Canada is a gorgeous country with so much to explore and see. It’s very similar to the US in terms of culture and food, however the scenery is so different and there’s so much to do.
If you’ve spent your whole life in the US working and saving for retirement, you may be thinking about retiring to another country so you can experience more of what this world has to offer.
Many Americans believe that retiring, or even just plain moving, to Canada is easy and there’s a special path Americans can take because the two countries are physically connected. This is not the case, though, so Americans should be prepared for an immigration process should they wish to retire to Canada.
Now, that being said – it’s not completely impossible for Americans to do this but they should just be prepared for completing the process and going through with the official paperwork to do so.
If you have travelled a bit to Canada and know that you want to retire there, maybe even just temporarily, you will need to know a few things and make sure you have financial security to go through with it. Here’s what you need to know and a guide to traveling with seniors.
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Visa Options
There are a number of visa options for Americans coming into Canada, depending on how long they want to stay or what their purpose for staying is.
Tourist Visa
As an American citizen, you are automatically given a tourist visa that is valid for up to 183 days at a time anytime you are granted entry to the country. This allows you to explore the country as you want to and you can legally stay in Canada for any amount of time up until that limit.
If you are just a tourist, you can still purchase property in Canada and open up a Canadian bank account. If you do not plan to live in Canada permanently during your retirement years, but you are going to go back and forth then this might be the right option for you.
For Americans who wish to just stay and use a tourist visa, they will not have access to Canadian health care but they also won’t be subject to Canadian taxes, either.
Super Visa
If you have children or grandchildren that live in Canada, and you plan to stay in Canada for extended periods of time you can apply for what is known as a super visa.
This kind of visa allows you to stay in Canada for up to 2 years at a time, and the visa itself is good for 10 years before you will need to reapply for it.
In order to qualify for a super visa, though, your child or grandchild must be a citizen or permanent resident of Canada and they have to supply you with a letter promising to help support you financially while you are in the country.
Permanent Residency
If you plan to stay in Canada for more than 183 days or you do not qualify for a super visa, you can explore the option of applying for permanent residency. If you are a permanent resident of Canada, you will have access to the Canadian healthcare system and other government-based programs. If you are a permanent resident, you could also (eventually) apply for citizenship, if this is the route you want to go.
It does get a little more difficult to become a permanent resident as you get older so this might not be an option for you.
If you want to go this route, you may want to talk to an immigration consultant or lawyer to see what your options are for becoming a permanent resident if you plan to spend most of your time in Canada once you’re retired.
Paying Taxes
When you move to Canada, it doesn’t mean you have to give up your US citizenship and you can definitely still receive your social security benefits however you may be subject to additional taxes if you earn a supplemental income while living in another country.
There is a treaty between the US and Canada regarding which country has taxing rights on different kinds of income. The qualifications may not be straight forward so you will likely need an accountant and/or lawyer to make sure you are paying the right income taxes and claiming additional income as you need to.
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The Cost of Living
Depending on which part of Canada you want to retire to, the cost of living may be more or less than you’re currently experiencing. Some parts of Canada are very affordable to live in, while other cities have an incredibly high cost of living.
Housing costs have been, generally, lower than what Americans experience and permanent residents to have access to the provincial healthcare plan of the province they live in.
However, many Americans are surprised to find that almost everything else is far more expensive than it is in the US. Food and gas, including the taxes on almost all items, are much more expensive than Americans are used to. This is something that Americans who are moving to Canada will need to account for in their budgeting.
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Healthcare
If you are only going to Canada for parts of the year (less than 183 days as mentioned), you probably will not have access to the Canadian universal healthcare system.
For this reason, it is often advised that Americans purchase international health insurance so that they are covered just in case they need to go to the hospital or an emergency happens.
Generally speaking, you cannot use Medicare or Medicaid in another country so you will want to make sure you have insurance before you leave and you’re properly covered in the event of an emergency.
If you do not qualify for insurance, or it’s just too much money for coverage, you will want to make sure you have a backup plan to take care of your health.
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Find a Professional
While Canada and the US are geographically close, it doesn’t mean that moving between these two countries is just that simple. Moving from the US to Canada can expose Americans to all kinds of tax and financial implications.
For this reason, it’s recommended you find a professional who understands the legal and financial implications of making this move for you. You will want to make sure it makes sense for you and that you won’t run into a huge tax bill come income tax season.
You will also want to make a plan so that you have the financial abilities to provide for yourself. If you have family in Canada, you may be able to stay with them to make housing a little more affordable but you will definitely need to make sure your finances are set for however you want to spend your retirement years.
When you meet with your financial advisor, go over all of your retirement accounts, what your estimated social security benefits will be and how much money you need every month/year for living in another country.
During this time, sit down with your insurance broker to talk about your options for purchasing international health insurance. Depending on where you’re going and for how long, you will want to make sure that you are covered for anything accidental that might happen and what you will do in the event of an emergency.
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The Bottom Line
Canada is a beautiful place to spend almost any amount of time in. The mountains and coast lines make it a country like no other on earth. The best way to make the most of retiring to Canada is ultimately to spend part of your time there and not move their permanently.
If you have children or grandchildren living there, the super visa option may be more appealing to you than a tourist visa and it will be much easier for you (and your spouse) to obtain.
With careful and purposeful financial planning, you can definitely have the financial means to spend part of your time in Canada and the other part in at home.
Everyone knows that Canada is the great white north, and winters there can be very cold (especially if you’re used to the climate of the southern US) so you actually may not want to spend all year there when you are not accustomed to a Canadian winter.
The summers in Canada, depending on which part you visit, are very similar to most of the US so the weather isn’t that much different – it’s just the winter you may need to get used to.
Additionally, many things in Canada are much more expensive to purchase (even with the currency conversion taken into account) and the provincial sales taxes can be a little bit of a shock to get used to at first.
If you have planned for the additional expenses and paying a little more for food and gas, retiring to Canada is a great way to spend part of your time and you will not be disappointed with the views and scenery.
