Retirement Account Planning
Most Americans moving to Canada have established significant levels of savings in different types of accounts. Our clients want to know what to do with these savings as they prepare to move to Canada.
Our experts have gained experience in advising clients on the optimal strategies in regards to their different retirement accounts. 401k, 403b, SIMPLE IRA, IRA, Roth IRA, these are an example of the different retirement savings plans that Americans may hold and require strategic planning for in order to optimize their situation. While Canada does offer plans with similar features, there are many considerations that require special attention and careful planning in order to avoid costly mistakes.
Canada’s Income Tax Act does allow the transfer of benefits of some US retirement accounts. Depending on the plan holder’s age and the rules governing the US plan, the plan can be collapsed and a lump sum transfer be made to a Canadian RRSP. Under the tax code, only funds that are individual contributions are eligible for transfer. Meaning, there are no provisions in the tax code to allow a tax deferral for employer contributed funds within a US plan. While the opportunity to transfer to an RRSP and continue deferral may exist, with a pending move to the higher taxed Canada, a liquidation strategy prior to departure may be an option to explore.
Our professionals analyze the facts specific to each client’s situation in order to recommend and implement a plan that will address these concerns and maximize available planning opportunities.