When searching for a place to retire, many Americans look south of the border. If you can adopt another language and feel at home with another culture, the savings that come with moving south can be a big help in retirement.
However, moving north can be a good option as well. While retirement in Canada isn’t the cheapest option, it can be a solid choice for Americans looking to stretch dollars and live in comfort. Here’s why you should consider Canada for retirement:
[See: 10 Places to Retire Overseas in 2017.]
Lower cost of living. The cost of living in Canada isn’t as low as what you see in developing countries. However, it’s still lower than in the United States. According to a Deutsche Bank survey of global prices, it costs 1.7 percent less to live in Canada.
Housing prices are also lower, as long as you stay out of the hot markets in Toronto and Vancouver. You can buy a home on Prince Edward Island for a little more than $100,000. There are also affordable rental prices in many areas of the country, especially as long as the exchange rate remains favorable for the greenback.
With a little planning, you will be able to find an inexpensive place to live. Plus, it’s possible for non-residents to buy property. You can buy property in Canada and rent it out when you aren’t living there. It works well if you decide you want to travel.
Health care is much cheaper. The Canadian health care system is much less expensive than similar services in the U.S. While it’s not perfect, with long wait times for non-essential services, it is affordable. Prescription drugs are also much cheaper in Canada. As a retiree, health care is going to be one of your biggest costs. Saving money on health care alone can be a big reason to retire in Canada.
However, in order to take advantage of Canada’s high quality health care at affordable prices, you need to be at least a permanent resident of Canada. You can apply for permanent resident status if you live in Canada for most of the year and can show that you are capable of supporting yourself. There’s generally no need to change citizenship if you manage to obtain permanent resident status.
[See: 10 Retirement Hot Spots in the U.S.]
Proximity to the United States. One of the benefits of living close to the United States is that you can easily get back for visits and your family can visit you. You can apply for Global Entry from the U.S. government to make it faster and easier to cross the border.
Infrastructure. Living in Canada gives you access to the technology and infrastructure you are used to in the United States. You will enjoy similar cell phone coverage, internet access and other perks you are used to having. The same benefits might not be available in less developed countries.
Freedom. Canada has consistently beat out the United States as one of the “freest” nations on earth. The Fraser Institute’s human freedom index puts Canada at number six, while the United States is 23rd. If you are looking for safety, and to have your rights respected, Canada is a good place to retire.
How to retire in Canada. To enjoy the many privileges of retirement in Canada, you need to become a permanent resident. Your education level, past job and current financial situation is considered with your application. It can be difficult to obtain this status, but it might help if you can get someone to sponsor you. In many cases, it makes sense to apply for permanent resident status before you retire so you can show that you have income.
If you don’t want to apply for permanent resident status, it’s important to understand the visa requirements. Americans who live in Canada for less than six months of the year don’t need a visa. You are a visitor. If you plan to travel outside Canada, this can be a good solution. You could live in Canada for almost six months and spend the rest of the year traveling.
It’s also possible to get a visa that allows you to stay in Canada for longer periods of time without becoming a permanent resident. You can apply for a super visa to stay for up to two years. This is easier if you have a child or grandchild who is a Canadian citizen or permanent resident.
[See: The Top Travel Destinations for Retirees.]
Don’t forget taxes. As long as you are a U.S. citizen, you will be required to pay taxes — no matter where you live. However, the U.S. government does allow for a foreign income exclusion. Make sure you pay attention to the regulations, and hire a good tax preparer or attorney to help you navigate the tax issues.
Canada can be a great place to spend your retirement summers and qualify for some financial perks that you might not get by remaining in the States. If you want to save money and have a great experience, Canada may be the place to retire.
Tom Drake is the founder of the award-winning Canadian Finance Blog.
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How to Retire in Canada originally appeared on usnews.com
