RESPs The Actual Cashing Out

Yesterday we learned that I can actually be civil with someone when I am still raging mad, and that making appointments with folks in local bank branches, is not as easy as it might sound, today we learn just how easy the whole cashing in of an RESP from TD Mutual Funds, actually is.

Meet Mr. Mutual Funds

I finally got to my appointment at the local branch to access the funds in my kids’ RESPs, and was going in with a pretty nasty attitude, given the amount of time that it took to get this appointment. I met the young gentleman who was going to help me through the complicated world of Mutual Funds, and we sat down to start the Herculean task of getting money out of a TD Mutual Funds RESP.

First the gentleman went through his standard talk about the importance of being careful with your investments. I sat there quietly listening and then he finally asked what kind of investments I had. I explained that I was using a Passive Index Fund system where I didn’t have to closely monitor individual stocks, while still holding some money in GICs for safety purposes. The look on the gentleman’s face was priceless as he recognized that his previous talk and any further discussions about investing might not be needed, so we moved on.

I explained the amounts I wanted from each of my daughter’s RESPs, which should add up to mostly the amount I needed to pay off my Mastercard. I also explained that I had heard about a $5000 limit for taking money out for my middle daughter who was only in 1st year of her program.

The young gentleman got brownie points with me when he said, yes there is a limit however it is a limit in the amount of the CESG and Growth Money in the account (combined) and it is $5000, but the amount of the principle that was put in, has no such limit (I was happy to hear that).

I decided how much of the “growth portion” for each of the girls already, so that they didn’t incur any chances of getting hit with tax bills, and the rest would come out of the principle, so that was easy enough.

We then got down to the nitty gritty of picking how much of each Mutual Fund was to be cashed in, and I must admit I hadn’t thought about it much, but it seemed quite simple: Deplete any Money Market funds, and then pick the fund that looked the oddest in name and deplete that next (i.e. anything with the words Combined or Growth associated with them).

This unfortunate strategy trigged my Mutual Fund Expert to then have to go back over my “investing patterns” and make me fill out a Customer Investment Profile, to justify my loosey goosey method of choosing which Mutual Funds to Cash in. We had to answer many questions, and then I had to sign this to signify I understood (remember this for later).

Finally we got to actually cashing the funds in First daughter’s CESG and Growth:

• Choose which funds please.
• Which account will that go into?
• Sign this form signifying you have discussed the risk with our representative, and do not hold us liable for your investing blunders (OK, but something like that).
• Sign this form signifying the actual sale.

First Daughter’s Principle cash in:

• Choose which funds please.
• Which account will that go into?
• Sign this form signifying you have discussed the risk with our representative, and do not hold us liable for your investing blunders .
• Sign this form signifying the actual sale.

Second Daughter’s CESG and Growth cash in:

• Choose which funds please.
• Which account will that go into?
• Sign this form signifying you have discussed the risk with our representative, and do not hold us liable for your investing blunders.
• Sign this form signifying the actual sale.

Second Daughter’s Principle Cash in:

• Choose which funds please.
• Which account will that go into?
• Sign this form signifying you have discussed the risk with our representative, and do not hold us liable for your investing blunders.
• Sign this form signifying the actual sale.

And finally we are done, right? Well not quite yet, remember this is only going to happen in the next few days, so you won’t have the money tomorrow, so you had better pay your Mastercard bill some other way. Luckily I had already thought of that one, so I had already paid the bill with my Line of Credit (these funds would be transferred over to that LOC to pay it off).

Done now? Yes, we were done. I left after 60 minutes of my life had been burned doing something that should really only take 10 minutes, and within the next few days the money did finally arrive, and thus the saga (for now) is complete.

I have copies of TEN (10) separate documents that I had to sign to get these transactions to go through, which no doubt has been FAX’ed and then Scanned and put in storage somewhere. That is astounding!

Tomorrow I will publish a Lessons Learned post about what I have learned about the RESPs that I opened in specific and RESPs in general. These will not be exhaustive, and they will be mostly my opinion, so please treat them that way.

Oh and if you want to know more about RESPs have a look at The RESP Book: The Complete Guide to Registered Education Savings Plans for Canadians which Mike has sent me a copy to read over as well, I will hopefully have a review of it out very soon.

The Saga’s Other Stories

The other posts about this particular attempt at extricating money includes:

• RESP This Round Finally Ends (Prologue)
• RESPs and Rules
• RESP Withdrawals Redux, where I got more clarification, but not all.
• RESP The Old Switcheroo
• RESP Money to Get Money
• RESP Wrinkles