Canadians dodging the Tax Man in Retirement

When making plans to retire, Canadians are not just thinking about when to retire but also where to retire. The strong Canadian dollar and the distressed housing market in the United States has Canadians looking south to retire. The National Association of Realtors in America says that Canadians make up 23% of foreign home purchases. That's up 114% and Canadians are now the largest foreign investors in real estate. And they don't see that trend ending any time soon.  But do your research before you buy. Find a realtor where you plan to purchase that specializes in Canadian investment in real estate.  Depending on where you purchase, you could be hit by higher mortgage rates, larger down payments and higher property taxes.

Taxes are another lure for Canadian retirees.
A 70 year old tax treaty allows Canadians that emigrate to the States a 15% tax rate. The savings to you can be huge. A million dollar retirement fund taxed at 15% as you withdraw your savings would cost $150,000 in taxes as compared to $500,000 you would pay in Canada. Again, make sure you do your research and contact an American tax accountant before you make your move.

And lastly, for your consideration, especially as you get older, is health care. Canadians enjoy free health care in Canada.  If you make the permanent move to another country, you lose that benefit.  Canadians are not eligible for Medic-aid(the American health care plan for seniors) and you would have to purchase health insurance. If you are over seventy, you could pay up to $10,000 a month. In summary, you could save on taxes, but pay for health care.

Review all your options before you make a permanent move to the United States, and remember you can always just escape winter and become a snowbird.