Dual citizen: Is it better to retire in Canada or the US

[bondi688]

I was asked by a friend, who is a dual citizen of both Canada and the US, who is currently living in the US, whether I think it is better to retire in Canada or the US. He is eligible for full social security in the US and has a small amount in addition coming in from the Canada Pension Plan. He has a RRSP (equivalent to an IRA) in Canada, but most of the IRA money is from him working in the US. He is not sure whether he'll get Old Age Security from Canada if he go back to Canada and retire there, but it would amount to less than $200 a month anyway. He is renting and has no housing to tip the scale. Family tie also does not play in the decision. I said I do not know, being not too familiar with Canada other than having some visits there, and found her to be a nice place to live. I told him I can refer his question to this board. I had seen some posters from Canada, and there were also some ex-pats. So, aside from social considerations, what do you think from a pure financial, taxation or logistic perspective? Are there other dual citizens who had made a choice? If they did, can they expand on the pros and cons?

[bondi688]

I did a search and there was some previous discussions on dual citizenship. I'll point him to the threads. But any further thoughts probably will be appreciated.

[MichaelB]

If your friend is a dual citizen and only rents, why does he need to choose one or even stay in only one place?

[pb4uski]

US, Canada is too flippin cold.

[Koogie]

Try looking at or asking over at the Financial Webring Forum. It is like this board but for Canadians. Lots of smart people there and many spend a lot of time in the US so are likely more qualified to answer.

[anethum]

One obvious consideration is health care. While each province provides coverage, I would imagine that there is a residency requirement before coverage takes effect, even for a citizen returning to Canada. One of the questions on the following faq addresses this:

Canada Health Act - Frequently Asked Questions

[nun]

The main reason to choose Canada would be the lower cost of healthcare. That's the same reason I'll probably ER back to the UK, the line item for health insurance/costs simply disappears from my budget. I'm immediately $6k better off in the UK compared to the US. Also my property taxes and income/capital gains taxes will be less in the UK than the federal and state taxes I'd pay. The big hit in the UK is VAT at 20% and the cost of gas.

[Letj]

Quote:

Originally Posted by nun The main reason to choose Canada would be the lower cost of healthcare. That's the same reason I'll probably ER back to the UK, the line item for health insurance/costs simply disappears from my budget. I'm immediately $6k better off in the UK compared to the US. Also my property taxes and income/capital gains taxes will be less in the UK than the federal and state taxes I'd pay. The big hit in the UK is VAT at 20% and the cost of gas.

And food and everthing else. The 6K in savings would be more than offset by a much much higher cost of living.

[nun]

Quote:

Originally Posted by Letj And food and everthing else. The 6K in savings would be more than offset by a much much higher cost of living.

If you are talking about London I would agree, but I'll be moving from an expensive area of the US to an inexpensive area of the UK and expect to see my living expenses fall.

[Alan]

Quote:

Originally Posted by Letj And food and everthing else. The 6K in savings would be more than offset by a much much higher cost of living.

Not at all, depending on where you live. We are considering living mostly in the UK, spending 5 months of the year in the USA.

In 2011 we lived in a small town (pop 25,000) in N. Yorks and I kept a detailed log of how much it cost. Certain foods that we like to eat, like artisan bread, were actually cheaper in the UK. (The bread was $1.50 compared to $3.50 here).

A few days ago I just did a budget for what it would cost to maintain our place here in Texas while renting a permanent place in the town we want, and included the costs of running a car plus $8k/year air fares and we can expect to be paying about $20k/year extra. Added costs to when we lived there in 2011 would include a car although we would have free bus passes so would use the car infrequently. I was pleasantly surprised to see that the road tax for the sort of car we'd need, sub-compact Ford Fiesta diesel cost $0/year and the larger, Ford Focus diesel costs $36/year.

[Texas Proud]

Quote:

Originally Posted by pb4uski US, Canada is too flippin cold.

+1

[Alan]

Quote:

Originally Posted by pb4uski US, Canada is too flippin cold.

+1

If he could afford it then snow-birding would be a good option but he'd need to be sure on the tax issues, so take a good look at those dual citizen threads.

