Converting RRSP to RIFF for US Resident
Moderator: Mark T Serbinski CA CPA
Converting RRSP to RIFF for US Resident
Basically, as a US resident, my RRSP is locked up. I cannot even sell a holding and keep the cash within the RRSP. That is considered "Switching Funds" which is non allowed for non-Canadian resident. Is that true?
It appears that the only access I have is to redeem the holdings and take the tax hit. I'm trying to lessen the tax hit by converting my RRSP to a RRIF to take advantage of the lower withholding tax rate - 15%. First of all, I was told I have to be physically in Canada in order to do the conversion. I was also told that the lower withholding tax do not apply to mutual fund RRSP which are stricter than "regular" RRSP. Are they true?
-many thx in advance
It appears that the only access I have is to redeem the holdings and take the tax hit. I'm trying to lessen the tax hit by converting my RRSP to a RRIF to take advantage of the lower withholding tax rate - 15%. First of all, I was told I have to be physically in Canada in order to do the conversion. I was also told that the lower withholding tax do not apply to mutual fund RRSP which are stricter than "regular" RRSP. Are they true?
-many thx in advance
Yoiu should be switching to a brokerag that is allowed to work with US customers. TD waterhouse in toronto is one.
TD waterhouse will accept new costomers living in US, and they will accept the transfers from your old account, and convert the account to a RRIF.
Then you can start withdrawing at 15% instead of 25% tax.
TD waterhouse will accept new costomers living in US, and they will accept the transfers from your old account, and convert the account to a RRIF.
Then you can start withdrawing at 15% instead of 25% tax.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Convert RSP to RRIF at any age? YES
@erotland,
Yes you can convert RSP to RRIF at any age. Your age would affect the payment schedule. Here is the link to calculate the annual minimum payment schedule based on your age.
http://www.tdcanadatrust.com/products-s ... al-cht.jsp
Or, like Nelsona mentioned - 10% of the fair market value of your account. Whichever is greater.
Yes you can convert RSP to RRIF at any age. Your age would affect the payment schedule. Here is the link to calculate the annual minimum payment schedule based on your age.
http://www.tdcanadatrust.com/products-s ... al-cht.jsp
Or, like Nelsona mentioned - 10% of the fair market value of your account. Whichever is greater.
in-house TD Mutual Fund RSP
Nelsona,
Thx for the prompt reply. That’s a real bumper! I closed all my accounts with TD Waterhouse just a few months ago. At the time, I didn't know about RRIF and the lower withholding tax. :(
I currently have one RSP account left with TD CanadaTrust. It's extremely frustrating. They're completely clueless. I spent two hours on the phone with an agent today. She insisted that I cannot do that. I’m actually shocked that she made up all those bogus reasons about the need to be physically in Canada to convert RSP to RRIF and mutual fund RSP is stricter than regular RSP!
I don’t have any stocks in my RSP with TD CanadaTrust, they’re all TD branded mutual funds. So, I’m not sure if I can transfer those in-house mutual funds to TD Waterhouse? Hm… Afterall, the agent might be right about mutual funds being stricter than “regular†RSP. (When she said regular RSP, I assume common stocks and 3rd party mutual funds.)
-LiveInUS
Thx for the prompt reply. That’s a real bumper! I closed all my accounts with TD Waterhouse just a few months ago. At the time, I didn't know about RRIF and the lower withholding tax. :(
I currently have one RSP account left with TD CanadaTrust. It's extremely frustrating. They're completely clueless. I spent two hours on the phone with an agent today. She insisted that I cannot do that. I’m actually shocked that she made up all those bogus reasons about the need to be physically in Canada to convert RSP to RRIF and mutual fund RSP is stricter than regular RSP!
I don’t have any stocks in my RSP with TD CanadaTrust, they’re all TD branded mutual funds. So, I’m not sure if I can transfer those in-house mutual funds to TD Waterhouse? Hm… Afterall, the agent might be right about mutual funds being stricter than “regular†RSP. (When she said regular RSP, I assume common stocks and 3rd party mutual funds.)
-LiveInUS
I also have TD RRSP in TD/CanTrust Mutual fund. I would like to know how to convert them to RRIF. If it has to be done in person, then it may be worth the effort to take a trip there. 25% vs 15% is a big discount.
After taking a hit in OVDI (some said IRS would impose 25% penalty on RRSP inside OVDI), this RRIF is a real relief -:)
After taking a hit in OVDI (some said IRS would impose 25% penalty on RRSP inside OVDI), this RRIF is a real relief -:)
Convert RSP to RRIF in Person???
Nelsona,
Did you manage to convert your RSP to RRIF without being in person? I just got off the phone with TD/Waterhouse. They also said that you have to be in person to sign a bunch of papers to convert a RSP to a RRIF. I'm not sure if the agent is just go along with me...
Would TD Waterhouse allow me to sell/redeem a mutual fund and keep it as cash in the RRIF w/o withdrawal? In other words, I'd only like to withdraw to the max allowed for the lower withholding tax rate, but would still like to liquidate certain asset esp. when the market is up.
-many, many thx in advance, LiveInUS
Did you manage to convert your RSP to RRIF without being in person? I just got off the phone with TD/Waterhouse. They also said that you have to be in person to sign a bunch of papers to convert a RSP to a RRIF. I'm not sure if the agent is just go along with me...
