Planning to Retire Abroad? Do Your Homework

News 3 minute read

Every year, Canadians retire abroad, which can provide the opportunity to see another part of the world, experience different cultures, and even enjoy a different climate. If this is on your horizon, it’s important to plan and do your research as there are lot of considerations before making the move.

We have gathered some tips ranging from tax implications and medical coverage to collecting your pension:

Tax: If you become a non-resident of Canada, this means you will also become a non-resident of Canada for tax purposes and will be subject to your new country’s tax laws and any tax treaty that Canada might have with that country. Depending on your situation, this will determine whether you need to file a tax return and any potential amount owing or refund you may have. It’s also important to remember that tax laws vary from country to country, and some countries have very different tax systems and laws compared to Canada. For more information on taxation for Canadians living abroad, visit the Government of Canada(opens in a new tab) website.
Immigration: Be sure to research immigration laws and processes for retirees in your chosen country as, like tax laws, they can vary significantly. If you are a Canadian citizen living in Canada, there are no residency requirements, and you can live wherever you choose while keeping your citizenship. If you have a Permanent Resident status, keep in mind that you must remain in Canada for 730 days (2 years) in any 5-year period(opens in a new tab) to maintain your Permanent Resident status.
Medical coverage and insured benefits: In general, if you travel outside Canada for longer than seven months, you will lose your Ontario Healthcare Insurance Plan (OHIP) coverage until you reestablish residency(opens in a new tab). It is therefore recommended that you obtain private travel health insurance to ensure you will be covered. Depending on where you live abroad, public healthcare may be available. If you have questions about insured benefits eligibility when retiring abroad, contact Canada Life at 1-800-874-5899 to discuss coverage.
Pensions: Living outside Canada may impact the way you receive your Canada Pension Plan (CPP), Old Age Security (OAS) and Public Service Pension Plan (PSPP) payments. Your eligibility for CPP and OAS will be impacted by how long you worked in Canada (CPP), resided in Canada (OAS) and whether there is a social security agreement between Canada and your chosen country. The Government of Canada(opens in a new tab) website can provide more details. Depending on where you live, you may not have the option to receive your PSPP payments in Canadian currency in a Canadian bank account and a foreign bank account may be required. If your PSPP payments will be made into a foreign bank account, they will be converted from Canadian dollars to local currency. Visit OPB.ca for more information. It is important to know that, subject to any tax treaty between Canada and your country of residence, all pension payments will be subject to Canadian income tax.
Other costs: When retiring abroad, you should consider other expenses, including relocation costs, whether you plan to rent or buy property, the local cost of living, education or care costs for any dependents, and factor in any trips you may need to make back to Canada. If you plan on owning property in Canada while abroad, be aware of all the costs associated with keeping your residence, like property tax, utility bills, insurance, mortgage payments and ongoing maintenance. You may need to hire a property manager.

Please note this article provides general information relevant to PSPP members, and OPB is not responsible for the content on external websites. This article is not to be relied on as financial, legal or tax advice. We recommend consulting with an immigration lawyer or other professional, who is qualified to provide advice about your intended destination before making any decisions about relocating outside of Canada, and with a tax specialist for advice on your personal tax situation.

If you would like more information on how retiring abroad may impact your PSPP payments, or your retirement planning please contact one of OPB's Client Service Advisors. You can do this by logging into e-services and using the Book my 1-on-1 feature.