I'm currently working in Canada and my employer offers a program where they match my RRSP contributions up to a certain percentage of my salary. Should I start contributing to RRSP even though I currently have no plans for retiring in Canada? For the sake of this question presume I will move out of the country permanently in five years.
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If your employer is matching your RRSP contributions you should definitely take advantage. It's like getting a 100% rate of return if they match it completely, even if there is no tax benefit.
Without that match the benefits are a bit more doubtful. You get the tax rebate back for your contributions, but you pay tax when you withdraw. If you are not resident when you withdraw you pay withholding tax. If you are paying a fairly high tax rate you may end up getting more in rebate than you pay in withholding. And in any case you get tax free growth while you are in Canada. So most people would come out slightly ahead.
Note that wherever you move to may not recognize RRSP as tax exempt. Only the US has a deal to recognize them as far as I know. On the other hand they will not charge you tax on money you withdraw from the RRSP.
DJClayworth
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