Retirement and savings terms are the part of a cross-border tax return where good intentions turn into surprises: an account that is tax-deferred in one country can be fully taxable, or heavily reported, in another. This glossary defines the main retirement and savings terms for the United States, Canada and India, gives the verified 2026 limits and flags the cross-border traps with links to the full guides.
Retirement and savings terms at a glance
| Concept | United States | Canada | India |
|---|---|---|---|
| Employer plan | 401(k), 403(b) | Registered pension plan, group RRSP | Employees' Provident Fund (EPF) |
| Individual tax-deferred | Traditional IRA | RRSP | National Pension System (NPS) |
| Tax-free growth | Roth IRA | TFSA | Public Provident Fund (PPF) |
| First home | Limited IRA exception | FHSA, Home Buyers' Plan | None comparable |
| Education savings | 529 plan | RESP | None comparable |
| Health savings | HSA | None comparable | None comparable |
| State pension | Social Security | CPP/QPP and OAS | Pension scheme under EPFO |
| 2026 annual limit | 401(k) $24,500; IRA $7,500 | RRSP $33,810; TFSA $7,000 | Set by rule and by wage, not a single cap |
Terms 0 to 9 and A to E
401(k) plan
A 401(k) is an employer retirement plan in which employees defer part of their pay. For 2026 the employee deferral limit is $24,500, with a $8,000 catch-up at age 50 or older and an $11,250 catch-up at ages 60 to 63. Many plans also offer a Roth 401(k). See cross-border retirement planning.
Equivalents: Canada, group RRSP or registered pension plan. India, EPF.
529 plan
A 529 plan is a state-sponsored education savings account whose growth is tax-free federally when used for qualifying education costs. Canada and India do not treat it as an education plan, so a family moving countries should plan for it. See three-country family planning.
Equivalents: Canada, RESP.
Annuity
An annuity converts a lump sum into regular payments for life or a fixed period. Each country has its own rules on which part of each payment is taxable, so check the treaty article that covers pensions and annuities when you receive payments from another country.
Beneficiary designation
Retirement accounts pass to the person named on the account form, overriding a will. Review designations after a marriage, divorce, birth or move between countries, because a non-spouse or non-resident beneficiary can face different tax results. Indian accounts use a nominee, and whether the nominee or the legal heirs are entitled varies by asset. See US-India estate and succession planning.
Canada Pension Plan (CPP) and Old Age Security (OAS)
CPP pays a pension based on your contributions, while OAS is a residence-based pension funded from general revenue. Both can matter to immigrants with partial histories. See CPP, OAS and pensions for immigrants.
Equivalents: U.S., Social Security. India, EPS.
Contribution room
Contribution room is how much you may add to a tax-advantaged account. In Canada it carries forward: unused RRSP room accumulates, TFSA room accrues each year once you are an adult resident, and your notice of assessment shows your RRSP room. U.S. limits apply year by year, and unused room does not carry forward.
Defined benefit and defined contribution plans
A defined benefit plan promises a formula-based pension; a defined contribution plan, such as a 401(k) or a money-purchase pension, pays whatever the contributions grow to. Canadian registered plans use annual limits such as $35,390 for money purchase plans in 2026.
Early withdrawal
Taking money out before the age or event a plan allows usually costs extra. The U.S. generally adds a 10 percent additional tax on early distributions from IRAs and 401(k) plans before age 59 and a half, subject to exceptions. Canada withholds tax at source on RRSP withdrawals and then taxes the full amount as income. India may apply TDS to provident fund withdrawals made too early, so check before you close an account. See cross-border retirement planning.
Employees' Provident Fund (EPF) and Employees' Pension Scheme (EPS)
EPF is India's mandatory provident fund for covered employees, built from employee and employer contributions, with part of the employer's share going to the EPS pension. For returning NRIs the tax treatment of interest and withdrawals depends on residency, so ask your CA. See NRI investments.
Equivalents: U.S., 401(k) plus Social Security. Canada, group RRSP plus CPP.
