# (Simple) RRSP & TFSA plan for my kids?



## jargey3000 (Jan 25, 2011)

Ok. If this subject has been posted somewhere else, please re-direct me.
I have 2 daughters age 32 & 30, married, no children (yet). They both have had similar RRSPs for a few years now, each comprised approx. 50% in the RBC Balanced Fund ('cause that's where they bank), and a couple of GICs. Total value approx. $25 in each RRSP plan. We've just recently opened a TFSA for each, with initial investment sitting in cash.
Neither one of them has any real investing knowledge - or interest in it for that matter! (Oh, they like the things money can buy, though!) so we'd like to set up a nice, SIMPLE, "set-it-and-forget-it" approach for both the RRSPs & TFSA. They will make reg. contributions & their employers will also contribute (to the RRSPs).
My initial thought is to first get out of the RBC fund & switch to a Mawer Balanced Fund (which one?) for the RRSPs , and keep GICs in the TFSAs. Too simple?
I'd appreciate some comments / input/ suggestions from others, to see if we're on the right track, bearing in mind the K.I.S.S principle! (humble pie, fat cat & others : no calls, puts, options or other fancy maneuvers for the girls here  )
Something that maybe 20 -25 years from now the girls can look down on my grave & maybe say: "Gee Dad, thanks for setting up those plans for us." ...


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## cashinstinct (Apr 4, 2009)

I would put more growth in TFSA, since it's Tax-free. I don't see GICs in TFSA... if you want fixed income, RRSP is where it should go.

What I do suggest my gf: monthly automatic contributions to index funds: CAD, US, INT, bonds. fixed amont per month.

See here for RBC or Altamira funds if your kids want to stay with RBC:
http://canadiancouchpotato.com/recommended-funds/

I have such setup to buy monthly automatic with TD e-series, maybe the same can be done for RBC?

The only issue is calling again to increase monthly amonts when there are salary increases in the future.


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## OnlyMyOpinion (Sep 1, 2013)

You maybe mean $25k?
We got my two kids into MAW104 in their RRSP's for the same reason - contribute and forget. We seriously considered couch potato but decided to keep it even simpler. We realize past performance is no promise of future results... They do have TSFA's and trading accounts with more action and complexity. 
It looks like RBC's Balanced fund has a 3.6% 10yr return and a 2.16% MER  
You realize balanced funds already have a fixed income component, the GIC's in the RRSP aren't necessary unless they were there for some short term reason.


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## lost in space (Aug 31, 2015)

jargey3000 said:


> Neither one of them has any real investing knowledge -


Give them each a copy of Millionaire Teacher by Andrew Hallam it's a fun easy to read book and will give then everything they need to know about investing. I've given away a bunch copies to family and they all enjoyed it.


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## humble_pie (Jun 7, 2009)

hello, i'm paying you a _call_ so i can _put_ down a comment & may i say that i think these _options_ you have thought up for your daughters sound perfectly lovely.

re the RRSPs, perhaps these should be the priority since the employer(s) will also contribute? you could consider just the plain Mawer balanced. The Mawer tax-effective balanced is for non-registered accounts, i'd skip over the global balanced, so that leaves plain Mawer balanced.

at the outset of the new plan, the "couple of GICs" that exist already will have to remain, no? IMHO this is a nice step in these volatile times, it will give the relative freedom of mawer balanced fund while reserving full principal in the remaining GICs, which can be gradually used to make additional commitments to mawer as they mature. In effect, a built-in dollar-cost-averaging approach.

small caution: mawer funds are not available through all brokerages & i don't know if royal bank, where your daughters' RRSPs are presently held, offers mawer. If not, how will you solve that problem? 

turning now to the TFSAs, i'm a little more hesitant because i'm not sure it's such a good thing to gift significant $$ to adult offspring who don't care about investing & who are known to enjoy spending. You might think you are implanting lifelong habits of prudent saving but the truth might be that your TFSA gifts are going in one door & soon straight out the other side as withdrawals!

what about giving the offspring an investment primer & talking with them about how you'll match any dollars they can save themselves & contribute themselves to their own tax-frees?


