13 Tips for Canadians Who Want to Retire in the USA

If you're pondering the idea of retiring somewhere sunny in the U.S., there are several ways in which that can be done, all of which have pitfalls that need to be avoided. While some think that there's an easy-to-get "retiree green card," there isn't — at least not anymore. Back in the day, the U.S. government did offer such an option, but shut it down in the 1970s.

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There are two ways that Canadians can retire in the U.S.: permanently or temporarily. The easiest way is the "snowbird" method, spending a maximum of six months a year in the U.S. and the remainder of the year in Canada, which allows taxes, health care, etc. to remain the same. Retiring full-time, however, becomes significantly more complicated, requiring you to go through the regular U.S. immigration channels.

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For retirees who choose to remain in Canada for half the year, the magic number is 182 — the number of days you can remain in the U.S. each year. Remaining in the country any longer will lead you to become subject to U.S. income tax, while you'll also be taxed in Canada — the double taxation whammy!

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For retirees, typical options such as employment-based visas and green cards are not an option. For retirees with significant assets, one solution is America's Regional Centre EB-5 Program. The retiree must invest a specified amount of money in a government-approved "regional centre" (usually a figure between $500,000 and $1 million) which can ultimately lead to a permanent green card if all the stipulations are met.

For snowbirds who split their time between the U.S. and Canada, there can actually be some health care advantages in terms of dual coverage. Not only can having dual coverage increase treatment options, but the Obama administration's Affordable Care Act (a.k.a. Obamacare) now makes it possible for those with pre-existing conditions to attain affordable health care coverage in the U.S.

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Canadians who retire in the U.S. can actually enjoy some pretty sweet tax benefits. For example, withdrawing money from a Canadian-based retirement account won't be taxed by the IRS. In addition, Canadians who move from Canada to the U.S. will find their taxes reduced by anywhere from 25 to 50 per cent.

While Canadians are used to easily crossing the border into the U.S., it's important to remember that for longer stays, documentation will be required. As these requirements are subject to change, it's a good idea to check with Foreign Affairs and International Trade Canada’s Travel Report for the U.S. to remain updated on any changes that could affect your entry to and exit from the country.

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Yes, you can collect your CPP pension while living in the U.S., as that pension is based upon the worker's history of contributions, not on where he or she lives after retirement. Collecting Old Age Security (OAS) is slightly different, and will depend upon whether the minimum residency requirements are met.

Travel insurance is something to consider depending upon the situation, but it's important to be aware that most travel insurance is geared toward younger travellers embarking on shorter trips. There are another factors to consider, so it's a good idea to take some time and shop around.

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Many Canadians are shocked by how complicated the U.S. health care system can be when compared to the relatively straightforward system we have here at home. For those looking to retire permanently in the U.S., it will be necessary to obtain Medicare — so it's important to know the eligibility requirements and how to navigate the U.S. health care system. Other health insurance policies will be required, so it's wise to do some research to find a U.S. health insurance provider that ticks all the boxes you're looking for.

For many Canadians, maintaining residency in Canada for half the year offers a simple, cut-and-dried solution, but not everyone has the wherewithal to maintain two residences, one in the U.S. and one in Canada. There are a variety of pros and cons as to maintaining residency in Canada vs. becoming a permanent resident in the U.S., and it's important to do some homework to become familiarized with the various implications.

What if you decide to continue working — even on a part-time basis — after retiring to the U.S.? Different rules — and different taxation — will apply depending upon your residency status, and that tax rate could vary greatly. What may seem like a fun part-time job to earn a few extra dollars could become a major headache come tax time, so it's important to know the regulations and how they apply to your situation.

There are many questions that arise when it comes to thinking about retiring in the U.S. When seeking out information, a great place to start is on the website of the Canadian Snowbird Association, which offers an array of valuable information for retirees.

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