—Bill Buchanan, Georgetown, Ont.
Between RRSPs, TFSAs, RESPs and non-registered accounts, some families practically need a flow-chart to keep track of it all. If your investments are for the same purpose, say retirement, then it’s important to look at them all as a single portfolio. Once you’ve determined an asset allocation that suits your risk tolerance—what percentage of each type of investment you want to hold—you can look at your accounts as a whole and see if you’re matching your targets. MoneySense’s Dan Bortolotti has a spreadsheet on his Canadian Couch Potato blog that can help you see the big picture.
You don’t need to duplicate your holdings in every account; it’s simply a question of choosing the most tax-efficient account for each type of investment. For example, highly taxed bonds and GICs should go in either your RRSP or TFSA, says Diane Dekanic, a fee-only planner with Financial Health Management. Your U.S. investments should also go in your RRSP since it provides more favourable tax treatment for foreign dividends. Lightly taxed Canadian stocks should be the first choice for non-registered accounts.
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