ER for Canadians

[Jarhead*]

The "level of violence" Calgary vs. Tulsa touched a nerve with me.  While not disputing the "stats"
I do know Tulsa is relatively safe compared to many
other U.S. cities (I worked in Detroit for several years
so I have seen some violence up close and personal).
I have my own theories about why there is more
violence in one place (or country) vs. another.
However, I do take comfort in the fact that most of the states in the USA allowed licensed "concealed carry"
of firearms.  As usual, I would rather take care of myself than rely on "the government" to protect me.

John Galt

John, as Cut-Throat mentioned to you once, try reading the post before you answer.
Calgary-Girl was comparing the violence in Tulsa to Calgary. (Not Tulsa verses any other state-side city).
Sorry, John, have about an hour and a half to kill before I tee off this morning.

 

[MikeK]

I've been disappointed at the bias of some of the Americans in here, and ignorance of what is comparable and not comparable between the 2 countries.  

I've also been quite disappointed with the bias and, truthfully, ignorance of the Americans on these posts. First, I'm an American but married to a Canadian. I find that most Americans have no appreciation or willingness to learn about other cultures. I get the perception that most Americans think Canadians are just American-wanna-bes. This is not true. Canada is a beautiful country with wonderful people and are regularly listed above America in polls documenting the best places to live. Now that I'm off my soap-box back to the finance discussion .

You can never do a complete comparison between different countries. There are financial implications but each person has to prioritize his/her issues.

The simple answer is that people with high incomes will see more of their paycheck in America. My relatives live in Manitoba (that's a province in the middle of Canada ) The tax rate is 47% above $60K. Most Canadian provinces have actually been lowering their tax rates because high-income individuals have traditionally moved to America (engineers, doctors, lawyers). They also have a considerable use tax, 15% in Manitoba for any sales purchase.

I personally find the quality of life in Canada much better for middle-income individuals. The national health care system, unemployment insurance, maternity leave and other social support system. What's hard to put a price on is (a) the lower crime rate in Canada and (b) the atrocious winters in Canada. It comes down to a personal choice.

My choice is to live in America since I have a high-income job and can choose to live in a beautiful weater area (Bay Area). I am seriously considering a move to Canada once I hit ER. There are many benefits to having considerable American savings and living in Canada, especially if you can access their health care system (I can because my wife's Canadian and will probably still want to work half-time).

Mike

 

[cute fuzzy bunny]

I for one have made all my comments with tongue firmly in cheek, and it appears to me to be the same for most of the others.

Not to mention I'm half canadian and have spent quite a few pleasant vacations there from vancouver to prince edward island.

Do we have to add "no sense of humor" to canadian traits?

Perhaps all that invasion planning, waiting in line three weeks for a flu shot and walking 3 miles in 20 foot deep snow 365 days a year from their igloos to the ice fishing shack makes them grumpy.

 

[John Galt]

This has come up a couple of times (that my posts
don't necessarily pertain to the question at hand).
I plead guilty as charged! See, I read 'em fast and
respond fast so I'm bound to miss stuff or just go off
on a tangent. I humbly apologize to all. However,
it ain't gonna change. My brain is bubbling 24/7
(pretty scary) and it's gotta come out. Pity the poor wife. An example: this morning I was watching the
preparations for the Democratic Convention and asked
my wife "Where is Osama Bin Laden now that we
really need him?" She was not amused. I don't care.
Egomania is wonderfully liberating in that way

John Galt

 

[Hyperborea]

Obviously, the difference in 'violence' between Tulsa & Calvary [sic] has nothing to do with quantity of people. I suspect, if you look at the demographic differences and the demographics of the 'violence' you might get a clue. But, bashing Uncle Sam is more fun for the Kanuk Kook Kontigent than having a klue.

Oh yeah, "demographics". (nudge, nudge, wink, wink) I think we got your seKret Koded Klue.

 

[Zipper]

GDER? re your 8:05 AM response? Do you guys always hit the bottle that early? Most Canadians I know usually wait 'til mid-afternoon.

 

[John Galt]

My wife frequently reminds me that it is always
cocktail hour somewhere in the world.

John Galt

 

[babyApe]

xxxx

 

[nfs]

If I become a resident of Canada do I have to move my investment accounts to Canada so that I don't have to pay taxes in the US?

You do but not for tax reasons.

If you live in Canada, the securities regulators in every province want to protect you from rapacious thieves overseas. Brokers and mutual funds are considered part of the class. To protect innocents from them, Canadian regulators require the brokers and funds to register with the commissions. Canada is such a small market that most cannot be bothered.

