Case Study: How Jake and Melanie Managed Their IRA Before Moving from the USA to Canada

Background: Preparing to Move from the USA to Canada

When Jake and Melanie* came to us, they were preparing to retire and move from Vermont to Ontario. As dual citizens with family on both sides of the border, the move made sense personally, but financially, it raised some big questions.

Jake (62) had a large US-based IRA (over $1 million), and Melanie (55) was still earning income and contributing to a SEP IRA. They were concerned about how to manage their accounts when moving to Canada and whether they needed to convert their investments to Canadian dollars.

They weren’t sure what to do with Jake’s IRA and whether a Roth IRA conversion would make sense.

Our Approach

We started by reviewing their full financial picture with additional insights and expertise from a cross-border accountant.

Here’s what we covered with them:

No forced currency conversion

Their US-based IRA could stay in US dollars because it was already open, and they had yet to become Canadian tax residents. They had yet to move to Canada at this point.

IRA strategy

We discussed converting part of Jake’s IRA to a Roth IRA. Since Melanie was still working and in a relatively high US tax bracket, we decided it was better to wait until their combined taxable income was lower. That way, they could reduce taxes on future withdrawals.

Account structure

We recommended that they consult with their cross-border lawyer to consider closing their US LLC and US revocable trust, which they currently hold, prior to relocating to Canada. These entities are taxed differently in each country and maintaining them post-move could lead to unnecessary complexity and tax inefficiencies.

We also assisted them in managing their US IRAs even after becoming Canadian residents, and provided guidance on managing their non-registered investment accounts—whether they ultimately reside in Canada or the US.

Retirement plan

We ran the numbers to determine how much they’d need to retire comfortably in Canada, factoring in taxes, pensions, Social Security, and housing costs.

The Outcome

By planning ahead, Jake and Melanie avoided unnecessary tax events and kept their investments where they made the most sense. They now feel confident knowing their financial life is organized on both sides of the border.

They have a clear roadmap for retirement, know who to call when they have questions, and understand the Roth conversion strategy.

For clients with large IRAs and plans to move to Canada, the key is early planning. Ideally, you should start planning 2-3 years before you move, to avoid costly mistakes and make informed decisions.

Jake and Melanie are moving to Canada shortly, and all their finances are organized and

optimized for their new lives in Canada.

*The case studies and client examples presented on this website are for informational purposes only. Names and identifying details have been changed to protect client confidentiality. These examples are based on real scenarios but do not constitute financial advice. Individual circumstances vary, and you should consult a qualified financial advisor before making any financial decisions.