Retiring Abroad: Tips for retiring abroad

Tips for retiring abroad

Are you considering retiring outside of Canada?  Here are some tips you may wish to consider.

• Likely the most popular reason Canadians look to retire to a new country is climate.  The lure of sandy beaches, beautiful oceans and summer all year-round can be incredibly tempting for Canadians who may have spent a career commuting in the snowy winters. When considering your options for retirement location, invest the time to research the year-round climate and consider making an extended vacation to one or more of the possible retirement locations before making your decision.
• Cost of living is also a major factor to be given due thought.  Many Canadians choose to retire to a country where their money can stretch much further than it would here at home.  For example, International Living Magazine estimated, in its 2016 edition of The World’s Best Place to Retire, that a couple can retire comfortably in Nicaragua for around $1,200US/month.  There are plenty of tools available online to help you estimate cost of living in various countries.  Again, the best way to prepare yourself would be to plan a trip to a possible retirement location, instead of just booking a trip to a popular tourist destination within that country.  Here is a link to the International Living Magazine website.
• If you wish to become a non-resident of Canada for tax purposes, we recommend that you consult your accountant before doing so.  It is very important that you are aware of the rules for how much time you are allowed to spend in Canada, without being deemed a resident of Canada, once you have moved away.  It is also important that you do not leave significant ties to Canada and that you establish new ties in the country to which you are retiring.  Here is a link to the Canadian government website on this topic.                                 
• It is possible to receive your OAS and CPP payments in the local currency of the country to which you’ve relocated. This can help to simplify things somewhat, as you could then skip the step of having to convert Canadian dollars to the local currency every month.  Here is a link for more information.
• Related to the topic of receiving OAS and CPP payments is taxation of those benefits.  As a non-resident of Canada for tax purposes, your OAS and CPP payments might be subject to withholding tax.  Typically this tax is a flat 25%; however, many countries have tax treaties with Canada that may allow for a reduced tax rate if you submit a form NR5.  This is also true for RRIF income payments to non-residents of Canada.  Here is a link for more information on this topic, including a list of countries with tax treaties with Canada.