Employer match and vesting
Many U.S. employers match 401(k) deferrals, and the match may vest over several years. If you leave before you are fully vested you forfeit part of it, which matters for visa holders who may relocate. Canadian group RRSPs and pension plans can have similar vesting schedules.
Terms F to P
First Home Savings Account (FHSA)
The FHSA is a Canadian account with deductible contributions and tax-free qualifying withdrawals for a first home. Participation ends on December 31 of the earliest of the 15th anniversary of opening, the year you turn 71 or the year after your first qualifying withdrawal. See RRSP, TFSA, FHSA and RESP explained.
Foreign pension and account reporting
A U.S. person with an RRSP, TFSA, EPF or Indian bank account usually checks the FBAR and Form 8938, which cover foreign financial accounts above set thresholds. The IRS can assess a $10,000 penalty for not filing Form 8938. See reporting foreign retirement and savings.
Health Savings Account (HSA)
An HSA is a U.S. account for people covered by a high-deductible health plan, with deductible contributions, tax-free growth and tax-free medical withdrawals. From January 1, 2026, bronze and catastrophic marketplace plans are HSA-compatible. Canada and India generally do not recognize HSA benefits, so moving abroad can change the account's tax treatment.
Home Buyers' Plan (HBP)
The HBP lets Canadians withdraw RRSP funds for a first home and repay them over time. You must buy or build the home before October 1 of the year after the withdrawal. See RRSP, TFSA, FHSA and RESP explained.
Individual Retirement Account (IRA)
An IRA is a personal U.S. account. In 2026 the contribution limit is $7,500, plus $1,100 at age 50 or older. A traditional IRA may be deductible; a Roth IRA is funded with after-tax money and grows tax-free if the rules are met. Roth IRA eligibility phases out between $153,000 and $168,000 for single filers and between $242,000 and $252,000 for joint filers. See cross-border retirement planning.
Equivalents: Canada, RRSP or TFSA. India, NPS.
National Pension System (NPS)
The NPS is a government-regulated voluntary retirement scheme in India, with tax features that differ by regime. NRIs may be eligible under conditions, so ask your CA before opening or continuing one. See NRI investments.
NRE, NRO and FCNR accounts
NRE accounts hold foreign earnings that can be repatriated, NRO accounts hold income earned in India, and FCNR accounts hold foreign-currency fixed deposits. NRE interest is exempt for NRIs under Indian rules but is reportable and taxable for a U.S. or Canadian resident. See NRE, NRO and FCNR accounts.
Passive foreign investment company (PFIC)
A PFIC is a foreign corporation with mostly passive income or assets. Indian and Canadian mutual funds and ETFs are usually PFICs for U.S. taxpayers, which triggers Form 8621 and harsh default tax unless an election is made. See Form 8621 PFIC step by step and Canadian mutual funds and PFIC.
Public Provident Fund (PPF)
The PPF is a long-term Indian small-savings account with exempt interest. NRIs generally cannot open new accounts and existing ones follow specific rules, so confirm before relying on it. See NRI investments.
Terms R to Z
Registered Education Savings Plan (RESP)
An RESP grows tax-sheltered while saving for a child's education in Canada, and government grants may be added. For a U.S. person, it is a foreign account with its own reporting considerations. See RRSP, RRIF, TFSA and RESP in the U.S..
Registered Retirement Income Fund (RRIF)
An RRIF is what an RRSP becomes at the end of the year you turn 71. It requires a minimum annual withdrawal, which is taxable. See RRSP, TFSA, FHSA and RESP explained.
Registered Retirement Savings Plan (RRSP)
An RRSP is Canada's tax-deferred retirement account. Your 2026 limit is the lesser of 18 percent of prior-year earned income and the dollar limit of $33,810, plus unused room; contributions made in the first 60 days of 2027 can count for 2026. The U.S.-Canada treaty generally lets a U.S. taxpayer defer tax on RRSP growth until withdrawal, but the account still needs reporting. See RRSP, TFSA, FHSA and RESP explained.
Equivalents: U.S., traditional IRA and 401(k). India, NPS.
