If you’re emigrating from Canada, don’t collapse your RRSP too early

If you leave Canada and become a non-resident for tax purposes, it could benefit you to wait until you’re a non-resident before you collapse your RRSP and move the proceeds to wherever you’re moving.

Canada puts a withholding tax of just 25 per cent on the proceeds of an RRSP for non-residents. But if you want to wind up your RRSP while you’re still a resident of Canada, the proceeds would be taxed at your marginal tax rate.  The percentage would depend on where you are on the tax bracket, and where you live in the province.

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