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## jargey3000 (Jan 25, 2011)

Good comments. Thanks. Couple of points:
onlymyopinion- yes I DO mean $25K ! glad you brought up couch pot. I was considering that as well. yes, bal fund + gics is overlapping.
lost - thanks, but they WON'T read it!. the next book they read will be their first! 
humble - Mawer Bal. it is then! thanks. (plans are with the Direct Investing side of RBC - assuming Mawer is avail. thru them?). re TFSAs. sorry if I gave impression I was giving them the funds. It'll be their own money. (in fairness, they are savers, and fairly prudent - I like to think their old man taught them a few things ... by example.)


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## humble_pie (Jun 7, 2009)

re RBC DI & mawer, you'd have to check. Not all brokers are willing to offer mawer, probably because they don't pay retainer fees or they don't pay as high retainer fees as other fund companies (the flip side of this is that not paying retainer fees is one of the ways Mawer keeps their MERs low.)

TD does sell mawer, so probably do some other brokers.

re the TFSA, it sounds like more than half the battle is already won. If they're already saving their own money & funding their own registered plans, that's fabulous news. Not to worry about pesky trivia such as reading a book. If they don't want to read one now, i'm sure they will one of these fine years.

ask them what they'd *like* to invest in, in their TFSAs, & ask if they could have a rough plan ready by Thanksgiving.


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## jargey3000 (Jan 25, 2011)

....haha....might as well ask them to read a book by Thanksgiving..... thanks.


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## none (Jan 15, 2013)

Gawd, setting up a financial plan for 30+ adults is just so ... I don't know the right term: Pathetic? Jesus, talk about a failure in parenting.

Let them be adults for chrissake.


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## OnlyMyOpinion (Sep 1, 2013)

Looks like RBC DI is out. Does that tell us something about RBC, as in "where is our pound of flesh"?

*Investing through a Discount Broker or Investment Advisor*
_Mawer Mutual Funds are also available for purchase through Investment Advisors and discount brokers (*with the exception of RBC Direct Investing*).
A minimum initial purchase of $5,000 per fund is required. Once the initial minimum is met, there are no minimum requirements for additional investments.
The Mawer Funds are no-load — no sales or trailing commissions, no set-up fees, and no purchase, transfer or redemption fees. The Management Expense Ratio (MER) for the Funds is the same regardless of whether they are purchased through a broker or directly with Mawer. Additional Investment Advisor or discount brokerage fees may apply._
http://www.mawer.com/individual-investors/ways-to-invest/


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## jargey3000 (Jan 25, 2011)

doh!


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## humble_pie (Jun 7, 2009)

OnlyMyOpinion said:


> Looks like RBC DI is out ...
> 
> " Investing through a Discount Broker or Investment Advisor
> 
> " Mawer Mutual Funds are also available for purchase through Investment Advisors and discount brokers (*with the exception of RBC Direct Investing*)




actually for 2 modest RRSP accounts, i wouldn't bother moving to another broker that does do Mawer balanced fund.

reason? the savings that would arise from the lower MER at mawer vs a higher MER at presently-held RBC balanced fund, on 2 smallish 25k accounts, would not be worth the effort involved in moving.

moreover these 2 RRSPs are said to contain GICs as well as RBC balanced fund. It is said that, among discount brokers, royal bank has the best fixed income offering. It's possible that their GICs cannot even be moved to another broker.

another reason to leave things where they're at.

i would not split the accounts either, by sending some $$ from each account to purchase mawer in a new account at another broker. At $25k each, the convenience of one house outweighs a few $$ of savings imho.

the only thing i would consider is based on a tidbit that altaRed once posted. Folks were lamenting how it's only TD that offers ultra-low-cost indexed e-funds. But if i'm remembering correctly, altaRed posted that royal bank also offers indexed ETFs or e-funds although they're a bit hard to find & perhaps not quite as cheap as the big green.

it occurs to me that jargey might want to swap the managed RBC balanced fund holdings for the less expensive balanced index equivalent.

overall, i find the existing plan for the daughters' RRSPs to be very good.

the real challenge & the real task is to motivate the daughters to understand that their financial independence is truly important. Many other young women are active on this theme so hopefully the daughters will catch on.


