Is it possible to transfer 401k and Roth IRA contributions made in US to Canadian RRSP account? If yes, are there any deductions / penalties involved or is it even worth doing it?

Appreciate your feedback. Thanks.

Yes you can transfer 401K and IRA to RRSP but

1. You will have to pay penalty in USA for early withdrawal
2. You will have to pay taxes in USA.
3. You can claim some of the taxes in Canada but in all you will lose lot of money.

I have decided to keep mine in USA only

kabutar is right. Although, I would not use the term transfer (because such thing does not exist). All you will be able to do is simply withdraw and close out the 401s and IRAs. What you do after withdrawal is upto you (put in RSP or spend or whatever).

Hence, you will pay a hefty penalty and a tax, making it unfavorable to withdraw. You may leave them as is.

If you have an existing IRA (not Roth IRA, but traditional IRA) account, you can rollover your 401 into that IRA so you have control over the management of the funds as opposed to sitting in ex-employer's managed account.

Or, if there are any institutions that allow you to open a "rollover IRA" account in the US while being a Cdn resident, you can do that and rollover the 401 into your account. Bear in mind, you cannot open an IRA account, but you may be able to open a rollover IRA account.

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Dimple2001

It's better to leave the 401k and IRA/Roth IRA accounts as it is. That's your money and with most providers, you can access and keep track of your accounts online. One thing you may want to do is to change your address to that of a friend or relative in the US. Vanguard for example will not allow any trading in your IRA accounts if you are not a US citizen/green-card holder and if you change your address to a Candian one.

Once you move to Canada and start earning income here, you can open an RRSP account on the basis of that income.

Just want to add...

It's important to note that as a non-US resident, you ***will not*** be able to open or contribute to IRA accounts. However, you may be able to open a "rollover IRA" account for the sole purpose of rolling over your 401 to a self account. This will however be an one time rollover....no contributions are possible after the rollover (unless you become a US tax resident in the future).

There are few institutions that allow Cdn residents who are not GC or USCs to have accounts with Cdn address. American Funds and Van Kampen Funds are two that I know and have been an account holder for years. These are mutual fund institutions.

But, if you are unable to find an alternative, like others have pointed out, leave them as is.

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Dimple2001

Thanks all for your response.

Please let me know if I leave 401k & Roth IRA contributions in US till maturity, do I have to file tax returns every year in US? Appreciate your reply.
Thanks.

Quote:

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Originally posted by gktaurus

Thanks all for your response.

Please let me know if I leave 401k & Roth IRA contributions in US till maturity, do I have to file tax returns every year in US? Appreciate your reply.
Thanks.

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Dimple2001