# Withdrawing Cash Through LIF in USD



## gimme_divies (Feb 12, 2011)

Hi everyone,

I am currently managing my mom's LIRA which is an ever-growing dividend growth machine spread about 30% Canadian dividends and 70% US dividends. I realize this is pretty heavy into USD, and thankfully this has really helped the portfolio in the last few years. Right now, my mom receives about $9K per year in US dividends, with a DGR of roughly 7-8% annually.

That being said, after being laid off from her IT consulting job a few years ago, and having dealt with my father's passing last July, she has started a business baking and selling (in mass quantities) handmade french macaron cookies among other baked goods. 

http://scratchkitchen.com/news/petits-macarons-by-lori-recipe-for-raspberry-macarons

Her business has done incredibly well as within a month of producing her first batches of macarons she was able to sign on with a major grocery chain in Ottawa, increasing from the first store in July 2013 to 7 stores as of today (about 4-5K cookies/month). She has also started creating wonderful favours and cake alternatives for weddings and got rave reviews from staff at the Chateau Laurier and the Ottawa Convention Centre (McGuinty family wedding). Another recent hi light was being interviewed on CTV news during the Farm Boy Vendor Fair. So, you can tell that I am very proud of what my mom has done and she deserves every ounce of success she's had with this small business. 

That being said, with this business, my mom is required to buy large quantities of ingredients which she buys mostly locally but she also buys her packaging and other supplies from the US (lots of Amazon for example) and also from Chinese suppliers. She is starting to realize that she is getting hit really hard by the weak CAD vs. USD on top of all of the transaction fees she is paying on her credit card for all of the USD transactions.

My question (in an effort to keep this as brief as possible), therefore, is this:

Is it possible to convert my mom's LIRA into a LIF (she will be 56 in Dec and pension eligibility I am pretty sure is/was 55) and basically take her US$ dividends and withdraw the cash into a US$ bank account either with a Canadian or US financial institution?

This would then enable her to pay for her business supplies with dividends from investments on which she has already paid the currency conversion fees. I also believe this is an excellent way to mitigate some of the risk of her being highly invested in USD by using the cash as working capital for her business instead of re-investing it in more stocks and creating even more currency (and asset allocation) risk exposure. I also wonder about the tax implications, if any, from this scenario.

If anyone can take a stab at this, I would really appreciate any input you can provide. Let me know if I left out any key info that I can share as well.

Kind thanks!

gimme_divies


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## Spudd (Oct 11, 2011)

I have no idea about the main question you have, but wanted to mention the Amazon.ca visa card doesn't charge FX, so she could start using that if she's not able to get the USD out of her LIRA. And congrats to your mom on such a great new business!


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