Once a Canadian resident moves to the U.S., the most common tax advice is to leave any RRSP in place in Canada because attempting to convert to an IRA or otherwise withdraw the money has some horrible tax implications.

For a while, Canadians could not manage their RRSPs after moving to the U.S. due to SEC rules. However, this order was lifted in the year 2000. Hence Canadians living in the U.S. can still maintain their RRSP investments.

However, let's say that someone had an RRSP with a brokerage that charges excessive fees and otherwise steals around 2% of your money a year. As a resident of Canada, it would be possible to transfer to a self-directed RRSP or something similar without much issue. However, if the person is living in the United States, is it still possible to do this? Many companies in Canada don't seem to allow non-residents to open new RRSPs; but is there an exception for existing funds?

It seems silly that moving out of Canada would lock someone's funds with whatever price-gouger happens to hold them at the time of departure. However, based on my research so far, this seems to be the case. Does anyone have any evidence or experience to the contrary?

  • Is it specific for the US? What if you move to some other country? I'm asking because I want to understand why the "US" tag is there, it doesn't seem to be required... – littleadv Jun 17 '13 at 2:03
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    The SEC has specific rules for the treatment of Canadian RRSPs that other countries do not have. Please check out the links I already posted for further information. – Andrew Mao Jun 18 '13 at 14:45
  • Oh, so you're asking how the US will treat such a roll over? I thought you're asking about Canadian treatment of non-residents... – littleadv Jun 18 '13 at 15:47
  • Managing an RRSP as a non-resident has nothing to do with being in the US, except that being in the US means you have to pay less tax when you withdraw from the RRSP eventually. – Andrew Mao Jun 18 '13 at 17:56
  • There are also state regulators. Check with your bank if they can do business in your state. eg, TDDI can't in Virginia, Louisiana, and Nebraska. Here is a link to a question & answer page with some info. td.com/to-our-customers/tdhelps/… – brian Aug 22 '17 at 0:04

I had an RRSP account with a managed services account at a major Cdn bank that increased its fees to $125 a year per account. Because I could not trade any of my funds living in the US, it made no sense to throw away $500 a year for nothing (two accounts for me and two accounts for my wife - regular RRSP and locked in RRSP). I was able to move all my accounts to TD discount brokerage without any issue. I did this two years ago.

  • And no issue from Canadian tax authority? – JTP - Apologise to Monica May 8 '14 at 23:57
  • @JoeTaxpayer The CRA doesn't care about moving RRSPs from one bank to another by a transfer. It's only withdrawals that attract tax. – brian Aug 22 '17 at 0:02

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