As a cross-border retiree, you may have numerous accounts on both sides of the border. In the U.S., you may have IRAs, Roths, and 401(k)s. In Canada, many of our clients have multiple RRSPs and LIRAs. Knowing where to start withdrawals in retirement can be daunting with this many types of accounts. In this video, we discuss which accounts you may want to start drawing from first to minimize taxes and maximize your income.
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Summary
Strategies for Cross-Border Retirement Accounts
Bryan, a certified financial planner, discussed strategies for U.S. residents with retirement accounts in both the U.S. and Canada. He emphasized starting withdrawals from Canadian accounts first to avoid complications and high taxes upon death, as Canadian accounts are subject to significant tax bills upon the account holder’s passing. Bryan also highlighted the importance of estate planning for Canadian accounts, noting that most U.S. estate plans do not account for Canadian assets.
Retirement Account Tax Strategies
Bryan explained the tax implications of U.S. and Canadian retirement accounts, noting that U.S. accounts offer more favorable taxation for heirs, allowing up to 10 years to withdraw inherited funds. He discussed strategies for Canadian retirees, including withdrawing all funds at once, converting RRSPs to RIFs for annual withdrawals, or supplementing with U.S. accounts. Bryan addressed concerns about the exchange rate, explaining that while waiting for a stronger Canadian dollar might seem appealing, the strategy often proves beneficial in the long run. He emphasized the importance of making informed decisions about which accounts to draw from and encouraged scheduling a consultation for personalized advice.