Asset allocation, pension and multiple accounts as a single portfolio

[mart]

I searched but couldn't find exactly what I was looking for... Now that my and my wife's money has been moved to TDW, it's time to setup everything. RESP was hassle free, I went with the e-series and a slightly higher focus on the bonds.

I opted to treat the following as a single portfolio:
RRSP (wife + I)
RRSP + DPSP from my workplace
Spousal RRSP
LIRA
Wife's Pension plan (govt employee)

My current thought is to keep our TFSAs separate for now as an emergency fund (HISA) while we're in the process of building another emergency fund. Unless there's something better? ie: consider the TFSA as part of my fixed income so it's "safer" ?

What I'm having problems with is the RRSP, Spousal RRSP, TFSAs, LIRA and pension plan. According to my forum search during lunch, the pension plan can be considered fixed income at 180 x the monthly allocation you'll get so this one is taken care of. What I am unsure of is with if I should keep to a minimum the number of ETFs or funds held in each account:
- the "small accounts", ie where there is ~10% of the portfolio. Is it wise to have them only hold one fund or ETF ? I don't intend to contribute to the spousal RRSP anymore and can't contribute to the LIRA. It makes it cheaper from a fees point of view (less ETFs to buy) but I'm concerned about rebalancing or withdrawing issues in the future
- what about US equity and international equity: should I, for example, have all US Equity in my RRSP and all Intl equity in my wife's RRSP?

Thanks

[CanadianCapitalist]

What I'm having problems with is the RRSP, Spousal RRSP, TFSAs, LIRA and pension plan. According to my forum search during lunch, the pension plan can be considered fixed income at 180 x the monthly allocation you'll get so this one is taken care of. What I am unsure of is with if I should keep to a minimum the number of ETFs or funds held in each account:

My wife has a DB pension; I don't. What we have done is simply subtract the projected income stream from the DB pension from our retirement income needs. Therefore the portfolio spread out across various retirement accounts under our control are allocated based on our risk tolerance.

Since you are not going to contribute anymore to the spousal RRSP or the LIRA depending on the size of the account, it may make sense to go with mutual funds instead of ETFs. I would guess that the difference between mutual funds and ETFs will be marginal (assuming the account is small in size).

I don't think it matters much in whose RRSP account you keep a particular ETF. What matters is minimizing trading costs and taxes and whichever configuration works best, go for it.

[mart]

Thanks for your input (and valuable blog)

Since you are not going to contribute anymore to the spousal RRSP or the LIRA depending on the size of the account, it may make sense to go with mutual funds instead of ETFs. I would guess that the difference between mutual funds and ETFs will be marginal (assuming the account is small in size).

In this case, it would assume that in the LIRA and the spousal RRSP I have a full "couch potato portfolio" of a few e-series funds in each of them? There's about ~20k in the LIRA and ~20k in the spousal RRSP.

[CanadianCapitalist]

Okay, $20K is significant enough to just stick with ETFs. Think of it this way: let's assume that you are deciding between holding VEA and TD International e-series. The difference in MERs between the two is 0.36%. VEA pays most of its dividend once a year in December. The MER savings with VEA will be $72. If you make one trade to rebalance, your savings are still $60+ each and every year.

[CJOttawa]

Mart,
I won't duplicate any answers that CanadianCapitalist has already covered as he's far more knowledgeable than I am about those areas.

My current thought is to keep our TFSAs separate for now as an emergency fund (HISA) while we're in the process of building another emergency fund. Unless there's something better? ie: consider the TFSA as part of my fixed income so it's "safer" ?

Consider the emergency fund or funds as separate from your core portfolio.

I have one myself in a TFSA that pays 3% interest so it's at least somewhat protected from inflation and taxation and I don't count it toward the bond/cash/fixed-income asset class of the rest of my portfolio.

[mart]

Mart,
I won't duplicate any answers that CanadianCapitalist has already covered as he's far more knowledgeable than I am about those areas.

Yes, he's incredibly helpful.

Consider the emergency fund or funds as separate from your core portfolio.

I have one myself in a TFSA that pays 3% interest so it's at least somewhat protected from inflation and taxation and I don't count it toward the bond/cash/fixed-income asset class of the rest of my portfolio.

Mine is currently with TDW as well so I don't have that 3% interest. Having everything at TDW is convenient but I have to admit that I'll look at my plan a bit more.. unless canadiandirectfinancial pulls a "ING" where they attract everyone with the high rate then lowers the rates and people aren't bothered to switch..

So many hours of sleep lost reading this forum, canadiancapitalist and the canadiancouchpotato blogs as well as looking at different scenarios for asset allocation.. on the other hand, it's a sign that it's interesting to read.