Required minimum distribution (RMD)
RMDs are withdrawals the U.S. requires from most tax-deferred accounts once you reach the age set by law. Roth IRAs have no RMDs during the owner's life. See US tax treatment of foreign retirement and savings.
Rollover
A rollover moves retirement money between accounts, normally within 60 days. On October 22, 2026, Treasury and the IRS announced the IRA Compliance Resolution System, effective May 1, 2027, which is set to take over requests to waive the 60-day rule from private letter rulings during 2027 and 2028. See US tax treatment of foreign retirement and savings.
Roth conversion
Converting a traditional IRA or 401(k) balance to a Roth account makes the converted amount taxable now in exchange for tax-free growth later. Cross-border families should model conversions before moving countries. See cross-border retirement planning.
Saver's Credit
The U.S. Saver's Credit rewards retirement contributions by lower earners. For 2026, the AGI limits are $40,250 for single filers, $60,375 for heads of household and $80,500 for joint filers.
SIMPLE IRA and SEP IRA
Small employers use these low-cost plans. The 2026 SIMPLE employee deferral limit is $17,000.
Social Security (retirement benefits)
Social Security pays retirement, disability and survivor benefits to workers with enough credits. Agreements with Canada and India can help combine periods of coverage. See US-Canada Social Security totalization.
Spousal RRSP
In a spousal RRSP, one spouse contributes and takes the deduction while the other owns the account, which can move taxable retirement income to the lower earner. Withdrawals soon after a contribution can be taxed back to the contributor. Check the account's U.S. reporting if either spouse is a U.S. person. See RRSP, TFSA, FHSA and RESP explained.
Tax-deferred, tax-free and taxable accounts
Tax-deferred accounts (a 401(k), traditional IRA or RRSP) give a deduction now and tax withdrawals later. Tax-free accounts (a Roth IRA or TFSA) take after-tax money and exempt qualified growth. Each country applies these labels only to its own accounts, so a foreign "tax-free" account can still be taxed under your residence country's rules.
Tax-Free Savings Account (TFSA)
A TFSA is Canada's tax-free account: growth and withdrawals are tax-free in Canada, and the 2026 annual limit is $7,000. The U.S. does not treat it as tax-free, and it may be handled as a foreign trust with extra reporting, so U.S. persons should get advice before contributing. See retirement and savings accounts compared.
Equivalents: U.S., Roth IRA (not a perfect match).
How we can help
From the Aurora, Illinois area we handle U.S. reporting of foreign retirement and savings accounts and coordinate with your Canadian CPA or Indian Chartered Accountant so the three treatments agree. See foreign account and asset reporting and relocation and immigration tax planning. Browse the full tax and compliance glossary for the other term sets.
Frequently asked questions
Can a U.S. resident contribute to a TFSA?
You can, but the U.S. does not recognize the tax-free status, and the reporting can be heavy. Talk to a cross-border adviser before you contribute.
What happens to my 401(k) if I move to Canada or India?
The account stays in the U.S., and the U.S. taxes withdrawals. Canada and India may also tax them, with treaty rules deciding relief. Plan withdrawals before you move.
Is an Indian provident fund balance reported to the IRS?
It depends on how the account is held and whether it is a reportable foreign financial account. Ask us to review the specific facts.
Which glossary lists penalties for unreported foreign accounts?
Official sources
- IRS: 401(k) limit increases to $24,500 for 2026, IRA limit to $7,500
- IRS: One Big Beautiful Bill provisions
- IRS: Retirement plan and IRA correction programs (IR-2026-126)
- CRA: MP, DB, RRSP, DPSP, TFSA limits and the YMPE
- CRA: Important dates for RRSPs, HBP, LLP, FHSAs and more
- IRS: Summary of FATCA reporting for U.S. taxpayers
This page summarizes public guidance in plain language. If anything here differs from the official source, the official source controls.
General information only. It is not tax, legal, accounting or immigration advice for your situation, and rules change; confirm the current rules with the official source or a licensed professional in the relevant country.