The good news is that you can still contribute to Group RRSPs and receive matching, as long as you:
- Have contribution room
- Are a Canadian resident for tax purposes
However, keep in mind that withdrawals or transfers as a non-resident of Canada may be subject to a Canadian non-resident withholding tax of 25%. Depending on your new country of residence, this rate may be lower depending on the tax rules of the new country. It’s important to look into the implications of timing, foreign tax credits and more to make sure you can avoid being taxed twice (i.e. once by Canada and then again in your new residence).
In the US, for example, there is no way to directly transfer an RRSP into an IRA (individual retirement account) such as a 401(K) and maintain the tax-deferred status. You would have to withdraw the funds from your RRSP and pay applicable taxes, then make a separate contribution to an IRA in the US. When it comes time to retire, you will have to pay taxes to withdraw those funds as income, which means you’re paying taxes on that money a second time.
Not sure if you’re a resident for tax purposes?
- Call CRA at 1-800-959-8281 and ask for the “International Division.”
- If you are a resident, double check what your contribution limit.
- Contribute up to that limit, including your employer matching amount.
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