i never implied it is tax free forever. i simply said you roll it over tax free.
in canada, and many other countries, you have to take your 401k equivalent (RRSP, etc) into income in the year you die. so if your 401k equivalent is 800k and you have no spouse to roll to, you have to realize 800k in income all at once and pay a 50%+ in taxes on it. in the US, you transfer to kids and they have to withdraw a measly amount every year, in many cases lower than the 401k’s rate of return and well below the giftor’s tax rate. this difference is insane.
^yep. yo btw i know a guy who has 200k in canada looking for advice, he is worried about that tax ur talking about. wtf would you tell him? also where should he deploy his cash? can Canadians invest in us easily? also whats the canadian stock market looking like in terms of multiples/growth? he mentioned that real estate returns are shit. not self funding. etc etc.
also what happens when you got a wife? how does that work out?
@Matt - OK. Just checking. You’re talking about “stretching” the IRA/401k. Yes, that works. Just continuing to roll over a 401k and never taking a withdrawal isn’t an option. That’s what I thought you were trying to say.
not much you can do. best you can do is withdraw aggressively between your retirement date and age 71 (assuming you have minimal income in these years). if you can get the number down to ~$200k by age 71, it’ll likely be taxed at a reasonable rate at death. since he has 200k now, and is probably much younger than 71, he will likely benefit from this strategy.
if you have a spouse, you can roll over tax-free. after that, the G man gets his dough.
i’ll refrain from providing specific investment recommendations on a public website. investing in the US is easy. canadian sector valuations are similar to the US.
any idea on what should i google to get more info on the taxing situattion for the retirement thing.
also do you Canadians invest in mostly canadian shit? cuz personally as an american i give zero shits about canada. was wondering if a canadians feels the same way about the US, or if you people invest in US just as much as canadian cos.
there is a tax advantage to investing in canadian companies in non-retirement accounts as canadian dividends are taxed at a much better rate than us dividends. inside an RRSP/TFSA, there is no difference. everybody has a home bias so people invest heavily in canadian companies inside and outside RRSPs/TFSAs.
pm me with specific questions and i’ll help guide you.