Question by ajcolours: What are the tax implications for Canadians for 401k and ROTH IRA at retirement?
How do taxes work when Canadians who may have worked in the US withdraw money from their 401k or ROTH IRAs at retirement? Someone told me that a 401k can be withdrawn (and taxed in the US), but when the money is taken to Canada it will not be additionally taxed. However, the ROTH IRA would be taxed as new income in Canada. Is this true? If so, this defeats the whole purpose of the tax free growth provided by the ROTH IRA.

I am currently working in the US but am a Canadian Citizen and hence dont really know where i will be come retirement (40 years away) so I am not sure as to where I should invest. I am trying to collect details so I can make an informed decision.

Thanks
Mathew, I know how the taxes work if you remain in the US. I need to find how they work if you plan to take the money to Canada. Of course I dont know how things will work in 40 years, but how do they work now?

Best answer:

Answer by Mathew
For US taxes the 401 k disbursements will be taxed at your tax rate when you retire and the Roth disbursements will be tax free. Who knows what the Canadian tax rules will be in 40 years.

Give your answer to this question below!

Manisha Thakor : The Hard Times Guide to Retirement
The most common personal finance question I’m hearing from people of a surprising array of ages is this: “Is it possible for my golden years……

Read more on The Huffington Post

The government claimed that Social Security would come to us “as a right” and that “it would never be taxed” and that 1% would be “the most we would ever pay.” Since the government was wrong about all of those things regarding Social Security, why would anyone trust what the government says about Roth IRAs twenty to forty years from now?

Does anyone really believe that they won’t be taxing Roth IRAs before long? Our government, Democrat or Republican, is facing $170 trillion in unfunded liabilities this century. There is no way they can afford allowing people to receive tax-free payments. Why would anyone believe that this would be the case, in a country where everything is always taxed and laws are always changed?

After all, even the Constitution is ignored. McCain-Feingold restricts speech, Kelo restricts property rights, HCR violates Equal Protection clause, etc. Who in their right mind thinks something as small as a Roth IRA will survive?

Even the beloved little HSA will be scrapped under the House and Senate versions of Health Care Reform. How many people donated to those thinking they’d be around forever and they didn’t even last a few years!?

I’ve just graduated college and started my first full-time job a couple months ago. Lately I’ve been reading articles about Roth IRA’s and how young people should consider them because they can save a huge amount of money by the time they retire with the smallest amount of input (since they’re getting started earlier). I know I’m still young, but I want to set myself up for a comfortable future. I’m making $35k/year salary, but my company does not have a 401K plan (as of yet).

I would like to try putting away $250 a month in order to create a nest egg for when I retire (and maybe allow myself to retire a little earlier?). Is a Roth IRA the way to go, or is there something better I could do with my money to allow it to increase over the years? I don’t know much about this stuff and don’t even know where to start. I do know that IRAs have something to do with investments, which is risky and scares me a little…

Fees can take big bite out of retirement contributions
Making an annual contribution to a retirement plan? A recent study could give you pause. It says that more than half of the average person’s IRA contribution is being eaten away in fees.

Read more on Pocono Record

 Does anyone know something about it? Any references, or advice?

How do taxes work when Canadians who may have worked in the US withdraw money from their 401k or ROTH IRAs at retirement? Someone told me that a 401k can be withdrawn (and taxed in the US), but when the money is taken to Canada it will not be additionally taxed. However, the ROTH IRA would be taxed as new income in Canada. Is this true? If so, this defeats the whole purpose of the tax free growth provided by the ROTH IRA.

I am currently working in the US but am a Canadian Citizen and hence dont really know where i will be come retirement (40 years away) so I am not sure as to where I should invest. I am trying to collect details so I can make an informed decision.

Thanks
Mathew, I know how the taxes work if you remain in the US. I need to find how they work if you plan to take the money to Canada. Of course I dont know how things will work in 40 years, but how do they work now?

ect.) might be best for my personal situation? Could someone explain the plan that is more important and why this plan is best for me.

Is there something better than a IRA for retirement?

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