Would TD Waterhouse allow me to sell/redeem a mutual fund and keep it as cash in the RRIF w/o withdrawal? In other words, I'd only like to withdraw to the max allowed for the lower withholding tax rate, but would still like to liquidate certain asset esp. when the market is up.
-many, many thx in advance, LiveInUS
Folks,
Once you have a RRIF> you csan do the same as what you do in an RRSP, just you have to take out between the minimm based on your age and 10% to get the 15% withholding.
No, I neither had to originally open nor traqnsfer to RRIF in person. I had to get a copy of my passport page notarized. IF is lived near a TD bank in US or a TD Ameritrade office, I could have gone their and they would have faxed my info to Toronto, but I don't so notarized and fedexed it.
A TD bank mutula account is NOT a TD waterhouse self-directed RRSP, so you need to get it all under TD waterhouse
Once you have a RRIF> you csan do the same as what you do in an RRSP, just you have to take out between the minimm based on your age and 10% to get the 15% withholding.
No, I neither had to originally open nor traqnsfer to RRIF in person. I had to get a copy of my passport page notarized. IF is lived near a TD bank in US or a TD Ameritrade office, I could have gone their and they would have faxed my info to Toronto, but I don't so notarized and fedexed it.
A TD bank mutula account is NOT a TD waterhouse self-directed RRSP, so you need to get it all under TD waterhouse
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Nelsona, How did you open your RSP account w/ TD? I went to TDWaterhouse.ca to apply. It says non-resident is not allowed to open RSP. I went with it anyways. When I filled in an US address, I got the error message Bold in Red saying that “Application cannot proceed as you are a US resident. Please go to the TD Waterhouse, US site.†which obviously does not have any RSP application.
I called Waterhouse to get help and that's when I was told I need to do this in person. This is very frustrating. It's like 1 step fwd and 3 steps backward. I feel like I'm not going thru the right channels. Nelsona, you mention the Waterhouse in Toronto? Do you ask for a specific department or even person? I just called Waterhouse’s general 1800 Toronto #, and no one seems to know these things...
-many, many thx and greatly appreciated
I called Waterhouse to get help and that's when I was told I need to do this in person. This is very frustrating. It's like 1 step fwd and 3 steps backward. I feel like I'm not going thru the right channels. Nelsona, you mention the Waterhouse in Toronto? Do you ask for a specific department or even person? I just called Waterhouse’s general 1800 Toronto #, and no one seems to know these things...
-many, many thx and greatly appreciated
You need to SPEAK to someone. There are specific agents that are licensed to deal with US residents. All other employees are forbidden (just like your curent RRSP)
The number I call to speak to the US specialists is 1-800-268-8270 or 416-229-4274.
The other employees are kept out of the knowledge of this for leagl reasons.
The number I call to speak to the US specialists is 1-800-268-8270 or 416-229-4274.
The other employees are kept out of the knowledge of this for leagl reasons.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
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- Location: Seattle, WA
RRSP TD Waterhouse
I try never to disagree with nelsona, but I'd be very surprised if a non-resident could open an RRSP at TD Waterhouse or anywhere else, because a non-resident cannot make contributions to an RRSP.
That being said, when I left Canada in 2005 to move to the U.S., I left my RRSP with TD Waterhouse. Since then, they have been great. I can buy and sell within the RRSP, by speaking on the phone to a U.S. licensed registered rep in Canada. I can log into my account on the Internet but cannot trade except on the phone . (I do not own mutual funds, only securities.)
There are a small number of states, e.g. Virginia, that do not blue-sky the Canadian Registered Reps, but I lived in California and the District of Columbia and they blue-sky the Canadian Registered Reps with U.S. licenses.
Plus, if you have U.S. dollar paying securities in your RRSP, you have a small problem because Canadian law forces TD Waterhouse to convert the dividend or coupon to loonies when received. If you call TD Waterhouse, they will wash the dividend or coupon without going through the bid-offer spread and into the TD U.S. dollar money-market account.
I do not yet have to convert to RRIF or withdraw, so cannot speak to that from experience.
That being said, when I left Canada in 2005 to move to the U.S., I left my RRSP with TD Waterhouse. Since then, they have been great. I can buy and sell within the RRSP, by speaking on the phone to a U.S. licensed registered rep in Canada. I can log into my account on the Internet but cannot trade except on the phone . (I do not own mutual funds, only securities.)
There are a small number of states, e.g. Virginia, that do not blue-sky the Canadian Registered Reps, but I lived in California and the District of Columbia and they blue-sky the Canadian Registered Reps with U.S. licenses.
Plus, if you have U.S. dollar paying securities in your RRSP, you have a small problem because Canadian law forces TD Waterhouse to convert the dividend or coupon to loonies when received. If you call TD Waterhouse, they will wash the dividend or coupon without going through the bid-offer spread and into the TD U.S. dollar money-market account.
I do not yet have to convert to RRIF or withdraw, so cannot speak to that from experience.
Many of us have opened TDW accounts after leaving Canada ( i know dozens).
And technically, it is NOT forbidden to contribute to an RRSP while living in US, but it makes little sense after the transition year.
But, even if an institution does not wish to accept NEW funds, a transfer form an exoisting RRSP is not considered new funds.
And technically, it is NOT forbidden to contribute to an RRSP while living in US, but it makes little sense after the transition year.
But, even if an institution does not wish to accept NEW funds, a transfer form an exoisting RRSP is not considered new funds.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing