Hello,
1. No you are not required to move your money from your traditional 401K to another retirement account after you leave your current position.
2. Yes it is possible to move the money from your 401K account to an RRSP . Canadian Law will permit you to transfer the funds on a tax deferred basis. However you must follow several steps:
anadian tax law will permit you, as a resident living in Canada, to transfer a foreign pension plan, such as a 401(k) plan1, to an RRSP on a tax-deferred basis. To do so, certain conditions with respect to the payment being transferred must be met:
- The payment from the plan must be a lump-sum amount.
- The payment must relate to services rendered by you, your spouse,2 or your former spouse during the period in which you were a non-resident of Canada.
- The payment must be fully taxable in Canada and included in your income in the year of transfer.
- The amount transferred must be designated as a transfer on Schedule 7 of your Canadian income tax return in the year of transfer to obtain an offsetting deduction from the income inclusion.
3. If the above steps are followed it will not be a taxable event.
4. Yes, you do have the option on leaving the money in the account until retirement age at which point it will be included in your income.
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