dividends are fully taxable.

    Asset location strategies such as this will add between 20-30 basis points per year to your return or $2,000 – $3,000 on a $1,000,000 portfolio. If your portfolio is less than 7 figures, it may be simpler to just go with an all-in-one ETF (VBAL, VGRO, etc) for simplicity, but once you hit the 7 figure mark it starts to make a difference to split your portfolio into separate asset classes.

  8. Great summary, Bob!

    A finer detail that I learned last year is to be wary of the US companies that issue a K-1 form at tax time. These are companies that are structured as partnership interests. I think of them like the companies in Canada that issue the T5013 (Brookfield anyone?).

    K-1 companies have distribution income taxed at the maximum rate (35%) and it’s very difficult to get it back (you have to file a US tax return). Holding these in your registered account doesn’t shield you either.

    Per my understanding, and without the help of a good accountant, Canadians are probably best not buying these.

  9. Great read, enjoyed it as your description of US/CAN holdings in a TFSA versus a RRSP is very clear. Does this also hold true for LIRA and RRIF.?

    • If individual international stocks – RRSP to avoid the withholding tax.
      If ETFs with international stocks – RRSP, TFSA, taxable, it doesn’t matter since the distributions you receive already has the withholding tax deducted. If you hold the ETFs in taxable account you could recover it via the foreign tax credit. However, the distributions will be taxed at your marginal tax rate.

      • I would think 99% is a little high. After all, encouragement to understand money and how to control your money during a lifetime is rarely discussed amongst family members. Buying a TV gets more discussion!

  10. Thanks for this Bob. Can you tell me if VFV.TO would incur the 15% withholding tax if held in a TFSA? It’s a TSX version of VOO (US). Also some of these ETFs have stocks that pay different types of dividends so the withholding tax isn’t on the entire dividend but only on those specific holdings. Is there a website or tool that breaks these down for ETFs? Lastly, how is the reporting on these (I use Questrade and Wealthsimple Trade), or is it already deducted from the dividend we see coming into the account?

  11. Once you get into non-registered investment accounts, what do you have to do at tax time?

    Do you just receive a T5 (?) automatically like a T4 from your broker for any capital gains/interest, or do you have to do something more complicated?


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