# N00B - RRSP Allocation



## maplesyrup (Jan 5, 2016)

CMM members,

This forum presents a tremendous wealth of information. Thanks all for contributing to this.

I am approaching 40, but am a complete investment N00B. All of my retirement funds are in Manulife's RRSP (about 100K). I am currently living overseas, so I expect minimal contributions going forward.

I am looking to make the best allocation for the funds in RRSP with a 10-15 year horizon (targeting retirement in 2025-2030) . I am a moderate to medium risk investor- Capital preservation and growth is my priority. 

I am currently spread far and wide across a bewildering array of funds with some ridiculous MERs to boot. I have been moving about 3-4K a month from GIAs to equity funds but I want to speed up this process and also reduce the number of funds in my portfolio. My current state is:

1001*Manulife 1 Year GIA 6%
1002*Manulife 2 Year GIA 7%
1004*Manulife 4 Year GIA 2%
1005*Manulife 5 Year GIA 6%
1010*Manulife 10 Year GIA 11%
2025*ML Retirement Date 2025 a7 1%
2144*ML Fidelity ClearPath 2025 k7 1%
2504*ML FT LifeSmart 2030 Consv f3 5%
2505*ML FT LifeSmart 2030 Mod f3 1%
2506*ML FT LifeSmart 2030 Grwth 1%
4131*ML Canadian Bond (MAM) d8 10%
4161*ML MFS Fixed Income e6 10%
4162*ML MFS LT Fixed Income c2 25%
8131*ML MAM U.S. Equity Index e2 3.5%
8322*ML BR U.S. Equity Index h3 13%


I would like to seek your help on the following.

1. What annual return rate should I be targeting given my risk profile?
2. Do I stay with Manulife? 
3. If Manulife is a good choice, what funds/allocation would you recommend? 
4. If not, what other options that I can consider where I can open an account remotely (Not easy to reach a branch from overseas). Also what funds should I target and at what allocation?

Thanks all.


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## Beaver101 (Nov 14, 2011)

^ No (easy) answers to your questions here but a starting point is to reduce the duplications (or figure out which duplications to reduce) in each of the GIA/fund categories. Eg. Do you need 3 different LifeSmart "2030" funds or 5 Target Dates funds of 1%, 5%, allocations? Keep in mind of any costs to switch the funds in a period of time. 

Also, the % on those GIA wouldn't be the interest rates, especially the 10 Year GIA (not CDIC insured)?


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## maplesyrup (Jan 5, 2016)

Beaver101 said:


> ^ No (easy) answers to your questions here but a starting point is to reduce the duplications (or figure out which duplications to reduce) in each of the GIA/fund categories. Eg. Do you need 3 different LifeSmart "2030" funds or 5 Target Dates funds of 1%, 5%, allocations? Keep in mind of any costs to switch the funds in a period of time.
> 
> Also, the % on those GIA wouldn't be the interest rates, especially the 10 Year GIA (not CDIC insured)?




Thanks much for the advice Beaver101. I have kept all my GIAs untouched for a couple of years now, so I don't expect penalties. 

I am looking to focus on the following and move all my GIAs into these over a period of 5-6 months- Both these form only 1% of my portfolio for now and I intend to make them 40% of my portfolio.

2025*ML Retirement Date 2025 a7 
2505*ML FT LifeSmart 2030 Mod f3

In addition to the above, I intend to keep the following funds below intact to cover the balance 60% of my portfolio.

4131*ML Canadian Bond (MAM) d8 10%
4161*ML MFS Fixed Income e6 10%
4162*ML MFS LT Fixed Income c2 25%
8131*ML MAM U.S. Equity Index e2 3.5%
8322*ML BR U.S. Equity Index h3 13%

Thoughts on this?


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## Beaver101 (Nov 14, 2011)

^ You're to a good start to streamline your array of funds in your RRSP held with Manulife. And your new composition (40% Retirement Date +60% Fixed Income & US Indexed funds) seems to indicate you're a Conservative-Balanced investor rather than a moderate to medium risk investor. Nothing wrong with this if you're have ran the Risk Tolerance test (questionnaire). You may want to streamline the Fixed & LT Fixed Income abit further - what's the difference between these 2? And do they include Bonds of which you have allocated 10% of your portfolio? Of these 2 Fixed Income funds to streamline further - you may want to pick the one with the lowest MERs.


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## Eclectic12 (Oct 20, 2010)

If you are "living overseas" ... does this mean you have given up Canadian tax residency.

If so, I believe this restricts the choices for moving away from ManuLife as I am not sure a NR can open another RRSP account.
If not, being overseas likely complicates the process but I expect one would be able to open an RRSP with say a discount broker then transfer everything out of ManuLife so that one has complete control over what is bought/sold and what MERs or fees are paid.


Cheers


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## chantl01 (Mar 17, 2011)

Eclectic12 said:


> If you are "living overseas" ... does this mean you have given up Canadian tax residency.
> 
> If so, I believe this restricts the choices for moving away from ManuLife as I am not sure a NR can open another RRSP account.
> If not, being overseas likely complicates the process but I expect one would be able to open an RRSP with say a discount broker then transfer everything out of ManuLife so that one has complete control over what is bought/sold and what MERs or fees are paid.
> Cheers


It is possible for a nonresident to open an RRSP account in Canada - I helped my cousin with this last year. They will need to be in Canada to do it, though, and provide a fair bit of documentation, but the discount brokerage (we used TD Waterhouse) can use the same paperwork to transfer the Manulife RRSP holdings (in cash or in kind, as applicable) into the discount brokerage RRSP. In my cousin's case it was moving from Investors' Group so we could set up an ETF-based couch potato asset allocation. Important to note - non residents cannot buy mutual funds through a discount brokerage. Only ETFs and stocks. Or at least that was the case for my cousin, who is a resident of Belgium. It may differ for other countries of residence.


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## Eclectic12 (Oct 20, 2010)

So instead of being impossible ... it will be more difficult (ex. have to be in Canada).


Cheers


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