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Canadians Moving To US To Retire

Posted on February 19, 2014

It’s far from uncommon for Americans to retire abroad—the combination of exotic surroundings, lower rent and cheaper medical care can be irresistible for a retiree with wanderlust and an undernourished nest egg. But Yanks aren’t the only gray-haired migrants in North America: As Kathy Kristof reports this month for Financial Planning magazine, many Canadians are exploring the possibility of retiring in the U.S., drawn mostly by a tax code that treats them more gently than Canada’s.

Nobody is certain exactly how many Canadians live in the U.S., though an estimated one million people hold dual Canada-U.S. citizenship. Canadians of all ages have certainly shown a preference for Florida’s beaches over, say, Newfoundland’s: According to an accounting firm cited by Toronto’s Globe and Mail newspaper, Canadian buyers have been involved in as many as 30% of Florida real estate purchases in the years since the housing crash.

But the bigger draw for someone of retirement age is the way that withdrawals from a Canadian retirement account are treated when the assets are moved to the U.S. Unlike with an American citizen’s home-grown 401(k)s and IRAs, the Internal Revenue Service doesn’t tax withdrawals of principal from an imported Canadian retirement account. “If Uncle Sam didn’t give you a tax deduction for your contributions,” Kristof explains, “the U.S. government doesn’t expect you to pay tax on the principal.”

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14 thoughts on “Canadians Moving To US To Retire

  1. The weather might be the only reason remaining for folks to come here. However, with the increasing cold (brought on, no doubt, by "Global Warming") that may not be the case much longer.

  2. Luigi Clamatti says:

    It’s true that most Canadians have been lobotomized by their corrupt government but to move to the U.S. police state is a universe of stupidity beyond this!

    And the IRS being less oppressive than CRA is a false tale indeed, a veritable fairy tale.

    Whatever moron wrkte this piece of fluff flat-out lied or is a certifiable imbecile.

  3. I have had the feeling for a long time that if people leave the United States then they forfeit their rights to Social Security or other benefits of the country they deserted. It if important that they spend the money here, not in some foreign country, for the benefit of all Americans.

  4. Yeah, and as retirees they can sign up for Social Security and receive the minimum (since they didn't pay into the system) and get Medicare services for free as well (since it's not rationed, yet, as it is in Canada). The tax advantage alone wouldn't be worth it for most retirees, but a retired couple could rake in the dough!!

  5. Why should people be denied their retirement benefits due to their place of residence in retirement? Nobody asked the government to remove 7.5% of a man’s earnings during his working years. It was done anyway but with the promise of having an income in retirement. Why would you reduce people to serfdom bu demanding where they should live? In a truly free trade system, this whole social security system should be privatized entirely.

  6. Met plenty of expats down in Mexico who were happily collecting their SS retirement.

    I think Mexico is a sweeter deal for Canadians – IIRC, once they've achieved expat status back home, they're only taxed 15% on any Canada-sourced income, and zero on income earned outside Canada.

    Shoot, pre-9/11 the U.S. was a great tax haven for foreigners – as long as they weren't resident in the U.S. they paid no U.S. taxes on any interest/dividends generated by their U.S. holdings.

  7. Canada now has a Conservative Prime Minister. Maybe they are moving here to live under Communism?

  8. Hey, that is MY money paid into the system, and I want it back no matter WHERE I live. Had I not been FORCED to dump it in there, I'd have it to take and spend wherever I please. Get over it, social security is NOT government entitlement, it is payments out on a bona fide contract into which I was forced to participate. If FedGov hadn't coerced me, I'd never have invested. Since they did, I want back whatever I have earned.

  9. don't know what planet yuou're on, but if someine did not pay into SS for the minimum 40 or so quarters, guess how much they get back out? Nothing…. I've checked. No pay in, no pay out. Even a chinese laundryman comprehends that maths.

  10. Fist I did not realize that the federal government ever gave me a dam thing or a so called tax break on my earnings, boy am I dumb because every week I noticed the government took their unworked for share of my money. Even now that I am cribbled and retired they keep taking my money. They do this wasting other tax payer and my money, they can not even explain where all the money goes because they are thieves and liars. So once again immigrants are treated better than tax paying Americans!

  11. I wouldn't denigrate Chinese laundrymen–chances are they can run circles around our HS grads in math…

  12. Dale left coast says:

    "It's true that most Canadians have been lobotomized by their corrupt government"

    Really . . . that has almost balanced the budget, reduced taxes, increased pensions for the last 5 years?

    The west is doing well . . . . Quebec is a basket case . . . has been since 71. Ontario invested 110s of billions in Green Energy and is also a disaster today . . .
    Canada's economy is one of the best is the G20 . . . Luigi is a far-left loon . . . but every country has a few ! ! !

    Canadians taking their registered pension savings would have to pay tax in Canada . . . + taxes on pension income derived from Canada.

    Many sun belt home purchases by Canadians are lived in six months of the year and are not permanent residents. The winter in the sun belt and spend summers back in Canada.

  13. Dale left coast says:

    Most Canadians are buying sun belt homes as an investment and for a winter escape . . .

    According to US law a Canadian can spend 6 months in the US each year.

  14. Seen it! They also get MediCare and perks like senior housing etc. This not a matter of opinion, it is a matter of fact…