A few years ago, there were nasty spats between regulators and brokers. First the SEC (the US SEC) started fining Canadian brokers for continuing to do business with Canadians resident in the US. To keep things level, the Canadian regulators started fining US brokers for doing business with Canadian residents.

The end result: Brokers stopped doing business with residents of the other country.

The moral: If you want to keep dealing with your current broker after you move, make sure that you keep a US address. Realize that, if you ever become dissatisfied with either a broker or a fund, you won't be able to switch.

Because of the hideous tax consequences, there are exemptions for retirement accounts. Regular IRAs and 401(k)s can be left in the U.S. You can even change the address to a Canadian one and nothing will happen, except that you create a problem for yourself if your taxable account is at the same institution as the retirement account.

Roth IRAs are a pain because the tax treaty doesn't mention them. Income and realized gains are taxable in Canada. If you are planning to move, stick with vanilla accounts.

If you have kids, don't open any education plans for them. Again the tax treaty will cause you grief.

Living trusts are another snare. Canadian tax authorities hate overseas trusts as much as the IRS hates overseas trusts. Don't complicate your life if you plan to move.

Enough bad news. Here's some good news. Canada steps up the basis for investments when you enter the country. The treaty specifies that capital gains are only taxable in the country of residence. So, if you have a million dollars in unrealized capital gains on securities, you can move from the U.S. to Canada, sell the lot, and pay not a nickel to either country.

 

[Hyperborea]

The catch on the capital gains though is if BabyApe is in fact an American. If he is then the US government has its claws into him essentially for life. Yeah, he can renounce his US citizenship but the IRS will likely continue to demand taxes for the next 10 years and he will also need a visa (which may very well be denied) for any visits to the US. If he was a green card holder and was such for 8 of the last 15 years then they've got him too. The US is one of the only countries in the world to tax their citizens no matter where they live.

Expatriation tax info:
http://www.irs.gov/businesses/small/international/article/0,,id=97245,00.html

Note that there are "exceptions" but these only allow you to ask for a ruling that you get out of paying the expatriation tax. There is no guarantee of success and it will likely cost around US$10K for the ruling.

This means that even if Canada doesn't tax those gains the US government will. The tax treaties prevent double taxation but you generally get hit with the highest tax and the lowest deductibles of either country.

 

[Hyperborea]

Regular IRAs and 401(k)s can be left in the U.S.  You can even change the address to a Canadian one and nothing will happen, except that you create a problem for yourself if your taxable account is at the same institution as the retirement account.

Any information on which IRA providers are willing to do this? I've heard some stories of problems from those who've left the US and returned to Canada from folks on the Grasmick board (http://grasmick.com/board/?topic=topic2). Any ones to avoid? Any that you've heard are good about this? How about Vanguard?

Thanks

 

[nfs]

The catch on the capital gains though is if BabyApe is in fact an American. If he is then the US government has its claws into him essentially for life. ... This means that even if Canada doesn't tax those gains the US government will. The tax treaties prevent double taxation but you generally get hit with the highest tax and the lowest deductibles of either country.

Quite true. The treaty allows it. Poor USians - slaves to DC in perpetuity. Four years of civil war to abolish involuntary servitude and they still end up with ... involuntary servitude.

Any information on which IRA providers are willing to do this? ... How about Vanguard?

I use Waterhouse without incident with a Canadian address. I know a fellow who uses Schwab but I'm not sure he isn't having his mail forwarded to him. I wish I could use Vanguard but they hate Canadian accounts. On the telephone, the fund arm seems more willing than VBS, but it makes no difference for most people. Buy a fund or funds, move to Canada, and you can never switch again. Selling is fine but they won't let you buy anything because "it would be a violation of Canadian securities laws." Damn government.

 

[R Murf]

We are comtemplating ER abroad - either Canada or New Zealand (weather obviously a factor for 2 Southern Californians).

Any advice on how to look into whether Canada "welcomes" early retirees, any income/asset requirements and how long it takes to qualify for health care. I understand some places - like NZ are so popular they really don't want retirees, just younger workers. We hope to take our SoCal home equity and buy a place outright and use our pensions, etc, for living expenses. Thanks!

 

[Hyperborea]

Any advice on how to look into whether Canada "welcomes" early retirees, any income/asset requirements and how long it takes to qualify for health care.

