Not looking for investment advice here, just looking at tax implications so all you annuity-haters please cool your jets.
Status: Canadian living in US since 2001, green carded since 2004.
I have about $275K in Cdn RPP and $200K in Cdn RRSP which I have been duly reporting to the IRS via 8891 every year, deferring income. Now I am going to retire in 2015 and face the decision of how to take out the money. Leaving aside the financial benefits/liabilities of annuities, does it more tax sense to cash out them both completely and deal with the tax due then (25% of total $475K, correct?) or take the money as a stream (via annuity) and pay taxes annually.
Sorry for such a basic question, but I'm just trying to get my head around the implications and figure if the 15% vs. 25% rate comes into play here.
Cash-out RRSP/RPP vs. Annuity
Moderator: Mark T Serbinski CA CPA
Since you are retiring, I would be streaming it out.
You don't need to do all in an annuity to get the 15%. Take the RPP as a pension or move it to a LIRA or LIF and convert the RRSP into a RRIF.
The RPP funds will be taxed at 100% in US, and the RRSP would be taxed based on the gain since 2001.
The 15% will be better meshed with your US tax rate.
You don't need to do all in an annuity to get the 15%. Take the RPP as a pension or move it to a LIRA or LIF and convert the RRSP into a RRIF.
The RPP funds will be taxed at 100% in US, and the RRSP would be taxed based on the gain since 2001.
The 15% will be better meshed with your US tax rate.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 