Can I have money in US and Canadian retirement plans at the same time?


Yes. But it’s a yes with caveats.

If you’re an American with an existing IRA who’s about to relocate to Canada, or a Canadian with an RRSP seeking to resettle in America, the good news is, whichever direction you’re headed, you’re not going to lose your retirement savings (or have to cross the border with your life savings taped to your body like poor old Pop Pop.) A treaty called the United States Income Tax Convention was created for these very issues. Should an American immigrating to Canada want to keep her existing US retirement plan investments, she is legally entitled to do so, as long as she files an election every year with her tax returns. (She may also elect to move her IRA into an RRSP, however this won’t work the other way around for those moving to America — the Internal Revenue Service does not allow RRSPs to be converted to IRAs.)

Since the Canada Revenue Agency only provides forms and published directives for Roth IRA plan owners, and not for IRAs and 401Ks, how exactly to file for this election will be a good question for your accountant. Likewise, an RRSP holder is welcome to keep her funds in her account even after moving to the US. There are some rather byzantine ways that the CRA and IRS will tax this money upon withdrawal, so it will absolutely make sense to consult with an accountant before the big move and some investment adjustments may be advisable. After relocating, remember that it is illegal to contribute to a Canadian or American retirement plan once residing outside the country.

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