If you are able to become a permanent resident then you have access to the health care depending on provincial rules. Some of the provinces have a 6 month waiting period after you establish/re-establish residency. So, even a Canadian from birth who returns after many years away will not be covered for the first 6 months. You need to make sure that you have health care coverage through personal insurance for that time.

As to whether Canada welcomes retirees I think that the answer is no. Depending on how old a retiree you are then you might be able to immigrate. You would need to be a young enough retiree to look like a possible worker. The Canadian immigration system uses points with more being better and the points you get for age starts decreasing around your late 40s.

Check out this site - http://www.cic.gc.ca/english/immigrate/index.html

 

[nfs]

We are comtemplating ER abroad - either Canada or New Zealand (weather obviously a factor for 2 Southern Californians).

While Canada has a fierce weather reputation, coastal BC is more moderate than much of the US. It's hardly going to compete with California weather though.

You may be surprised by New Zealand's weather. It's a very cool country, much cooler than most people expect.

Any advice on how to look into whether Canada "welcomes" early retirees, any income/asset requirements and how long it takes to qualify for health care. I understand some places - like NZ are so popular they really don't want retirees, just younger workers. We hope to take our SoCal home equity and buy a place outright and use our pensions, etc, for living expenses. Thanks!

Use hyperborea's link re immigration rules. The investor class is a bit of a laugh: Lend C$400k to the feds interest free for 5 years and we'll let you in. If you can stand that sort of hit - the equivalent of selling Canadian passports for about a hundred grand - it's not unthinkable.

Hyperborea was slightly off on the health care rules. In fact, no province makes you wait more than 3 months after you arrive. If you're concerned, you can buy private insurance to cover the gap. Blue Cross charges $6.60 a day for those between 50-64, so 3 months runs about $600 max.

 

[Hyperborea]

Hyperborea was slightly off on the health care rules.  In fact, no province makes you wait more than 3 months after you arrive.  If you're concerned, you can buy private insurance to cover the gap.  Blue Cross charges $6.60 a day for those between 50-64, so 3 months runs about $600 max.

Ok. I thought that one of the prarie provinces did or perhaps I've mixed up the 6 months out of the country to lose coverage with the amount of time to regain coverage. I didn't want to imply that the cost to get alternate coverage was huge but to warn that you need to get some. I've known of somebody who didn't and was surprised to learn that they weren't covered.

 

[nfs]

investor class

As an aside, this may be completely unnecessary. Try taking the skilled worker assessment. For example, having a master's degree, a spouse with a master's degree, a command of English, and 4 years of work experience gets you a 67/100, which is a passing mark. There are bonus points if you're under 53 or know some French.

 

[BabyApe]

xxxxxxx

 

[Ed_The_Gypsy]

I am a Yankee Dog [actually, I prefer Great Satan] working up here in northern Alberta, though my home base is in the States.

Maybe this will help:

You may find this Canadian mag interesting:

http://www.moneysense.ca/planning/rrsp/

They have the usual drivel about actively managed funds and stock-picking (gotta make a living and ads pay for the magazine). However, they have picked up on Scott Burns' Couch Potato (among others) Portfolio and have picked Canadian equivalents to Vanguard funds (lowest fees, indexes, types). They may also suggest discount brokers, but can't swear to it. Read it on-line. They had an interesting scheme whereby one buys the least popular RRSP investment category for the most recent year (published information) and the returns beat the market.

A fellow expat friend suggested TD Canada Trust for banking and it has served us very well. They have on-line banking and I can pay bills on-line (I paid my Canadian taxes this way this year). They offer a cross-border account which includes a US dollar account. My paychecks are direct-deposited to the CDN$ account. I pay bills and living expenses by debit card or credit card in CDN$. My wife goes on-line, moves CDN$ to the US$ account (exchange rates are small, but I don't remember what they are off-hand) and writes checks on it deposited to our US bank to pay the US mortgage, etc. Warning: Arrange in advance for your local US bank to NOT put a 10-day (or whatever) hold on your check. Establish a relationship with your local branch manager. My US accountant told us to do so and made the introdudction to the bank manager for us. EZ. By the way, it also reduces the exchange rate costs to have a local (CDN$) credit card.

TD Canada Trust also owns TD Waterhouse (may be in the process of selling it though), which used to be Price Waterhouse. I could also buy and sell shares and mutual funds through them on-line on the same web site [but I don't--all my investments are in US mutual fund companies, most with Vanguard].