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## OnlyMyOpinion (Sep 1, 2013)

humble_pie said:


> actually for 2 modest RRSP accounts, i wouldn't bother moving to another broker that does do Mawer balanced fund.


I don't disagree. I was just pointing out that MAW does not appear to be an option for them at RBC. Both the OP and I had thought they were a possibility. I should have confirmed before I posted initially


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## jargey3000 (Jan 25, 2011)

thanks for input guys. appreciated!


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## CalgaryPotato (Mar 7, 2015)

When I first read this I thought you were talking about kids that just turned 18.... so your daughters are in their 30's and married and you are managing their money for them?

I think you need to let them go. Send them links to some threads from here, or links to Canadian couch potato.com or some of the great blogs from people on this site (or elsewhere.) Let them learn for themselves and make their own decisions.


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## OnlyMyOpinion (Sep 1, 2013)

I agree that there needs to be a 'handoff' in the plans. Make sure you are not unintentionally discouraging them from looking after their own investing/investments. Make sure they are aware and educated,etc.

At the same time, people well past their 30's pay for advice, or defer to a financial rep and place their money in expensive or sub-par investments. So if both parties are willing, I don't see a problem with a knowledgeable Dad or Mom offering financial advice to their adult children. It's nice to know we might still be good for something 

Added: Possibly related? I found this interesting (A 2007 study, probably more true in 2015):
http://www.statcan.gc.ca/pub/11-008-x/2007004/pdf/10311-eng.pdf
_"In recent years, social scientists have found that the transition to adulthood is taking longer to complete. Young people are living with their parents longer, are more highly educated and attend school for more years than their parents did. The age at marriage has been rising, fertility rates have been falling and the age at which women have their first child has been increasing."_


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## none (Jan 15, 2013)

CalgaryPotato said:


> When I first read this I thought you were talking about kids that just turned 18.... so your daughters are in their 30's and married and you are managing their money for them?
> 
> I think you need to let them go. Send them links to some threads from here, or links to Canadian couch potato.com or some of the great blogs from people on this site (or elsewhere.) Let them learn for themselves and make their own decisions.


I know right? I always find it weird when people actually think coddling their kids and turning them into life-long dependents are actually doing them a favour. The job of a parent is to teach their kids how to be adults and fend for themselves and actions such as these just perpetuate the bad parenting. It's really sad.


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## jargey3000 (Jan 25, 2011)

I was going to let these comments go ...but...Believe it or not folks, not everyone shares your interests in the mundane world of investing. I would venture to say there are more people who have never heard of CMF, and its ilk, than have. Just because a person does not have a financial 'bent' or interest, does not necessarily mean he or she has been 'coddled' all their lives, or doesn't excel in other areas..
Oh - to be a paragon of parenting.... with consummate, financially-astute off-spring.... apparently like SOME of those above.
I don't know if you're attempting to be edgy, or controversial, but to me, it comes off as a little bit nasty & mean-spirited. Maybe think twice...before you pounce...


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## CalgaryPotato (Mar 7, 2015)

I'm not trying to be particularly "edgy or mean spirited" I just think that adults need to learn how to do grown up things, even ones they don't find fun.

It's different if they are coming to you for advice... it sounds like you are just doing it all for them. Like you said, at some point you won't be around, and then they will have to manage their own money... You may even reach a point in your life where they have to manage your money for you! 

It's a free forum with free advice, you don't need to take it, but don't get upset if you don't agree with it all.


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## RBull (Jan 20, 2013)

I think you're right Jargey3000. Having little interest or knowledge in investing doesn't necessarily indicate coddling. Lot of parents help children with other parts of their lives and visa versa. Ideally children pick up investing etc themselves at some point (soon) as the size of the accounts grows, and importance of saving/financial planning for the future is understand and embraced. 

I agree with what humblepie has posted as well. Stay with RBC for convenience, given the account sizes and many other options available. They have plenty to choose from outside of mawer. Let me know if you need more help since I can access info easily.


