# RRSP vs DCB?



## Simon Says (Jan 5, 2013)

Hello all, I have a defined contribution plan at work worth about $175k invested in the blackrock lifepath 2045 plan, I'm currently maxing out my companies matching contribution. Our annualized percentage fee is 0.54%. My wife and I have no RRSP's and we both have about 30 years until retirement, in other words we have a lot of unused contribution room.

My plan was to open the RRSP and using a TD E series account follow the global coach potato portfolio using the e-series funds. Now I'm wondering if it would make more sense just to sink those extra funds into the lifepath fund in DC plan? The expense fees on the coach potato portfolio will be slightly less in the .3x range.

I'm just looking for some advice. I don't like that my company has control over the DC plan and could switch something at anytime, however I could withdraw my portion of the funds if I saw fit. On the other hand the RRSP will give me a tax break and I can reinvest the return.

Your thoughts are appreciated.

Si


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## GoldStone (Mar 6, 2011)

I vote for the RRSP. You save on fees right away. Once your RRSP is large enough (~50-100K), you can replace e-series funds with ETFs to reduce the fees even more.

Flexibility is another consideration. RRSPs are more flexible than DC Plans when you start drawing down the retirement income. (assuming the rules stay the same 30 years from now)

On the other hand, ask yourself how much you like DIY investing. If you dread the process, LifePath fund is a good one-stop solution.


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## james4beach (Nov 15, 2012)

I've got a rule of thumb with my money management: whenever possible, reduce the number of middle men between you and your money. Right now the chart looks like this:

You -- employer -- plan advisor -- management co -- fund manager -- broker(s) -- fund managers of sub funds -- your money

Every one of those 'professionals' takes their cut along the way and has the ability to exert control, and it's probably not in your best interest. It virtually never is (why do you think these guys are rich?)

That makes a case for the RRSP. You gain transparency and visibility of exactly what's going on with your money and you don't have to do a lot of work. I think there's an instant benefit, here's the resulting chart:

You -- TDW -- fund manager(s) -- broker(s) -- your money


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## iris_lf (Feb 13, 2014)

1. DCB and RRSP give you the same tax break...there is no difference in terms of this
2. never a fan of those life path fund..It is based on your age, not how the market is doing...Let's say, in year 2008, you were 55; in 2007, in your life path fund, the assets allocation was 70% equity and 30% fixed income and would be changed to 50% equity and 50% fixed income when in year 2008...now here came the market crash..guess what, the life path fund would sell 20% of your assets in the least favorite time and bought into a very high priced fixed income...You have absolutely no control over this.


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