What to do with RRSP? Need advice
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I have contributed to RRSP in teh past. I have a decent chunk of money sitting there. Since we have moved back to India (non-resident), do I need to withdraw everything? I will be taxed big time, i think. Or can I withdraw $5k every year?
KM
What about the tax impact in India?
This income will also get added and taxed by India, no?
Regarding Canadian taxes, one way to offset the RRSP withdrawal taxes is to take an investment loan where the interest is roughly equal to the amount of RRSP withdrawal.
This will create an offsetting tax deduction.
And if your RRSP is in stocks that you don't want to sell right now, keep in mind that it is the un-registering that is important.
You don't have to sell the stocks/bonds, just unregister them and move into a non registered account.
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"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."
-- Rhett Butler in "Gone with the Wind"
That means I dont have to take it out now? I will be treated as a non-resident for tax purposes. I am a citizen though, not sure how it helps in this case. If I can keep it, I can take out some money whenever needed, with tax implications.
KM
Location: God's own country
Posted on: 12-11-11 06:23:13
Just take out $ 5000 out each year yarr!
With RRSP's interest at 3% or so In Canada, it makes no sense.
India is the way to go but then it will be your personal decision.
Peace
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I am a Gents and not a Ladies.
Location: Western Hemisphere
Posted on: 12-11-11 11:06:32
Quote:
Originally posted by tamilkuravan
With RRSP's interest at 3% or so In Canada, it makes no sense.
"Interest" depends on what the RSP is invested in. Asuming a number is wrong. Even with the crappy market, I have some of my funds within RSP that has earned 7% returns while heavily aggressive funds have negative 1or so %.
It all depends on the time the money has stayed invested and the nature of investment and returns (Cap gains, interest, dividends, etc).
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Dimple2001
Location: Western Hemisphere
Posted on: 12-11-11 13:36:19
Quote:
Originally posted by ashedfc
Inside an RRSP all these are considered same
So what you are saying is a money market/bond investment is same as an equity investment. How is that? Also, why wouldn't the range of time invested make a difference? Not sure I understand.
By the way, I am not considering same or different from a tax perspective, which I believe is what you might be refering to.
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Dimple2001
Location: Western Hemisphere
Posted on: 12-11-11 18:37:11
Quote:
Originally posted by KumarM
That means I dont have to take it out now? I will be treated as a non-resident for tax purposes. I am a citizen though, not sure how it helps in this case. If I can keep it, I can take out some money whenever needed, with tax implications.
KM
Citizenship has nothing to do with your tax status. Unlike the US, Cdn citizens can declare themselves non-resident if they don't live and maintain ties in Canada.
That being said, the choice of removing funds from RSP is entirely upto you. You will trigger taxes in Canada regardless if you take out.
Similarly, you can let funds sit in RSP until the mandatory age where you have to, like patrickm stated, de-register so that it's not inside RSP.
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Dimple2001
