Converting Canadian defined contribution retirement plan

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charlesp
Posts: 2
Joined: Thu Sep 15, 2022 5:56 pm

Converting Canadian defined contribution retirement plan

Post by charlesp »

I am a dual Canadian-US citizen living in Canada, and I recently retired from my job at a Canadian university. I will very soon have to decide what to do with my employer-based defined contribution pension plan, e.g. a locked-in retirement account, a Prescribed Retirement Income Fund, etc. In making this decision, I would like to know if there is anything I should beware of vis-a-vis US taxes (e.g. anything that would trigger a tax bomb). Thanks!
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: Converting Canadian defined contribution retirement plan

Post by nelsona »

Nothing that I know of.

While living in Canada your pension monies will be taxed a maximum 15% in US at the time you take the income out of the pension realm (which will be covered by your Cdn tax). If you live in US, your Cdn pensions will be taxed at15% which will be credited on your US taxes. Whatever you do in terms of transferring/changing the monies into other forms of pension, will be a non-event US tax-wise.

If and when you create a pension account that YOU control (LIRA, etc), you will have FBAR and FATCA reporting requirements, but this doesn't give rise to any taxes.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
charlesp
Posts: 2
Joined: Thu Sep 15, 2022 5:56 pm

Re: Converting Canadian defined contribution retirement plan

Post by charlesp »

Great, thank you for the informative reply.
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