My recent column on how to handle minimum withdrawals from registered retirement income funds (RRIFs) in the event of a market crash appeared to hit a nerve, with dozens of readers chiming in with their preferred strategies.
One that caught my eye was the suggestion that RRIF withdrawals be made by withdrawing securities in lieu of cash.
By moving securities from a RRIF account to a non-registered account, the reader suggested that you can satisfy the requirement for minimum withdrawals without giving up future income potential, all while skirting commissions on securities sales at some brokerages.
Opinion: What happens to my RRIF in a market crash?
There is something to be said for this if you don’t need the cash immediately, but don’t think of it as a get-out-of-jail-free card. You still have to pay taxes on the RRIF withdrawal based on the fair market value of the securities you’re transferring. And you are in fact giving up some future income potential: By moving assets out of a tax-sheltered account, you’re eating away at the power of tax-deferred compounding.
A transfer to your TFSA may be a better option if you have contribution room.
Another reader decided to take double the minimum withdrawal limit and pay more tax now, rather than risk saddling beneficiaries with a higher tax burden at death. As always, so much depends upon individual circumstances. If the math works and it helps to support your broader financial plan, more power to you.
I’ll be away for the next few weeks, but welcome your continued questions, comments and Alberta road trip recommendations.
In a recent column, you said that reinvested capital gains distributions for Vanguard Growth ETF Portfolio (VGRO) are listed in the distribution history. Some brokerages provide this information, but mine doesn’t give me any clues as to whether an ETF has paid one of these “phantom distributions.” Is there a generalized way of finding this data for any exchange-traded fund for any given year, regardless of which brokerage it is being held at?
For my own investments, I’ve been using ETF issuers’ websites for distribution information because I don’t hold that many different ETFs and the information tends to be clear and well-formatted.
In the case of Vanguard funds like VGRO – and with the caution that Vanguard could update its website at any time – it appears under “Distribution history” and “Annual distributions” beneath the "Prices and distribution" heading on the ETF’s information page.
But I understand that searching a bunch of different issuer and ETF information pages, each with its own site layouts and quirks, may not be everyone’s idea of a good time.
Opinion: Understanding ‘phantom’ ETF distributions
Fortunately, we have the Canadian Tax Breakdown Reporting Service (CTBS) from the Canadian Depository of Securities (CDS).
In its own words, the CTBS “allows issuers (or authorized agents) to publish their allocations and distributions made by mutual fund trusts, mutual fund corporations, split share corporations, and limited partnerships.”
With the caution once again that websites are subject to change, you can find the CTBS on the CDS website under Solutions - Tax Services - Tax Breakdown Services.
Unfortunately, while satisfying your search for a centralized source of information, the CTBS site isn’t a paragon of usability.
You can’t search by ETF ticker, but instead have to use the fund’s full name. The data for each fund is presented in a PDF file (or an Excel spreadsheet for the years before 2025), leaving you to scour lines of tiny text for the right number. And confusingly, you’ll have to click on “Display tax information for year 2025” and accept a disclaimer before you see a link to a page with the previous years’ data.
This is where the venerable AdjustedCostBase.ca comes to the rescue.
For the uninitiated, AdjustedCostBase.ca is a long-running website set up with the express purpose of helping investors calculate the adjusted cost base of their holdings and track capital gains. You can get most of its features with the free version, but if you own an array of different ETFs in non-registered accounts it’s worth buying an annual subscription.
One of the main subscription goodies is a feature that lets you directly import tax information for your ETFs, mutual funds and trusts, with data pulled from CDS and going back 20 years.
You might also take a look at MyACB.ca, a newer site that performs the same functions as AdjustedCostBase.ca but with a more modern interface.
A free account lets you experiment with importing distribution data for a single asset before deciding if you’d like to spring for a subscription.
E-mail your questions to agalbraith@globeandmail.com. I’m not able to respond personally to e-mails but I choose certain questions to answer in my column.