As far as moving up here, there is a labor shortage in Alberta these days [summer, 2005], and it gets "worse" (depending on your point of view) the further north one goes. (I am almost at the end of the road. To go much further north, one must wait until the lakes freeze.) Most kinds of engineers, designers, drafters, craftsmen (beware of union issues here, though; check first) are in short supply. A US engineer can come here very easily under NAFTA. An agency can set this up for you. Look for jobs here:
http://jobs.workopolis.com/

Alberta is the lowest tax province in Canada. It may well have a lower tax burden than many US states (not mine, though).

I like Calgary but I like Edmonton a little more (when I can get down there). Drumheller is a small town that looks like a good candidate for low-cost living, perhaps retirement. Bears investigation. Where I live has no ants, cockroaches, termites or rats (Alberta has no rats!). There are mosquitos (sp?), black bears, wolves and moose. Wait until you see what a moose can do to a vehicle that hits it. Summer days are long but winter brings -40 days. Dress for it.

The medical system is affordable, but problematical. It is a sacred cow and a national treasure. Don't dis it to a native.

I have the option of becoming a Landed Immigrant and from there a Canadian citizen. It does have its attractions, but this late in life I have other plans.

At this point, I pay Canadian taxes like a local. If I were clever and had more time to look into it, I could start a corporation and avoid more taxes, but I don't.

The US dollar has been falling against the Canadian dollar for a couple of years. As I am paid in CDN$, I get a small raise from time-to-time. Could be worse.

I do not have all the answers myself to retiring up here. You pretty much have to become a Landed Immigrant and go from there, and that takes time.

I enjoy living and working here. You do have to expect anti-American vitriol from time to time from people with no manners (there are enough here). A Canadian once said that anti-Americanism is the state religion of Canada. Show some class and ignore it or turn the discussion to local politics. It isn't hard to put them on the defensive if you know the local stuff.

Canadians read a lot, smoke a lot and drink beer a lot. Another Canadian (Peter Jennings) just died from lung cancer, but the news doesn't tell that he smoked hard until just lately.

But I digress....

More when I know more.

Gypsy

 

[Mr._johngalt]

More when I know more.

Gypsy

Thanks Gypsy. I would say the same, but I know it all already.

JG

 

[BabyApe]

xxxxxx

 

[bosco]

I've been disappointed at the bias of some of the Americans in here, and ignorance of what is comparable and not comparable between the 2 countries.

This surprises you? What do you expect from a country that considers Fox News to be "fair and balanced" and the patented intolerance of Rush Limbaugh to be worthy of air time? That for "religious" reasons, considers gays to be subhuman?

Each country has some pluses and minuses, but on balance there is little difference.

I find there to be a huge difference. Americans love to ballyhoo about how they are the best, the greatest, the most free.....yet they die sooner, have higher infant mortality, have 10 X the people incarcerated per capita, more murders, and fewer rights (except the right to blow each other away with handguns) than Canadians. They would prefer to step over bodies in the street than part with a nickel of extra tax for health insurance. George Bush basically threw a tantrum at the level of funding proposed for Africa at the last G8 summit (those bodies won't be in OUR streets....). Americans buy the corporate BS left and right, elect elitist right wingers, and actually buy the line that cheaper Canadian drugs are not safe. Which is good, because if the mass yankee market were allowed to get at Canadian drugs, we'd have to pay much more for them ourselves.

Of course there are exceptions, but they seem more and more in the minority--but look at who they elect for leaders. The root of the problem is that they have lost their free press, and are too apathetic to care or even notice.

Both Canucks and Americans could learn FIRE from each other if they chose to. It's obvious the American posters in this thread don't.

When's the last time you observed an American learning anything from a "foreigner?" In fairness, it does happen, but it is not typical. Look at how they love to bash the French. Why? Because it's easier to bash them than consider that they might be right to have refused to participate in an illegal invasion. If you're a yank, it's not enough to be good. You have to be the best. Even when you're not. If you think you're the best, what can you learn from inferiors?

 

[nfs]

Could any of you canadians offer some advice on which brokerage (bank?) to use for a guy who normally likes Vangard?

I use BMO's discount broker, Investorline. I do that because I bank at BMO and it makes it dead easy to shift money back and forth. Banking elsewhere, you might want to use that bank's discount arm. The services and fees are pretty comparable. You might want to ask on a forum with more Canadians. Try this for example.

Are there any good investment books specific for Canadians that explain RRSPs, Canadian Pension Plan, Employee Pension Plans etc.

It's hard to find everything in one place. Try the Ring forum for specific questions.

 

[BabyApe]

xxxxx

 

[Zipper]

Whatever happened to Hyper?