RRSP: cash-out and move it to Japan?

[cocacola]

I have an RRSP back home in Canada. I am mid-40's.

I recently had a chat with a financial person at my Canadian bank (it's been over 10-years since I had someone take a look at my RRSP investments) and, after the talk, he sort of recommended that I move my RRSP funds to Japan.

This is because, since my children have not yet been registered as Canadian citizens (both of them were born in Japan), it might make inheritance of the RRSP quite complicated. Also, the funds that the RRSP are invested in are "meh" in his mind (the eMaxis Slim All Country's performance is leagues better). But since I am a non-resident of Canada, I cannot make any changes to these investments.

If I were to withdraw from my RRSP to prepare to move the funds to Japan, I would be facing:

1. Canada-side income tax
2. Japan-side capital gains tax

If I were to do the transfer to Japan, I would be withdrawing the maximum amount of the lowest-tiered income tax bracket (5% income tax) each year, until the RRSP runs dry. Each year that I do that, I would have to file non-resident income tax to the CRA, as well as file taxes in Japan for the capital gains (20.315%).

My question is: are iDeco and NISA the only tax-sheltered retirement plans available in Japan? The limits seem quite low compared to Canada. I am hoping that there is something else that I could consider to put my RRSP funds into, but I don't have high-hopes...

Transferring the RRSP funds to Japan is not something I am seriously looking into, considering the taxes I will have to pay both in Canada and Japan. I think the easiest thing to do would be to just leave the RRSP in Canada and register my kids with dual Canadian/Japanese citizenship. I am just looking into other options for the RRSP funds in Japan.

Thanks.

[Tsumitate Wrestler]

Leave the RRSP until retirement. Max out your Nisa and iDeco.

No reason to transfer it.

[cocacola]

Leave the RRSP until retirement. Max out your Nisa and iDeco.

No reason to transfer it.

Just as I was thinking.

Thanks, Tsumitate Wrestler.

[hafiz123]

I have an RRSP back home in Canada. I am mid-40's.

I recently had a chat with a financial person at my Canadian bank (it's been over 10-years since I had someone take a look at my RRSP investments) and, after the talk, he sort of recommended that I move my RRSP funds to Japan.

This is because, since my children have not yet been registered as Canadian citizens (both of them were born in Japan), it might make inheritance of the RRSP quite complicated. Also, the funds that the RRSP are invested in are "meh" in his mind (the eMaxis Slim All Country's performance is leagues better). But since I am a non-resident of Canada, I cannot make any changes to these investments.

If I were to withdraw from my RRSP to prepare to move the funds to Japan, I would be facing:

1. Canada-side income tax
2. Japan-side capital gains tax

If I were to do the transfer to Japan, I would be withdrawing the maximum amount of the lowest-tiered income tax bracket (5% income tax) each year, until the RRSP runs dry. Each year that I do that, I would have to file non-resident income tax to the CRA, as well as file taxes in Japan for the capital gains (20.315%).

My question is: are iDeco and NISA the only tax-sheltered retirement plans available in Japan? The limits seem quite low compared to Canada. I am hoping that there is something else that I could consider to put my RRSP funds into, but I don't have high-hopes...

Transferring the RRSP funds to Japan is not something I am seriously looking into, considering the taxes I will have to pay both in Canada and Japan. I think the easiest thing to do would be to just leave the RRSP in Canada and register my kids with dual Canadian/Japanese citizenship. I am just looking into other options for the RRSP funds in Japan.

Thanks.

It sounds like transferring your RRSP funds to Japan might be too costly with all the taxes involved. Registering your kids for dual citizenship and keeping the RRSP in Canada seems like a simpler option. As for tax-sheltered retirement plans in Japan, iDeco and NISA are the main ones, but their limits are indeed lower than in Canada. You might want to explore other investment options within Japan, but it’s best to consult a local financial advisor.

[Inaka4Life]

Just a heads up, your children don't need to be 'registered' to be considered Canadian citizens legally. If you were born in Canada (and haven't renounced your citizenship), your children automatically are Canadian citizens regardless of where they are born. It doesn't matter if you have gone through the process of obtaining a citizenship document.
On a related note, they can be denied entry into Canada if they don't have Canadian passports...