[nun]

Quote:

Originally Posted by Alan Not at all, depending on where you live. We are considering living mostly in the UK, spending 5 months of the year in the USA. In 2011 we lived in a small town (pop 25,000) in N. Yorks and I kept a detailed log of how much it cost. Certain foods that we like to eat, like artisan bread, were actually cheaper in the UK. (The bread was $1.50 compared to $3.50 here).

mmmm I wonder where that could have been. I've also done a detailed cost comparison between New England and North Yorkshire and the cost of living is less in North Yorks. Food is generally less expensive in North Yorks as are utilities. As an example I pay $110/month for cable and internet in the US, in the UK a similar service is $70/month. Having a car is generally far more expensive in the UK as is train travel, so there are pluses and minuses.

Of course Alan the biggest reason to go to N. Yorks is easy access to warm Petches pork pies and big squares of black pudding!

[nun]

Quote:

Originally Posted by Alan +1 If he could afford it then snow-birding would be a good option but he'd need to be sure on the tax issues, so take a good look at those dual citizen threads.

yes you'd want to keep Canadian residency for the health benefits too.

[Koogie]

Like the UK, Canada has higher costs for consumer goods and a lot of groceries and restaurant meals than the US. The taxes can be eye watering too.
However, unlike the US, a lot of the tax burden is oriented toward consumption taxes (HST/GST) and user fees. So, consume less and you pay less tax. It's a concept I'm all for, frankly.

However, much like the people on here that feel the need to point out how every question is to "simple" and doesn't take into account every one of a million variables, the OP has asked a pretty broad question too. His friends income level, type of income, relative need for healthcare, etc.. would all have to be taken into account.

By the way.... I'd rather be a little cold once in a while than live through the hell of a 6 month Texas "summer" !!

[fh2000]

Quote:

Originally Posted by nun mmmm I wonder where that could have been. I've also done a detailed cost comparison between New England and North Yorkshire and the cost of living is less in North Yorks. Food is generally less expensive in North Yorks as are utilities. As an example I pay $110/month for cable and internet in the US, in the UK a similar service is $70/month. Having a car is generally far more expensive in the UK as is train travel, so there are pluses and minuses. Of course Alan the biggest reason to go to N. Yorks is easy access to warm Petches pork pies and big squares of black pudding!

Nun, and Alan,

I assume you both will keep US Citizenship, therefore required to purchase HI after ACA. Will you purchase high deductible, lower premium plan then?

[nun]

Quote:

Originally Posted by fh2000 Nun, and Alan, I assume you both will keep US Citizenship, therefore required to purchase HI after ACA. Will you purchase high deductible, lower premium plan then?

There's no requirement for US expats to buy health insurance, in fact as non-US residents they are excluded from all the plans. If they have a high enough income they will have to pay the associated tax though.

[bondi688]

Alan and Nun
It is interesting that you brought up Health Care. Do you plan to get future health care in the US or the UK? You hear about horror stories about NHS and long wait for elective procedures in Canada (propaganda?), and you guys are living in medical meccas in the US (Houston and Boston)

[Alan]

Quote:

Originally Posted by fh2000 Nun, and Alan, I assume you both will keep US Citizenship, therefore required to purchase HI after ACA. Will you purchase high deductible, lower premium plan then?

I have retiree insurance from my US ex-employer and plan on keeping it as we'll be spending 5 months a year here. That insurance also covers me in the UK for elective surgery and there is a participating private hospital just 10 miles from where we plan to live. We'll certainly use the NHS for primary care.

[Alan]

Quote:

Originally Posted by bondi688 Alan and Nun It is interesting that you brought up Health Care. Do you plan to get future health care in the US or the UK? You hear about horror stories about NHS and long wait for elective procedures in Canada (propaganda?), and you guys are living in medical meccas in the US (Houston and Boston)

See my post above regarding this.


We have plenty of friends and relatives in the town and close by, so we know how it is and none have any horror stories, in fact just the opposite. In the last few years our good friend, at 63, found that he was out of breath easily so went to the Doc who referred him. Within 6 months he was the proud owner of a new heart valve, and doing just great almost 8 years later. My sister, in her late 30's 3 years ago, was found to have cancer after a routine pap smear. Within 6 weeks she had had 2 procedures to remove all the cancerous tissue, and was just recently moved to an annual check-up since she is still clear.



Across the country my wife's niece, in her mid-20's, had both kidneys fail (she has lots of health issues following a near fatal car accident some years earlier). Once she was stabilized, on dialysis and blood chemistry within limits she was put on the donor list. 5 weeks later she got a call at 4am, surgery later that day and she had the transplant as the kidney was a perfect match. That happened 2 or 3 months ago, just before Christmas.


There are always issues but personal experience leaves us confident that we will do just fine with the NHS, plus our private HI.