RRSP for US resident - keep it or cash it in?

Hi David,

Good talking to you the other day. The questions I had sent on a couple of previous occasions follow:

I have two RSPs, one w/ RBC and one w/ CIBC. Both currently have my 'Canadian' (i.e. my mom's) address. I want to change them to my U.S. address, and RBC told me that offshore RSP holders can't transact in their RSPs other than to sell holdings. I'm fine with that.
The CIBC RSP, however, is worth less than $5,000, and I was thinking of closing it and transferring the holdings in kind, or the cash equivalent, to my RBC RSP. Presumably I should do that prior to putting through my address change. Given my being down here in the U.S., with my RSP reporting requirements, what do you think?

1] Is it "better" to just leave it as is; i.e. will a closure and transfer make for unnecessarily convoluted 2004 tax returns?
2] Would your fee thus be higher for me next year?
3] If I closed it and didn't transfer it to my other RSP and simply pulled the cash out and paid tax on it, would that also make for a convoluted (and expensive) 2004 tax season, i.e. would that be "worth" it?
4] In one (or more) of your emails to those of us on your distribution list, did you mention that you can make a case for U.S. residents to simply dissolve their RRSPs? Can further info be found @ centa.com?
Thanks as always,

It is not true that offshore RSP holders can't transact in their RSP's if you have it with the right broker. Shaun Rickerby is the manager of a TD Waterhouse branch in Kerrisdale in Vancouver. His phone number is (604) 482-5188 and his email is

shaun.rickerby@td.com or rickes2@tdbank.ca

Move both accounts to Shaun and deal with someone who "wants" to deal with US residents and has licenced himself to do so. The problem is that no one at the CIBC that I know of (there may be someone and they should contact me if there is) has licenced themselves to deal in the USA as Shaun has.

1)Whether you close it or move it, the paperwork has to be done. Likely slightly higher unless it all fits into two hours anyway.

3) same as (2) above. We have your old names in the system. Therefore, we have less to do than last year. If you change it, we have to put more in. However, you cannot or should not leave them where they are under the circumstances.

4) I can make an argument for anyone to cash in their RRSP's but it is an individual decision that involves deciding whether you want the government or a bank as your partner.

For instance, in any ten year period I know of, you would be better off today, borrowing $100,000 for an investment that increases in value whether it is Real Estate or a good mutual fund and then withdrawing enough out of an existing RRSP to pay the expenses.

This gets the money "out" of the RRSP and into your own hands.

Manulife has a fantastic Seg Fund system where they will loan you $50,000 to invest, guarantee the principal at 10 years and at a 4 % return, it is equal to an RRSP with the same investment. At 8%, return, which is less than the last ten years, the leveraged investment should double the return of an RRSP with the same amount of money going in.


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