Questions about locked-in RRSP

Question: I have a RRSP that is locked in with the RBC Securities. I am thinking of switching my investments to Investors Group. Will I be able to acquire a better return on my money with a private financial planner? I have been told by many that the banks will never invest my money in a way that I will get a good return. I am now 58 years old and my income has dropped drastically and I need to get the best return on my invested money because I do not have that much time left that I will be working.

I heard that it is better for middle to low income earners to cash in on their RRSP now because our pension will only be clawed back if I have a small nest egg to rely on. I should benefit from my RRSP money now so that I am healthy going into retirement instead of starving myself now and by the time I reach 65 I will have lost my health and therefore will not enjoy my retirement years if I end up ill and frail. — G.C.

Gordon’s answer: I certainly would not recommend that anyone starve themselves, for any reason. If your locked-in RRSP is all that stands between you and that fate, you may be able to get access to some of the money by pleading hardship. However, the les vary from one province to another on withdrawals from locked-in plans. Ask RBC for guidance or check with your provincial pension regulator for the situation where you live.

Can you get a better return with Investors Group? Maybe, but maybe not. The fact is that RBC has more mutual funds that I recommend than Investors Group can offer. I suggest you review your RBC account with your advisor and ask what he/she would suggest. A fund like RBC Monthly Income certainly sounds like a good fit here. Then ask the Investors Group rep for a similar recommendation and see what he/she comes up with. I’d be surprised if they can do better than a well-structured RBC portfolio.

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