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Discussion Starter #1
Quick question on the mechanics of the minimum withdrawal of RRIF into TDDI. If an individual has fully invested in stocks or ETF holdings (assuming no distributions in these holdings), does that individual have to initiate the withdrawal manually? What if it's TD e-Series investments - would TDDI automatically calculate the minimum withdrawal and sell portions of the funds upon the minimum withdrawal date?
 

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From what I recall, you’re given the benefit of the doubt. The payment will Be made by you’ll fall into a negative cash balance. At that time, you’ll probably receive a letter advising of the shortfall and be instructed to sell securities.

not sure that’s what happens to ALL accounts, but I suspect if you have Assets in the tens of thousands, you’ll be given an opportunity to correct it yourself, before they take action.
 

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Discussion Starter #3
I'm more interested in the mechanics of, when the minimum withdrawal is taken, whether I have to sell the securities and transfer myself or whether TDDI does that for me.
 

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By law, the minimum annual withdrawal must be made, and as I understand it, registered accounts cannot have negative cash balances (no margin) for more than a very short period. If you refuse in your obligation to ensure sufficient cash is available for withdrawal by selling sufficient securities, I suspect the brokerage is free to choose which securities in the account they will sell to raise the cash and charge you 'agent assisted' rate in commissions. I suppose an alternative would be for the brokerage to transfer out 'in kind' sufficient securities to fund the required withdrawal.

You need to remember that you decided to to do DIY investing in a discount brokerage. It is thus up to you to take on the responsibilities required to manage such an account.
 

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Discussion Starter #6
The plan is for the individual not to have negative cash balance. I'm just not sure how TDDI would make that minimum withdrawal inside a self-directed discount brokerage account. I tried asking TD bank's "investment representative" who helped with setting up the TDDI account. Unsurprisingly, she wasn't sure how the minimum withdrawals work. I know with another person who owns TD index funds outside of the discount brokerage, TD would automatically sell off the minimum amount from the funds and transfer to the chequing account without much fuss. Guess I'll try my luck with someone at TDDI.
 

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The payment will be made and sent to your chequing account Whether the cash is available or not. If you don’t sell something soon, they will sell something for you.
 

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The plan is for the individual not to have negative cash balance. I'm just not sure how TDDI would make that minimum withdrawal inside a self-directed discount brokerage account. I tried asking TD bank's "investment representative" who helped with setting up the TDDI account. Unsurprisingly, she wasn't sure how the minimum withdrawals work. I know with another person who owns TD index funds outside of the discount brokerage, TD would automatically sell off the minimum amount from the funds and transfer to the chequing account without much fuss. Guess I'll try my luck with someone at TDDI.
I think you're encouraged to have the cash available for withdrawal by TDDI on the date you have set.

If you don't comply, then the brokerage is obliged to sell some security they decide on, rather than you deciding.

Is there some reason you don't want to have the cash ready for withdrawal? I may be missing the point.

ltr
 

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Is there some reason you don't want to have the cash ready for withdrawal? I may be missing the point.

ltr
+1

I don't get why someone, who has a DIY discount brokerage account, would even care to pursue an answer to that question. They presumably would want (insist on) managing that account for minimum annual withdrawals. TDDI is not paid to make those decisions for the investor. Indeed, by definition, discount brokerages are simply order takers and are not supposed to do anything other than what is required of them by their regulators.

If a client/customer refuses to take on that responsibility, then either the brokerage should charge for that service, or more appropriately advise the client to take their business elsewhere.

Anecdotally, I recall seeing a bit of this discussion in the past somewhere else, concerning RBCDI, which at the time, had a sequence (order) in which they sold securities to meet legislated minimum withdrawals. I also seem to recall they charged 'agent assisted' commissions to do it, e.g. $40 or $50 or whatever it is at the time.
 

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Discussion Starter #10
+1

I don't get why someone, who has a DIY discount brokerage account, would even care to pursue an answer to that question. They presumably would want (insist on) managing that account for minimum annual withdrawals. TDDI is not paid to make those decisions for the investor. Indeed, by definition, discount brokerages are simply order takers and are not supposed to do anything other than what is required of them by their regulators.

If a client/customer refuses to take on that responsibility, then either the brokerage should charge for that service, or more appropriately advise the client to take their business elsewhere.

Anecdotally, I recall seeing a bit of this discussion in the past somewhere else, concerning RBCDI, which at the time, had a sequence (order) in which they sold securities to meet legislated minimum withdrawals. I also seem to recall they charged 'agent assisted' commissions to do it, e.g. $40 or $50 or whatever it is at the time.
I think we're blowing the nature of the question to something more than it is. The person with the RRIF account is more than willing to follow the rules and do the minimum withdrawals. The question was more whether the process was:
a) automated with the discount brokerage selling the securities
b) the person needs to sell the securities themselves and have the cash available for the discount brokerage to withdraw by the agreed upon minimum withdrawal date
c) the person needs to do the transfer by the agreed upon withdrawal date manually (ie., initiate the transfer order, etc.)

Again, this is about understanding what the process is so that the person can take the proper actions, rather than not taking responsibility. Please don't jump to the wrong conclusion.
 

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Okay...... the answers are:
a) No
b) Yes
c) No, the discount brokerage makes the withdrawal based on the instructions you gave to the brokerage when you opened the RRIF (or subsequently changed).
 

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d) And I'll just add that if you want to withdraw cash through the year before the agreed upon date, you may do so and it will reduce all or part of the amount that will be withdrawn by the brokerage on the agreed up date.

ltr
 
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