Segregated funds are no tax panacea + MORE Jun 6th

Here’s a round-up of news for Canadian investors this week.

Robinhood x WonderFi

Apotex

Cogeco

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Featured RRSP Accounts

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EQ Bank

Build your retirement savings with 1.50% interest, tax-deferred contributions and zero fees.

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Registered GIC rate

Earn a guaranteed 2.75% in your RRSP when you lock in for 1 year.

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Best RRSP rates

See our ranking of the best RRSP accounts and rates available in Canada.

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Ask a Planner
I attended a financial planning seminar and the presenter said you’re taxed so high on RRSPs when you die that your kids are only going to get half of it, which I already kind of knew. So, if you put it into these segregated funds, then you don’t pay tax. Should I be doing this? I am a 69-year-old widow, living in Ontario with $840,000 in RRIFs, and 136,000 in a TFSA. I have one daughter and I am a conservative investor spending about $60,000 a year.

—Pam

Hi Pam, I wonder if you misunderstood the presenter? You are correct: your daughter may lose close to half of the value of your registered retirement income fund (RRIF), but I don’t see reallocating to segregated funds as a winning strategy. This is the kind of thing you want to model out because there are a lot of moving parts here.  

When I hear a strategy like the one presented, I think, “What problem is the strategy trying to solve, and will it create other issues?” The obvious problem here is tax on death…