When you envision your ideal retirement, the first image that comes to mind is probably not shivering in your winter parka as you shovel knee deep snowdrifts and pray for an early spring.
Retiring overseas is a dream of many Canadians who are looking for a more temperate climate, lower costs of living, and a new adventure. However, moving halfway across the world is a decision that should not be taken lightly.
Here are 6 things you should consider before deciding to retire abroad:
Legal residency and visa requirements
Each country has its own rules for foreigners seeking residency. Some offer retirement visas or long-term residency permits for retirees, often with specific financial or health criteria. Do your research and get the advice you need to understand your options and what they mean for your relationship to your home country, as well as to the country in which you want to live.
Cost of living
To get a realistic picture of the cost of living in your dream destination, research the local prices for things like housing, groceries, and healthcare. Living in a country with a lower cost of living can stretch your retirement savings. But keep in mind, it might not be worth it if the lifestyle offered doesn’t meet your expectations.
Healthcare
Experiencing a health issue in a foreign country can be scary. If something happens and you can’t make it back to Canada, will the local healthcare system be able to provide you with the quality of care you need? Will it be affordable? How will you navigate potential language barriers when communicating with healthcare providers?
Tax implications
If you think navigating tax laws at home can be complicated, you may be in for a surprise when you move to a foreign country. To understand how your retirement income and other assets will be taxed, both in Canada and in your new country of residence, be sure to consult a tax professional who specializes in expatriation.
Estate planning
If the worst happens and you pass away abroad, it can be a complex situation for your loved ones to navigate. While having a Canadian will can reduce some of these complications, you may want to consider making two wills – one for Canada and one for the country you’re currently living in – as each will have different legislation. The same may apply if you have a power of attorney. Do your research to confirm if moving outside of Canada will impact its validity or effectiveness. Finally, ask a trusted professional how different tax laws will affect your estate so that you can plan to minimize any tax liabilities.
Community
During your working years, you likely interacted with colleagues or clients regularly and, when you retire, you may be surprised by how isolated you feel socially. Moving to a new country can introduce even more obstacles to building meaningful relationships. Think about potential language barriers and differences in cultural norms and societal expectations. That’s not to say that building a social network abroad is impossible, but it might take more intentionality and creativity to connect with the people who will make you feel at home.
Carefully considering all of the factors, doing your research, and getting professional advice will enable you to make an informed decision and enjoy your retirement adventure.
For more information, check out Living abroad – A Canadian’s guide to working, studying, volunteering or retiring in a foreign country on the Government of Canada’s website.
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Live and Invest Overseas is one of our most trusted sources of information for living, retiring, and investing overseas, and they are excited to announce their latest book At Home Abroad – Retire Big on Little.
This how-to book by LIOS founder and CEO Kathleen Peddicord is a perfect resource not just for retirees, but for anyone who is thinking about creating a life for themselves in a new country.
At Home Abroad – Retire Big on Little includes:
- Dozens of real life stories from people of all ages and lifestyles who have made the move for themselves and their families (including fellow Canadians) to the 12 best places to call home: France, Portugal, Spain, Colombia, Belize, Greece, Montenegro, Panama, Thailand, Vietnam and Indonesia.
- ‘How to’ move overseas as a single, with children, senior-aged parents, working remotely and more.
- 12 steps to a bigger, better life outside of North America.
At Home Abroad – Retire Big on Little can be purchased on Amazon, and for a limited time, you can get a Kindle version for 99 cents.
David Popowich and Faisal Karmali are Investment Advisors with CIBC Wood Gundy in Calgary. The views of David Popowich and Faisal Karmali do not necessarily reflect those of CIBC World Markets Inc.
This information, including any opinion, is based on various sources believed to be reliable, but its accuracy cannot be guaranteed and is subject to change.
CIBC Private Wealth consists of services provided by CIBC and certain of its subsidiaries, including CIBC Wood Gundy, a division of CIBC World Markets Inc. Insurance services are available through CIBC Wood Gundy Financial Services Inc. In Quebec, insurance services are available through CIBC Wood Gundy Financial Services (Quebec) Inc. The CIBC logo and “CIBC Private Wealth” are trademarks of CIBC, used under license. “Wood Gundy” is a registered trademark of CIBC World Markets Inc.
Clients are advised to seek advice regarding their particular circumstances from their personal tax and legal advisors.
