ROTH IRA CANADA: Managing Your Accounts

Roth IRA Canada FAQs on moving and managing accounts

Ensuring you remain compliant while managing your Roth IRA can be overwhelming. If you live in or are relocating to Canada, you are often faced with the task of moving retirement accounts with you. You may have questions on how to move or manage your Roth IRA once in Canada.

First, be assured that you do not need to liquidate your Roth IRA when you move to Canada. While there are certain requirements to continue to keep your Roth IRA in Canada tax exempt, being cognizant of the tax law in each country can ensure that you do not “contaminate” the account and lose the tax-free growth for Canadian tax purposes. Our cross-border financial advisors can help manage these accounts, provide advice, and most importantly help you avoid any unnecessary tax consequences.

Frequently Asked Questions: Roth IRA Canada

  1. Can I move my Roth IRA to Canada?
  2. Manage your Roth IRA Canada
  3. Roth IRA Canada Treaty Elections
  4. Contributions and Conversions
  5. Summary of Roth IRA Canada

Can I move my Roth IRA to Canada?

Oftentimes, when clients move to Canada, their U.S. brokerage firm may not be able to manage their Roth IRA anymore. Luckily, with the help of a dedicated cross-border wealth management team, Plena Wealth Advisors can assist you in the movement of Roth IRA accounts. We can transfer in, hold, manage and invest your Roth IRA accounts without any adverse tax consequences to you.

Manage your Roth IRA Canada:

Your dedicated cross-border wealth management team, which consists of dual-licensed financial advisors, financial planners and tax specialists will help ensure your Roth IRA accounts are managed and invested in a manner that suits your needs. We advise on certain investments and rules in order to keep you compliant and avoid any investments that may cause you to pay unnecessary taxes. As dual-licensed financial advisors, we are licensed and regulated in both Canada and the U.S. and understand the complexities that arise from the different countries’ laws.

Roth IRA Canada Treaty Elections:

With complexities that arise from moving across the border, ensuring you are compliant from a Canadian and U.S. tax perspective is of utmost importance. In order to keep your Roth IRA tax exempt in Canada, you must file a one-time Treaty election in the first taxation year you are in Canada (latest by April 30 of the following year). We can help navigate this filing with you, provide cross-border tax planning advice and, in conjunction with your dedicated cross-border accountant, ensure complexities are simplified for you.

Contributions and conversions:

Contributions to your Roth IRA, while residing in Canada, have the potential to create a tax issue and contaminate the account. This poses a problem and could cause you to lose the tax-free growth for Canadian tax purposes. In order to avoid contaminating your Roth IRA, ensure any deposits happen prior to your move to Canada.

Converting an IRA to a Roth IRA could prove useful if you believe your future tax rates will be higher. Remember that this conversion is generally added to your income and reportable in the year of the conversion, and once made, you cannot revert to an IRA account.

For more FAQs on Roth IRAs, 401(k)s or traditional IRAs, check out our Cross-Border Retirement Planning page and Cross-Border Wealth Planning blog!

Looking for Roth IRA Help?

As specialists in cross-border wealth management and financial planning, your Plena Wealth Advisory team is here to help navigate these complexities with you. Whether you have questions or want help transferring, managing, and investing your Roth IRA or 401(k), we would be happy to help. Set up a discovery call today to discuss your specific situation to ensure you are making the right decisions.

Information in this article is from sources believed to be reliable; however, we cannot represent that it is accurate or complete. It is provided as a general source of information and should not be considered personal investment advice or solicitation to buy or sell securities. Raymond James advisors are not tax advisors and we recommend that clients seek independent advice from a professional advisor on tax-related matters. The views are those of Plena Wealth Advisors, and not necessarily those of Raymond James Ltd. Investors considering any investment should consult with their Investment Advisor to ensure that it is suitable for the investor’s circumstances and risk tolerance before making any investment decision. Raymond James Ltd. is a Member Canadian Investor Protection Fund.

Raymond James (USA) Ltd., member FINRA/SIPC. Raymond James (USA) Ltd. (RJLU) advisors may only conduct business with residents of the states and/or jurisdictions for which they are properly registered.