401k - Moving to Canada

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Topic Author
sneh.km
Posts: 15
Joined: Tue Nov 08, 2016 9:49 am

401k - Moving to Canada

Post by sneh.km »

Hi All,

I am posing this question for a friend who is moving permanently to Canada. She asked me for advice about moving their 401k to Canada and whether its a good idea. I thought best to pose the question here. She has about 10k in her 401k, so its not a huge amount but I think still cashing it all will be the worst choice in my opnion. I read a little bit about first having to convert the 401k to an IRA and then moving it to Canada. Is this possible? She will be quitting her job to move there and so she can move her money to an IRA without penalties here in US. This may be a stupid question, but could she still contribute to an IRA in US from Canada? Is there a Canadian equivalent of a 401k? Any ideas about penalties to move this money? Please let me know what you guys think! As always, all guidance is appreciated!! If there are any more questions please let me know and I will try to answer :sharebeer
Last edited by sneh.km on Wed Aug 30, 2017 3:32 pm, edited 1 time in total.
Topic Author
sneh.km
Posts: 15
Joined: Tue Nov 08, 2016 9:49 am

Re: 401k - Moving to Canada

Post by sneh.km »

The Canadian equivalent is an RRSP it looks like, but not sure if there are penalties for moving the money from US to this account.
Valuethinker
Posts: 41475
Joined: Fri May 11, 2007 11:07 am

Re: 401k - Moving to Canada

Post by Valuethinker »

sneh.km wrote: Wed Aug 30, 2017 3:24 pm Hi All,

I am posing this question for a friend who is moving permanently to Canada. She asked me for advice about moving their 401k to Canada and whether its a good idea. I thought best to pose the question here. She has about 10k in her 401k, so its not a huge amount but I think still cashing it all will be the worst choice in my opnion. I read a little bit about first having to convert the 401k to an IRA and then moving it to Canada. Is this possible? She will be quitting her job to move there and so she can move her money to an IRA without penalties here in US. This may be a stupid question, but could she still contribute to an IRA in US from Canada? Is there a Canadian equivalent of a 401k? Any ideas about penalties to move this money? Please let me know what you guys think! As always, all guidance is appreciated!! If there are any more questions please let me know and I will try to answer :sharebeer
I am having a brainfud. There is a sister forum of Canadians. Was the Financial webring. Some posters here post on both.

They are truly helpful.

This is all about tax. If she can she should roll to an ira and just leave it.

But Ccra ie Canadian irs will have a view. They may tax the money made in ira.

Yes in Canada there is Rrsp which is like a 401k and there is tfsa (?) Which is post tax money.

But Canadian fund market has far higher fees than USA. You absolutely do not want to move money from USA to Canada unless tax forces it.

Do not know if she can continue to contribute to us account while in Canada.

And tell her not to buy a house. Vancouver and Toronto have crazy housing bubbles. Worse than USA in 2006. They will blow up and crash.
robertalpert
Posts: 455
Joined: Wed Aug 22, 2007 10:09 pm

Re: 401k - Moving to Canada

Post by robertalpert »

Alternative would be to roll it over into an IRA (within a US based brokerage).
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Peculiar_Investor
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Re: 401k - Moving to Canada

Post by Peculiar_Investor »

sneh.km wrote: Wed Aug 30, 2017 3:25 pm The Canadian equivalent is an RRSP it looks like, but not sure if there are penalties for moving the money from US to this account.
You are correct the Canadian equivalent is the Registered Retirement Savings Plan - finiki, the Canadian financial wiki.
Valuethinker wrote: Wed Aug 30, 2017 4:58 pm There is a sister forum of Canadians. Was the Financial webring. Some posters here post on both.
It has been the Financial Wisdom Forum (FWF) for a number of years. I'm one of those Canadians who post on both forums, although my knowledge of cross border issues is very limited.

Citizenship is an important tax consideration for those moving between nations. Likely the Bogleheads, FWF has a wiki and the Cross-border and expatriate issues - finiki, the Canadian financial wiki might be helpful. Also the BH wiki article Taxation as a US person living abroad is an excellent resource on this topic.
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