60(j) Transfer: Should You Transfer Your U.S. Qualified Plan to an RRSP?

Written by Carson Hamill CIM®, CRPC®, Associate Portfolio Manager and Assistant Branch Manager & Dean Moro BComm, CIM®, Associate Portfolio Manager

Under certain conditions, Canadian residents can cash out a foreign pension plan such as a 401(k) and transfer the proceeds to a Canadian Registered Retirement Savings Plan (RRSP). Referred to as a 60(j) transfer, this strategy can be useful when you have relocated from the United States and do not intend on returning and it does not result in double taxation. But it may not be the only option for your U.S. qualified plan. In this blog we will discuss the 60(j) transfer and the implications that need to be considered. Note that this strategy is generally not appropriate for U.S. citizens due to double taxation. The following discussion is for non- U.S. citizens.

What Is a 60 (j) Transfer
Foreign Withholding Tax & Early Withdrawal Penalties
Does the 60(j) Transfer Affect Your RRSP Contribution Room?
Can You Transfer an RRSP to an IRA?
Alternative Strategy – Rollover IRA for a Canadian Resident

What Is a 60(j) Transfer

When certain conditions have been met, Canadian tax residents can cash out a foreign pension and transfer the proceeds to a registered retirement savings plan (RRSP). The taxpayer reports the foreign pension as income. But if conditions are satisfied, the taxpayer may fully deduct the foreign pension by transferring it to a RRSP.

Foreign Withholding Tax and Early Withdrawal Penalties

A 60(j) transfer in NOT a tax-deferred rollover. If you withdraw from an IRA while a resident of Canada, you will face U.S. taxes. In addition, if you are under 59.5 years old, you may also incur an additional early withdrawal penalty.

Before you take any action, it's important to speak with a qualified cross-border Canadian tax professional who can guide you through this process to ensure the transfer is tax neutral. A 60(j) transfer can result in double taxation without proper consultation.

Does the 60(j) Transfer Affect Your RRSP Contribution Room?

If executed properly, the 60(j) pension transfer itself does not affect your Canadian RRSP contribution room.

Can You Transfer an RRSP to an IRA?

Regrettably, you cannot transfer RRSPs or LIRAs (Canadian retirement plans) into an IRA.

If you are planning to return to the United States, leaving the funds in a U.S. retirement account could be a better long-term strategy.

Alternative Strategy - Rollover IRA for a Canadian Resident

Consider engaging a dual licensed cross-border financial advisor who can manage U.S. retirement accounts. With the appropriate licensing, the advisor will be physically located in Canada, but also registered with the appropriate authorities in the United States, allowing them to manage and administer U.S. retirement accounts.

Snowbirds Wealth Management, through the Raymond James (USA) Ltd. platform, can open a Rollover IRA to receive your U.S. pension assets and continue to manage the account while you are a resident of Canada. At retirement, you will be able to draw on these assets in the same way as a regular IRA holder. Snowbirds Wealth Management will incorporate your IRA as well as your Canadian registered and non-registered assets in your overall financial plan, providing you with a comprehensive strategy that spans both sides of the border.

This solution allows you to maintain your retirement account in the United States and avoid potentially punitive tax consequences. This may be a more effective strategy than a tax and planning perspective and should be considered. As always, be sure to consult with an experienced cross-border Canadian tax advisor to determine the best solution for your circumstances.


While a 60(j) transfer to an RRSP can be an efficient strategy for some individuals, it's not a one-size-fits-all solution. The decision to execute a rollover should be based on a thorough understanding of your financial situation, goals, and the potential tax implications involved. Before you make any significant financial decisions, it's essential to consult with an experienced cross border financial advisor and a cross-border Canadian tax professional to ensure you are making the best choice for your circumstances.

Next Steps

If you’re planning on moving to Canada and need assistance with your investments, estate planning, and portfolio management, please call or email us at Snowbirds Wealth Management as we specialize in cross-border financial planning and wealth management. We work closely with experienced cross-border lawyers and accountants to ensure you have a team behind you.

About Snowbirds Wealth Management

Gerry Scott is a portfolio manager and founder of Snowbirds Wealth Management, an advisory firm focussed on the cross-border market. Together with Dean Moro and Carson Hamill, associate financial advisors and assistant branch manager with Snowbirds Wealth Management, they provide investment solutions for Americans living in Canada, and Canadians residing in the United States. Licensed in both Canada and the US, they provide tailored investment solutions to minimize the tax burden when moving assets across borders.

To schedule an introductory call, please click here.

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