It's Your Money  

What to think about if planning to retire abroad

Tips for retiring abroad

As the cost of living in Canada continues to rise, many Canadians are exploring the possibility of retiring abroad in order to maintain a comfortable and financially secure retirement.

However, retiring overseas requires careful financial planning to ensure a smooth transition and a worry-free retirement. For those considering this option, here are 10 financial planning tips to help you make informed decisions and enjoy your golden years to the fullest:

1. Determine your retirement budget—Before making any decisions about retiring abroad, it's essential to create a comprehensive retirement budget. Start by listing all your expected sources of income, including pensions, investments, and government benefits like the Canada Pension Plan (CPP) and Old Age Security (OAS). Then, estimate your anticipated expenses, such as housing, healthcare, transportation, and daily living costs in your chosen retirement destination. This budget will serve as your financial roadmap as you consider the additional points below.

2. Choose the right destination—Selecting the right retirement destination is crucial to your financial well-being. Take the time to research various countries, considering factors such as cost of living, healthcare quality, safety, and lifestyle. Keep in mind that some countries offer special retirement visas and incentives for foreign retirees, which can have a significant impact on your financial planning.

3. Understand currency exchange rates—Fluctuations in currency exchange rates can significantly affect your retirement income and expenses. It's essential to keep an eye on exchange rates and factor them into your budgeting. Consider opening a local bank account in your retirement destination to help reduce currency conversion fees and simplify financial transactions.

4. Review healthcare options—Access to quality healthcare is a critical consideration when retiring abroad. Research the healthcare system in your chosen destination and understand the costs involved. You may need to purchase international health insurance or investigate whether your Canadian insurance will cover you abroad. Ensure you have a plan for medical emergencies and routine healthcare needs.

5. Evaluate tax implications—Understanding the tax implications of retiring abroad is essential for effective financial planning. Consult a tax advisor who specializes in international taxation to help you navigate the complexities of reporting income, managing investments, and complying with both Canadian and foreign tax laws. Certain tax treaties may impact your tax liabilities in Canada and your host country.

6. Manage your Canadian investments—As a Canadian retiree abroad, you may have investments in Canada that require ongoing management. Consider whether you want to maintain or liquidate these assets. If you plan to keep investments, ensure you have a reliable method for managing them from your overseas location, such as online banking or working with a trusted financial planner.

7. Update your estate plan—Retiring abroad should prompt a review and update of your estate plan. Consult a lawyer familiar with international estate planning to ensure your will, power of attorney, and other legal documents comply with the laws of both Canada and your chosen retirement destination. This will help streamline the distribution of your assets and protect your loved ones in case of unforeseen events.

8. Keep track of financial regulations—Stay informed about financial regulations in both Canada and your retirement destination. Some countries have strict financial reporting requirements for foreign residents, and non-compliance can lead to penalties or legal issues. Familiarize yourself with any investment restrictions or requirements specific to your host country.

9. Establish a support network—Moving to a foreign country for retirement can be a significant life change. Establish a support network that includes local expatriates, community groups, and other retirees who have made a similar transition. They can provide valuable advice & guidance while you work out your budget and even friendship as you settle into your new life abroad.

10. Be flexible and open-minded—Finally, remain flexible and open-minded throughout the retirement planning process. Unexpected challenges may arise, and your initial plans may need adjustments. Embrace the adventure of retiring abroad while maintaining a firm grip on your financial goals and objectives.

Retiring abroad as a Canadian is an exciting opportunity to enjoy a comfortable retirement while stretching your retirement savings further. However, successful retirement planning for this endeavour requires careful consideration of financial, legal, and lifestyle factors.

By following these financial planning tips, you can embark on this new chapter with confidence and peace of mind, ensuring a fulfilling and financially secure retirement in your chosen destination.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.

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About the Author

Brett Millard is vice-president and a member of the executive leadership team at FP Canada, the national professional body for the financial planning industry. A not-for-profit organization, FP Canada works in the public interest to foster better financial health for all Canadians by leading the advancement of professional financial planning in Canada. 

He has worked in the financial advice industry for more than 15 years and is designated as a chartered investment manager (CIM) and is a certified financial planner (CFP).

He has written a weekly financial planning column since 2012 and provides his readers with easy to understand explanations of the complex financial challenges they face in every stage of life. Enhancing the financial literacy of Canadian consumers is a top priority for Brett and his ongoing efforts as a finance writer focus on that initiative. 

Please let Brett know if you have any topics you’d like him to cover in future columns ,or if you’d like a referral to a qualified CFP professional in your area, by emailing him at [email protected].


The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet does not warrant the contents.

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