How to Transfer my IRA to Canada (or into an RRSP)?



Hi Phil

I moved to Canada in 2008 from Texas. I still have a sizable IRA in the US and in order to simplify my life I would like to move the account or funds up to Canada. Of course, I would prefer to pay little or no tax on the transaction. My current broker suggests that I move the IRA to an RRSP however she’s not terribly knowledgeable about how to accomplish the transfer.

If it would be easier to call you please let me know and I’ll give you a ring.





You’ll have a few options available to move the IRA to Canada. I’ll outline some of your options below:

  • Collapse the IRA completely and move the money to Canada – This option is relatively easy however very tax inefficient. Depending on how large the IRA is currently you’ll incur a fair amount of tax on the withdrawal of IRA funds. And considering you’ve mentioned the IRA is “sizable” this is likely not a great option for you currently.
  • “Roll” the IRA into a ROTH IRA – This is often a great strategy for those living in the US (without Canadian filings) if you anticipate your tax rate to be higher in the future. Unfortunately this option is not advisable as any contribution to a ROTH IRA as a Canadian resident (after moving to Canada) will attract additional Canadian tax.
  • Transfer the IRA in kind to a Canadian broker – We have some colleagues in Canada that can manage IRA accounts. That would allow you to maintain the IRA and have the accounts held in Canada. That being said you’ll likely then be dealing with 2 Canadian brokers.
  • Transfer the IRA to an RRSP – This is a great option for client that can qualify for the transfer. Generally speaking you’ll need to 2 things to be able to transfer your IRA to an RRSP. First the IRA must be from funds you’re contributed yourself and second, you’ll need to have enough “other Canadian source” income to efficiently ensure the transfer works. In very general terms the IRA to RRSP transfer works like this:
  1. You collapse your IRA account and pay 15% non-resident tax or the actual amount of tax payable for US residents or Citizens filing in Canada.
  2. Within 60 days of the year end you contribute these funds to your RRSP.
  3. You include the IRA distribution on your Canadian tax return with an offsetting deduction for the RRSP contribution (your broker will need to know it’s coming from an IRA as you will not have enough RRSP room for the transfer).
  4. You’ll take a foreign tax credit for the amount of the IRA inclusion. This will only work if you have enough tax created from other income on your tax return.

The process above may sounds convoluted, but it should be relatively straight forward. We can discuss the process over the phone or in the office if you have time to drop by.

From the options above the 3rd and 4th option are likely the most efficient. If you’re ok working with another broker we can help transfer the funds to Canada and you can withdraw the funds in the future as you tax rate falls.

If you do have enough other Canadian income moving the funds into your RRSP with your current broker may be an option. Note that we can do this transfer over a number of years in order to move the funds into an RRSP.

I would be glad to walk you through the process over the phone or in the office if you have time to drop by. Please email me at and we can setup a time to chat.




  1. this is completely different than what I was advised recently, or at least what options were suggested. My TD advisor suggested I withdraw the funds from my IRA and pay the tax and the penalty, around 25%. He said I would make up for the penalty and tax because of the exchange???

    • Although that’s definitely one option, it’s a terrible outcome. Depending on your Canadian tax rate you’ll pay around 25% overall. And depending on your current RRSP deduction limit you may be able to reduce the amount of overall tax paid on the withdrawal from the IRA.

      However even if you end up reducing your Canadian taxes payable you’ll still end up paying the 25% to the US, so no real savings will be accomplished.

      If the withdrawal hasn’t happened already please give me a call at 250-381-2400 and I’ll do my best to help flush out your options.

  2. Hello,
    I am a Canadian citizen living in Canada and have a 401k plan that I would like to transfer to an RRSP. I fully understand the steps involved and tax implications, however I have been unable to find a Financial institution who will set up the IRA for the initial rollover.

    Please let me know if you have any recommendations on an IRA provider for Canadian residents.
    Thank you

  3. Hi Phil

    My wife and I are planning a move to Canada next year, hopefully this will be a permanent move up north. We both have trad. IRAs , 401(k) investments and non-IRA investments. our current wealth manager is not sure whether they can continue to help while we are in Canada. She is looking into this currently.

    If she is not, is this something your firm helps with? It would make much more sense finding one firm that can handle both the investment and tax side if possible. We will also be receiving US social security in addition to our US investment income while in Canada if that makes any difference. We are Canadian citizens but left Canada very young so my CPP to claim when crossing.

    J and P.

  4. Dear Sir:
    I live in USA. I left Canada 30 Years ago after working there for 9 years. I am now a US citizen.

    RRSP a/c’s have grown because of 30 years. When I cash an RRSP account, Canada charges 25% tax. I
    have to report the proceeds on US tax return. USA charges another 15% tax. Foreign tax credit is
    minimal because my total US tax is small in retirement. In the end, I end up paying about 35-40%
    tax on RRSP. Is that the normal course? Can I file taxes in Canada to recover some of the taxes
    withheld? Is there any other way I can reduce my taxes?

    Please help. I will really appreciate it.

  5. Hello Phil,

    I am a canadian with money in an ira with in the US. I have been told I have to move it out of this company because I no longer have a US address. Ideally, I would like to transfer the ira into canada and into an rrsp without paying lots of tax. If this doesn’t work, I am looking for advice as to what company I could use where I could transfer my money in the US and continue as I have before. Someone mentioned Raymond James since they have a physical address in both the US and Canada, which is a requirement.


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