Author Topic: Moving from US to Canada, 401k advice needed  (Read 962 times)

campath

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Moving from US to Canada, 401k advice needed
« on: December 03, 2014, 02:43:47 PM »
I am currently working in the US and will be doing so till about June 2016. After that I plan to relocate permanently to Canada (chances of coming back to the US are slim to none). If I contribute to my 401k at my current saving rate from now till June 2016, I believe there will be about $55000 in it and $47000 in the Roth IRA. My earnings from Jan to June 2016 will almost completely be used to max out the 401k+Roth and the effective tax after all other deductions will be close to zero. From July 2016 to Dec 2016, I will be not be employed. From Jan 2017 onwards I expect to be in a 30% marginal tax bracket in Canada.

Please help me understand what is the best time to roll over the 401k assets to the Roth keeping in mind that I will be filing combined taxes for both countries from 2016 onwards. If from 2017 onwards, I have no income in the US, does it mean that I can rollover a standard deduction+personal exemption worth of funds to the Roth without any penalty or will my income in Canada prevent me from doing so?

To the best of my understanding, after 2017 I would pay taxes on the 401k withdrawl equal to my marginal tax rate in Canada. In my situation, would you rollover the funds to the Roth in 2016 when my income will be at its lowest for the near future or just rollover to a traditional IRA and not touch the funds till 59.5?

Thanks,
Campath
« Last Edit: December 03, 2014, 04:33:38 PM by campath »

campath

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Re: Moving from US to Canada, 401k advice needed
« Reply #1 on: December 05, 2014, 10:55:14 AM »
Bumping..