Can a Canadian citizen living abroad make an RRSP contribution? (2024)

FAQs

Can I contribute to RRSP if I live outside Canada? ›

Canadian citizens who live and work in the United States may contribute to an RRSP if they have room based on limits set by the Canadian government each year.

Canadian citizens that have become non-residents can continue to hold RRSPs after leaving Canada.

Who is Eligible to Contribute to an RRSP? The simple answer is a Canadian resident for tax purposes who is 71 years or younger and making an income, up to the individual's annual contribution limit.

In general, the income from the RRSP is not taxable until the taxpayer begins receiving distributions. Previously, U.S. taxpayers had to report RRSP (and RRIF) ownership annually on Form 8891 — but several years ago, the Internal Revenue Service eliminated this requirement.

Expert Answer: The U.S. equivalent of an RRSP is known as an Individual Retirement Account (IRA). Unfortunately, RRSP assets cannot be rolled over to a U.S. IRA. If you withdraw funds from your RRSP, the entire amount of the withdrawal is subject to Canadian withholding tax.

You do not have a Canadian bank account with a local (Canadian) address as the official address. Note: You can keep a Canadian bank account and it can be really useful while living in the U.S. or overseas to have one! But change your address on this account to your new non-Canadian address.

If you hold a TFSA when you leave Canada, you can keep it and continue to benefit from the exemption from Canadian tax on investment income and withdrawals. However, you cannot contribute to your TFSA while you are a non-resident of Canada, and your contribution room will not increase.

You may be considered a deemed non-resident of Canada if you established residential ties in a country that Canada has a tax treaty with and you are considered a resident of that country, but you are otherwise a factual resident of Canada, meaning you maintain significant residential ties with Canada.

If you use RESP funds for non-educational purposes when leaving Canada, you may face taxation on the accumulated income, and government grants may need to be repaid. Is there a time limit for using RESP funds after leaving Canada? There is no specific time limit for using RESP funds after leaving Canada.

An individual can hold a variety of investments in their RRSP such as cash, GICs, ETFs, stocks, bonds, mutual funds, and REITs. As an American citizen or green card holder living in Canada, an investor isn't limited by what investments they can put into an RRSP.

How much does the average Canadian have in RRSP? ›

How much does the average Canadian have in an RRSP at retirement? While the average amount held in an RRSP is $144,613, for households aged 65 and up, that amount is $283,000 (including RRIFs).

Yes. The two main options are the E-2 and the EB-5 Visa. The E2 visa is a temporary visa which expires after a defined number of years. The EB-5 visa is a permanent visa which requires a more substantial investment and leads to a green card.

Form 8938 and RRSP (FATCA)

Form 8938 aka FATCA (Foreign Account Tax Compliance Act) is similar to the FBAR and requires US taxpayers who have ownership of foreign pension plans such as an RRSP to report the information to the IRS directly on Form 8938.

When you apply for benefits — You may have some Social Security credits in both the United States and Canada but not have enough to be eligible for benefits in one country or the other. The agreement makes it easier to qualify for benefits by letting you add together your Social Security credits in both countries.

RRSPs can be considered the Canadian equivalent of the American 401(k), and vice versa. Both are retirement plans designed to encourage savings with similar tax benefits.

However, you cannot contribute to your TFSA while you are a non-resident of Canada, and your contribution room will not increase. For more information, go to Tax-Free Savings Account (TFSA).

Canadians who live or work abroad or who travel a lot may still have to pay Canadian and provincial or territorial income taxes. Visit International and non-resident taxes for information about income tax requirements that may affect you.

Because CPP is a "member-contributed plan" it will always be yours, regardless of where you live in the world. If you paid in at least 1 CPP contribution, you are entitled to a benefit. OAS, on the other hand, comes out of the general tax revenues.

Non-Residents to Canada, including migrant workers are able to contribute to the pension plan and can later receive some benefits in their home country. An individual is considered a non-resident if they do not normally live in, and do not have ties residentially in Canada.