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## jargey3000 (Jan 25, 2011)

"Advice" (like that offered by humble, lost & only) -I'll take!
Mean-spirited & nasty "opinions"- I can do without.


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## humble_pie (Jun 7, 2009)

jargey around here, down in the country, they have a saying when other people are being impossible. "Pay them no mind." Do they have a saying like that in newfoundland? it would come in handy.

in most families, there's one who does the heavy financial lifting. CMF forum happens to have many heavy lifters as members. But think of the huge population of wives, husbands, other partners, girlfriends, boyfriends, sons, daughters, grandmothers, grandfathers, aunts, uncles & in-laws who are, in fact, walking alongside! they may be silent & invisible, but the fact is that the heavy lifters on here are usually planning for these invisible persons most of the time.

turning now to jargey's daughters' RRSP plans, imho they're looking good. Both plans are strong & robust, yet simple. The owner beneficiaries may not yet be of a mind to fully pay attention, but when they do sit down to study these RRSPs, both daughters will find them easy to understand & work with.


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## OhGreatGuru (May 24, 2009)

*None* put it rather rudely, but I agree with his advice. These girls are married adults. They have to learn to manage their own financial affairs. Given their ignorance, an RBC balanced mutual fund is probably where they should be. OP is making the same mistake that many amateur advisors do: "This is not what I would invest in, so I will advise them to change it based upon what I would do if it were my money." But it isn't your money, and their investor profile is not yours. So back off.

If they consult anyone it should be their husbands, not "Daddy". If they are all financial dodos, give them presents of Mutual Fund Investing for Canadians for Dummies, and/or Personal Finance for Canadians for Dummies for Christmas.


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## none (Jan 15, 2013)

OhGreatGuru said:


> *None* put it rather rudely, but I agree with his advice. These girls are married adults. They have to learn to manage their own financial affairs. Given their ignorance, an RBC balanced mutual fund is probably where they should be. OP is making the same mistake that many amateur advisors do: "This is not what I would invest in, so I will advise them to change it based upon what I would do if it were my money." But it isn't your money, and their investor profile is not yours. So back off.
> 
> If they consult anyone it should be their husbands, not "Daddy". If they are all financial dodos, give them presents of Mutual Fund Investing for Canadians for Dummies, and/or Personal Finance for Canadians for Dummies for Christmas.


Agreed. THis is in the same theme as what I wrote but much more eloquently put. Lesson learned.


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## Moneytoo (Mar 26, 2014)

OhGreatGuru said:


> OP is making the same mistake that many amateur advisors do: "This is not what I would invest in, so I will advise them to change it based upon what I would do if it were my money." But it isn't your money, and their investor profile is not yours. So back off.
> 
> If they consult anyone it should be their husbands, not "Daddy". *If they are all financial dodos, give them presents of Mutual Fund Investing for Canadians for Dummies, and/or Personal Finance for Canadians for Dummies for Christmas.*


Sorry, but this is just hilarious... lol



humble_pie said:


> it seems cruel to answer jargey's questions because the practice only eggs him on.
> 
> remember those pictures of rural volunteer fire brigages, how without fire trucks or hoses back in the day, they'd pass buckets of water hand-to-hand along a line of volunteers?
> 
> ...


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## OnlyMyOpinion (Sep 1, 2013)

none said:


> Agreed. THis is in the same theme as what I wrote but much more eloquently put. Lesson learned.


Its unfortunate that your earlier comment was so ill-formed and egregious that forum admin had to actually delete it (and my response to it). One of the good things about uncensored free speech is that allows everyone to know who the really unlikable idiots in the world are.


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## Moneytoo (Mar 26, 2014)

OnlyMyOpinion said:


> One of the good things about uncensored free speech is that allows everyone to know who the really unlikable idiots in the world are.


Savior Complex Anyone?


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## none (Jan 15, 2013)

OnlyMyOpinion said:


> Its unfortunate that your earlier comment was so ill-formed and egregious that forum admin had to actually delete it (and my response to it). One of the good things about uncensored free speech is that allows everyone to know who the really unlikable idiots in the world are.


Ill-informed no. Some people don't like hearing the truth. To each his own though - some people are just not cut out to be parents.


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