Should you withdraw your Canadian Registered Retirement Saving Plan (RRSP) funds when moving down to the States?
Consult with your Canadian financial institution on your available RRSP options prior to your move down to the United States. “The Border Guide” by Robert Keats is a useful starting resource – see article “U.S.-Canada Cross-Border Resources”.
For working individuals, keeping your existing RRSPs in a Canadian financial institution may be the easier route in the short and long term while living in the U.S. If you have a self-directed or traded RRSP account, then selling your current positions and transferring the funds into a regular RRSP account may also simplify things. The process of transferring funds from one RRSP account to another within the same Canadian financial institution is relatively quick (2-5 business days, depending on the bank), but transferring funds between two different institutions can take 2-4 weeks. Please check with your financial institution on their specifics.
Keep your RRSP account statement records, including the dates accounts were opened and/or closed. These details are needed when completing your Canadian income taxes, U.S. income taxes and U.S. Department of Treasury foreign bank account declaration forms (e.g. TDF 90.22-1).
For RRSP accounts that are newly open, currently active or recently closed, ensure that the bank has your new mailing address so end-of-year RRSP tax slips (t-slips) will be mailed to you accordingly. T-slips will be needed for your Canadian income tax return.
A global wealth advisor may also be able to outline your financial options, and clarify handling complicated wealth arrangements while living abroad. Seeking the services of a cross-border tax accountant may be helpful in completing your Canadian and U.S. income taxes, and ensuring the necessary foreign income declaration forms are completed in a timely manner while living abroad.
As always, please conduct your own thorough research as every situation is unique. The content mentioned is only a piece of our experience, and should only be used as a tidbit of information, not for financial advice.
All the best!