There is no set-up fee for most RRIFs, but you may pay other fees once you open a plan. These fees may include an annual administrative or trusteeTrustee A person or company that you appoint to manage the assets of a trust. You can name more than one trustee.+ read full definition fee, investmentInvestment An item of value you buy to get income or to grow in value.+ read full definition fees and fees for making changes to your RRIFRRIF See Registered Retirement Income Fund.+ read full definition.
Fees vary depending on:
- where you open your RRIF
- the type of RRIF you hold
- the amount of money in your RRIF
- how you investInvest To use money for the purpose of making more money by making an investment. Often involves risk.+ read full definition your money
- the level of management you want.
Fees reduce what you make on your investments. Fees vary depending on the type of RRIF and how you invest your savings. Shop around and make sure you understand all the fees that could apply. Find out if there are other investment optionsOptions An investment that gives you the right to buy or sell it at a set price by a set date. The buy right is termed a “call” option, and the sell right is termed a “put” option. You buy options on a stock exchange.+ read full definition with lower fees that may be suitable for you.
3 types of fees
1. Administrative or trustee fees
These fees cover the time and costs of looking after your accountAccount An agreement you make with a financial institution to handle your money. You can set up an account for depositing and withdrawing, earning interest, borrowing, investing, etc.+ read full definition, including activities like calculating your minimum amount each year and reporting to the government on your behalf. Fees are often waived on accounts that just hold GICs and Canada Savings Bonds.
2. Investment fees
These fees reduce what you make because they are deducted from the value of your investment. They may include:
- sales charges or commissionsCommissions What you pay to a broker or agent for their services. Often called a “sales commission”. For example, you pay a fee to someone who buys or sell stocks or real estate for you.+ read full definition for buying or selling investments like stocks and ETFs,
- annual management feeManagement fee A charge that you pay for having an investment professional manage an investment fund. The fee pays the managers for their time and skills. It may also cover things like communicating with investors and doing all the paperwork needed to run the fund.+ read full definition and operating expenses (called the management expense ratio or MER) for each mutual fund, ETF and segregated fund you hold, and
- fees for switching from one fund to another.
You may also have to pay a fee to your financial advisor if they charge you separately for their services.
3. Fees for making changes
You may also pay fees for making changes like:
- closing your RRIF,
- changing the amount or frequency of your scheduled withdrawals, and
- making a lump-sum withdrawal.
You can open as many RRIFs as you choose. But the more plans you have, the more you may have to pay in fees.
4 questions to ask
Are there fees to:
- Open a RRIF?
- Hold or manage your RRIF each year?
- Change your withdrawal amounts and frequency?
- Make a lump-sum withdrawal?