[Tsumitate Wrestler]

Just a heads up, your children don't need to be 'registered' to be considered Canadian citizens legally. If you were born in Canada (and haven't renounced your citizenship), your children automatically are Canadian citizens regardless of where they are born. It doesn't matter if you have gone through the process of obtaining a citizenship document.
On a related note, they can be denied entry into Canada if they don't have Canadian passports...

An important caveat, the parent must be a first-generation Canadian for this to be true.

Applying for Canadian citizenship certificates and passports is very worthwhile as it will give your children more options in the future.

[Inaka4Life]

An important caveat, the parent must be a first-generation Canadian for this to be true.

Applying for Canadian citizenship certificates and passports is very worthwhile as it will give your children more options in the future.

Right. Which I why I mentioned being born in Canada. I agree that it is worthwhile to get the certificates and passports (I've done so for my own children), but the point I was trying to make is that not getting the citizenship certificate doesn't mean that the children aren't currently recognized as legal Canadian citizens. They are legally Canadian citizens with or without the citizenship certificate.

[Tsumitate Wrestler]

An important caveat, the parent must be a first-generation Canadian for this to be true.

Applying for Canadian citizenship certificates and passports is very worthwhile as it will give your children more options in the future.

Right. Which I why I mentioned being born in Canada.

Naturalized citizens as well, not just those born in Canada!

.........

There are many nightmare stories of those who did little research and were turned away by JAL or ANA for not having a passport. (Although this is not limited to Canadians of course). If you do manage to arrive in your home country, they often cannot actually turn you away, but you will be sitting in an office for some hours as things get sorted.

The cost of obtaining a citizenship certificate has increased in recent years due to the need to have official notarized translations, however the embassy is quite helpful.

[cocacola]

Good advice and info about the Canadian citizenship. I will still power my way through to get the kids their due passports.... sometime, hopefully soon....

[Wilbur]

I've been thinking about this topic's headline a lot lately. And maybe I should be moving my RRSP to Japan and putting my funds in NISA to grow tax free. Here is what I have come up with pros and cons.

According to government of Canada website Non-resident of Canada have to pay 25% tax on RRSP withdrawals.
https://www.canada.ca/en/revenue-agency ... rawals.htm

I'm probably wrong about this and lots of times I'm wrong about things but wouldn't we Canadians living outside of Canada, non residents have to only pay the Canadian tax of 25 %? Japan's capital tax gains is less than this. And if this is true, it won't matter if I'm 40 yr or 65 yr and living in Japan, I'll be paying the 25%. Knowing this wouldn't it be better to move the funds to Japan?

Example: 1 transfer RRSP funds to Japan now
$10 000cdn taxed at 25%= $7500 then buy this equivalent in Japanese yen in NISA All country global index fund. Hopefully I can achieve 8% over 25 yrs= $51 363.56cdn I used this calculator

https://www.getsmarteraboutmoney.ca/cal ... alculator/

Example 2: Leave RRSP in Canada and cash out at 65 and pay 25% tax 25 yrs later

So, probably like CocaCola, I have a mutual fund that isn't very good plus high fees so over the 20 years I've already had it it has a 5% return rate. So, $10 000cdn at 5% for 20yrs= $33 863.55cdn and then I have to pay 25 % tax, so I'm left with $25 397.66cdn

Comparing these two examples 20 years later:

Example 1= $51 363.56

Example 2= $25 397.66

That is $25 397.66cdn in favour of cashing out the RRSP and moving it to Japan.

I think the big factor in this decision is that the RRSP is too high of fees and not high enough interest rate.

Pros:
- funds grow tax free in low fee global index fund in NISA
- I'm highly likely to retire in Japan and so funds will be in yen
- if I die, it will be easier for my wife to get these funds

Cons:
-if for what ever strange reason I move back to Canada one day, this wasn't a good idea
- having all my eggs in one basket ( no more assets in Cdn dollar)