Canadian Retiring Abroad: What to Know (2024)

Upon retirement, not every Canadian chooses to stay in their current location. Some decide to retire abroad to a different part of the world. For many Canadians, retirement is a time to explore the world and get out of their work routine. What better way to do so than by retiring abroad? However, if you’re a Canadian retiring abroad, there are some additional implications to consider while planning your retirement. Residency, taxes and costs of living abroad are the three main things to consider, but there may be other factors depending on your lifestyle. Here is an overview of some of the most important factors to take into account.

Retiring abroad from Canada

If you are a Canadian retiring abroad, it is important to do your research before making the move. This includes how to retire abroad, researching the perfect destination, considering residency, figuring out a plan for medical care and acknowledging cultural differences. Let’s explore more below.

How to retire abroad

The key on how to retire abroad lies within planning. A big part of retirement is planning, but it becomes more intense when you factor in moving to a completely new location. To start, you’ll need to make sure you have the financial resources to live in another country. You might be able to live comfortably in Canada, but the same isn’t always true in a new location. Retirement savings, pensions, and benefits income may not be substantial enough to support your new lifestyle. Be sure to research the cost of living in your chosen destination.

Another important thing to consider is the local laws for non-citizens in your retirement destination. There may be limits to how long you can live there or purchasing real property as a non-citizen. The last thing you want is to unknowingly break the local laws as it could result in fines or even legal action.

Lastly, you’ll need to consider the logistics of your move. Start by determining what will happen to your current home. Some may choose to sell their home in Canada while others may keep it. If you choose to sell, you may need to figure out a plan for your possessions, such as furniture and clothing. From there, you can figure out how to move to your destination, which also has a lot of logistics. This includes moving large ticket items from one point to another. It is also helpful to create a budget or financial plan for your move. This includes both the one time costs, such as shipping of your personal items, and the ongoing costs, such as the expenses to maintain a home in Canada.

Moving to a new country has a lot of moving parts. It can help to speak to professionals for advice, such as immigration lawyers or moving experts, to better plan how to retire abroad.

Related Reading: When it comes to saving for retirement, how much is enough?

Canadian Retiring Abroad: Where to retire abroad

Here is a list of some of the most popular places Canadians retire to around the world:

1. Panama
2. Costa Rica
3. Mexico
4. Portugal
5. Ecuador
6. Columbia
7. France
8. Malta
9. Spain
10. Uruguay
11. Thailand
12. Ireland
13. Peru
14. Cambodia
15. Malaysia
16. Bali
17. Sri Lanka
18. Vietnam
19. Italy
20. Belize
21. Roatan
22. Dominican Republic
23. Croatia
24. Bolivia
25. Nicaragua

Related Reading: Business Owner Retirement Plan

Can I lose my Canadian citizenship if I live abroad?

As a Canadian citizen, you are free to travel and live wherever you choose. There are no residency requirements to keep your citizenship status. This freedom is unlike Permanent Residents, who must stay in Canada for 730 days (2 years) in any 5-year period to keep their PR status. In other words, Canadian citizens can move abroad for work or travel without risking the loss of citizenship. However, it is important to remember that Canadian citizens must always have a valid, up to date Canadian passport if they wish to return to Canada.

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Getting medical care as a Canadian retiring abroad

If you are travelling outside of Canada for an extended period of time, you may be wondering if you will still be covered by your provincial or territorial health plan. Each province and territory has different rules about how long you can be away from Canada and still be covered. Generally, if you are out of the country for less than six months, your health coverage will remain the same. If you are out of the country for more than six months, you may lose your coverage, depending on your province or territory. To find out more about how long you can be away from Canada and still be covered by your health plan, contact your province or territory. They will be able to provide you with all the details about your coverage while you are away.

When travelling outside of Canada, it is important to make sure you have adequate health insurance coverage. One way to do this is to purchase private travel health insurance. This type of insurance can provide you with the peace of mind knowing you will be covered in the event of an unforeseen medical emergency. Another option is to consider the local healthcare in your destination. They may have a public health system you can access while living there.

If you have a medical condition that requires specialized care, it’s important to research your options before travelling or moving to a new country. Many health insurance policies do not cover the cost of medical care outside of Canada. You may need to purchase separate insurance. Even if your policy does cover international medical care, it’s important to make sure the level of care you need is available. It’s also a good idea to familiarize yourself with the local healthcare system and know where the nearest hospital is located.

Cultural differences

Moving to a new country can be an exciting experience. However, it can also be quite shocking to encounter such a different culture. Even small things, like the way people dress or the food they eat, can be unfamiliar and confusing. It is important to remember there is no right or wrong culture, we all simply have a different approach to life. Be sure to prepare yourself for this sensation, better known as culture shock. With patience and an open mind, it is possible to learn a lot from other cultures and even embrace them.

Related Reading: How Our Personality Types Can Affect Attitudes Towards Risk and Decision Making

Retirement abroad taxes & finances

If you’re a Canadian retiring abroad, it’s important to understand the tax and financial implications. While there are many benefits to living in a foreign country, there may also be some unexpected costs associated with it. Here we’ll take a look at some of the things you need to consider when planning your retirement overseas.

