Want to retire abroad? Here’s how to make that dream happen

Planning for retirement can feel like solving a complex puzzle, with each piece representing a decision that could impact your future. But here’s the good news: It’s never too late to take control. In this series, we aim to simplify the process, providing actionable insights to help you confidently manage your financial future.

When you think of retirement, do you picture yourself somewhere other than home? Whether you want to spend a few years travelling the world, ditch the Canadian winter for good or permanently move overseas – or on a cruise ship – it’s a dream for many to retire abroad.

Take Debbie Beckford, originally from Toronto, who moved to Sarasota, Fla. over 15 years ago for work, and eventually decided to retire there six years ago.

“Housing was very reasonable in Florida so we were able to afford a beautiful home in a lovely area close to the Gulf of Mexico,” she says of the decision. Beckford adds that activities she and her husband like to do – concerts, hockey games, for example – are also less expensive than at home in Canada.

On the flip side, she says health care is a big challenge – “much like having a second mortgage” – and that the political climate has “become more troubling over the years.” In fact, Beckford is planning to move back to Canada in the next year or so to be closer to family.

Beckford’s story illustrates the number one lesson in retiring abroad: Try to figure out if the reality will match the dream.

“If you’re going to consider retiring abroad, number one, travel there and see if you like it, the place and the culture,” says Hannah McVean, a Squamish, B.C.-based certified financial planner with Objective Financial Partners. “But then, you’ll also want to do some research.”

McVean points to several factors to consider. “There could be a potential cost of living differential between our country and the other,” she says. “So that could accelerate financial independence or not.”

She also recommends researching visas and whether it’s easy to move there.

“Some countries will try to lure expats there with incentives and easy residency options,” she says. “Is it the type of country where it’s easy to move to or do they make it difficult?”

Health care is also something to plan for. McVean says if you’re maintaining your residency in Canada, health care coverage while abroad depends on the province. In Ontario, for example, you can leave the country for six months at a time.

“Coverage abroad, like what [the province] will pay, that’s the tricky thing,” McVean says. She adds that having travel insurance in addition to provincial coverage is a good idea.

Also, consider your pensions.

“Your employer pension, you should check with your employer to see what the situation is,” McVean says. “But generally, if you’ve started your pension, there’s no problem and you’re entitled to your pension, but the administrative part, you might have to check with your pension plan to see what they need to change that.”

She says for the Canada Pension Plan and Old Age Security, there’s generally “no issue” with receiving them once you become a non-resident, although there are taxes withheld. For Old Age Security specifically, to apply as a non-resident you generally need 20 years of residency in Canada after the age of 18.

As for other investments you plan to use in retirement, McVean says to consider tax implications.

“If you are going to officially give up your residency at some point, your RRSPs will be okay and you can generally leave your TFSAs, but your non-registered accounts are going to be deemed disposed,” she says. “And that could mean that there is a tax consequence on all those unrealized capital gains.”

She explains it like this: “When you become a non-resident, the government says, whether you sell [your non-registered accounts] or not, you have to pay tax on all the gains on your tax return that year, whether you sold it or not.”

McVean adds that you should also speak to your financial institution about your plans before you leave. Some don’t work with non-residents, some require a phone call confirmation for trades, etc.

Then there’s your will. McVean suggests making sure your will is valid in your new country of residence and hiring a trust company to be your executor.

“Appointing your child as an executor would probably not be optimal because generally, you’d want them to be where you live,” she says.

Retiring abroad is doable, but it does require some preliminary research and planning.

“We have clients who’ve moved all over the world,” says McVean. “Many people plan to go back to Canada in old age and some people don’t ever plan to. In each of those situations, people should obtain independent tax advice because each person’s situation is unique.”