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What's the difference between a 401K and a Canadian RRSP?

We recently moved to United States from Canada due to work and my U.S. employer is offering a 401(k) plan. I have a Canadian RRSP that I contributed to but I have no idea how 401(k) plan can help me? What is the difference between 401(k) and RRSP? 

Both the 401k and the Canadian RRSP provide monetary savings for retirement.


  • Both are to invest and increase a retirement account
  • Both are tax-deferred
  • Both have annual contribution limits
  • Both provide access to a combination of investments


  • An RRSP account doesn’t penalize an account holder for early withdrawals for Canadian tax purposes, but in the US you could be taxed 10% for an early withdrawal on top of regular income tax
  • Unused RRSP contribution limits can carry over to next year, but a 401k does not allow rollover contributions


You can read more about each plan, contributions, and taxes here: 401k vs. Canadian RRSP

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