Canadian retiring abroad and costs to expect

In this section, we’ll explore the various costs to expect while living abroad. You may incur some or all of these.

Costs to maintain your residence in Canada while living abroad

Canadian retirees living abroad need to be aware of the costs associated with maintaining their residence in Canada while they’re not there. This can include items such as paying property taxes, keeping up with home insurance, and paying utility bills. Additionally, you may need to hire someone to manage or check on your property while you’re away. Alternatively, a neighbor, friend or family member might be able to look after your house. If you have a mortgage or other debts in Canada, you will also need to continue making payments.

However, there can also be some financial benefits to living abroad as a Canadian retiree. For example, you may be able to take advantage of a lower cost of living, and you can also receive certain tax breaks on your Canadian income.

Costs of flying back and forth to see family or friends in Canada

One of the most significant expenses can be the cost of flights and accommodation when returning to Canada for visits with friends and family. While it may be tempting to book the cheapest flight possible, it’s important to remember that retirees often have limited mobility and may need assistance when travelling. As such, it’s worth paying a little extra for a flight with fewer stops and better connections.

Additionally, retirees should consider the cost of accommodation when visiting Canada. Staying with friends or family is often the most economical option, but retirees should also factor in the cost of hotels or short-term rentals if necessary.

Moving costs

Moving costs can be one of the biggest expenses when relocating to another country, especially if you’re retired and living on a fixed income. Fortunately, moving costs are a one-time occurrence. Make sure to get quotes from several different moving companies before making a decision, and compare their services to see which one best meets your needs. In addition, some people ship their personal possessions to their new home. This is another moving cost to consider, especially if you’re shipping large items like furniture or bundles of clothes.

Emergency costs for trips to Canada

Emergencies can happen, whether it’s related to you or friends and family back home. In these instances, you may need to make an emergency trip back to Canada. Make sure you have adequate health insurance coverage and set aside some money in case you need to make a last-minute trip home.

Other costs

Other costs to consider include accommodation, healthcare, and taxation.

Many retirees choose to rent instead of buying property while living abroad. It can be more affordable and gives them the flexibility to move if they need to. Make sure to factor in utility bills and any related fees when budgeting for your new home.

Healthcare costs can also be higher when living abroad. It’s important to research the quality of care in your potential new country and compare it to what you’re currently paying. You may also need to purchase health insurance if you don’t already have coverage.

Finally, remember tax laws vary from country to country. You’ll likely need to consult with a tax advisor to ensure you’re compliant with the law in your new home. In addition, you will be required to file a tax return in Canada as a non-resident.

Related Reading: Estate Planning in Canada: A Checklist

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Can you collect Canada Pension if you live outside of Canada?

If you are a Canadian citizen or a legal resident of Canada, you may be eligible to receive the Canada Pension Plan (CPP) payments even if you move outside of the country. However, your benefits will not be increased to account for any differences in cost of living that occur while you are living abroad. Plus your payments will still be subject to Canadian income tax.

In order to receive your CPP payments while living outside of Canada, you must notify Service Canada of your new address and provide them with proof of your identity. Once you have done so, your payments will be automatically deposited into your bank account on a monthly basis.

Can you collect OAS if you live outside of Canada?

Those who move outside of Canada can continue to receive their OAS pension, as long as they have been living in Canada for at least 20 years. The amount of the pension will not change, even if the cost of living is higher in their new country of residence. However, OAS pension payments are considered taxable income in Canada, so recipients will need to file a Canadian tax return in order to receive their benefits.

What happens if I stay out of Canada for more than 6 months?

Many Canadian retirees enjoy the snowbird lifestyle, spending the winter months in warmer climates and returning to Canada for the spring and summer. However, Canadian residents who are away for more than six months may find themselves classified as non-residents of Canada. This can have a number of implications, including the need to pay Part XIII tax on any Canadian-source income. Non-residents may also be required to file additional tax returns in the United States or other countries where they have income-earning assets. Be sure to consult a tax professional to understand what to expect. Outside of taxes, there are no implications to leaving Canada for over 6 months.

Financing real estate abroad

Canadian retirees who are looking to purchase real estate abroad may need to work with a foreign bank if they require a mortgage. This can be a risk, as foreign banks may not be subject to the same regulations as Canadian banks. However, Canadian retirees may be able to find financing options that offer favorable terms and conditions.

Working with a professional who is familiar with the real estate market in the country where you are looking to purchase property can help you find the best financing option for your needs. Canadian retirees should also be aware of the potential tax implications of owning property abroad.

Related Reading: The Important Role of Central Banks

Foreign taxes and residency

Canadians retiring abroad need to be aware of residency and related tax implications. In most cases, they will be considered residents of the new country and be subject to their taxation. This is true even if they only intend to live there for part of the year. Often taxes and residency go hand in hand. When you’re considered a resident of a certain country, tax tends to apply too. As a result, Canadian retirees need to research the tax laws of their potential new homes before making a final decision. Otherwise, they could end up with a nasty surprise come tax time.