Withdraw RRSP vs LIRA

3graces · Post by **3graces** » Mon Mar 01, 2010 5:12 pm

Dual citizen Cda/USA living in Florida. Have RRSP and LIRA accts in Canada. Have been reporting on 8891 and claiming deferral under Revenue Procedure 2002-23. Ready to start monthly withdrawls to supplement our income. I'm 53 years of age. Would I be better to only withdraw from the RRSP? I get the feeling that the LIRA should be the last thing I touch. Really don't need it right now.

nelsona · Post by **nelsona** » Mon Mar 01, 2010 9:27 pm

Generally, a lira is "Locked-in" to a certain age, and can only be collased ahead of time, not drawn from periodically.

The advantage of a RIF however is 15% tax in canada rather than 25% from your RRSP. Consider converting RRSP into RRIF.

3graces · Post by **3graces** » Mon Mar 01, 2010 10:03 pm

Once I convert the RRSP to a RIF and start taking monthly withdrawls, I will have to pay 15% tax in Canada and also claim it as taxable income in the US and be taxed again?

nelsona · Post by **nelsona** » Tue Mar 02, 2010 9:11 am

You will have to pay 15% in canada. But you would have to pay 25% in canada on RRSP withdrawals.

You didn't think you were going to get the money tax-free did you?

As to US, as I have described DOZENS of times, the taxation of your RRSP/RRIF/LIRA in US will be based on its value wheh you arrived in US: you will be taxed on the growth since then.

3graces · Post by **3graces** » Tue Mar 02, 2010 9:41 am

:? No, I never expected to get the money tax free, but thanks for referring that I may be an idiot...

nelsona · Post by **nelsona** » Tue Mar 02, 2010 9:46 am

No problem

3graces · Post by **3graces** » Tue Mar 02, 2010 9:48 am

...introducing a great representative for the Serbinski accounting firm...

nelsona · Post by **nelsona** » Tue Mar 02, 2010 9:49 am

.... and I guess you meant "implying" rather than "referring".

I imply, you infer.

nelsona · Post by **nelsona** » Tue Mar 02, 2010 9:50 am

I have absolutely NOTHING to do with this firem.

Quite simply, they do not answer any questions on this board. They prefer you contact them directly.

nelsona · Post by **nelsona** » Tue Mar 02, 2010 9:56 am

... and before you get any hotter under the collar, the comnment was a joke, more ponted to the fact every one will want a piece of your retirement income when you get it, but not quite as bad as you imagined.

Obviously, by filing 8891, you were more proactive that tghe vast majority of RRSP-holders in US.

tokmik · Post by **tokmik** » Wed Mar 17, 2010 4:32 am

Is RRSP contribution amounts transferable between spouses?

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