Question for those who are retired to another country

[FlyingNorth]

Hello, I'm 47 and currently live in San Francisco. I will soon E semi-R and immediately move to Canada, where my husband has accepted a new job. Part of my income is going to include a 72T from one of my IRAs. I am wondering how people who are living in a different country are receiving their retirement funds? Do you have them deposited in the originating country's bank, then do a transfer to a local bank? Or do you have them sent directly to your local bank, or some other way? Is there any way to avoid the currency conversion fees?

I'm sure there is some obvious answer to this, but I would like to hear from people who are currently doing this. Later on I will have other retirement funds and (maybe) social security also coming from US accounts, so I am very interested in this topic.

thanks!

Beth

 

[Ed_The_Gypsy]

My situation is backwards, but my experience may be helpful. I work in Canada and send $ home to the US.

I have my paycheck in CND deposited in my TD Canda Trust checking account in Canada. I use on-line banking extensively for paying bills up here, etc. Normally, my wife tells me how much we need down south, then I estimate what that would be in Candian pesos and electronically transfer enough to my cross-border account where it appears in US$, after fees are subtracted. These fees are going up from 1% to 2.5%, but that is cheap. She then writes a check on the cross-border account and deposits it in our Key Bank. (We were advised to pre-arrange with Key not to put a hold on these checks. We did so by talking with the manager. Otherwise, they would hold up cashing the check for about 10 business days. )

When we unexpectedly ran out of checks recently, I got a draft on the CND checking account (didn't think about a draft on the USD account--stupid ) and cashed it in person at Key Bank, who charged something like 6.5%. Bank of America would charge less, but still about 4%. I suspect that these charges are typical. Key Bank posts what they will buy at and sell at every day. The spread is your fee.

I have been told that Credit cards have the best exchange rates, but I don't have the numbers. Best to check for yourself.

We only move money that we must spend in the US in order to minimize fees. It sounds like you expect to need your 72T money to live in Canada. I am thinking that you might want to find a US bank that will give you the best exchange rates and the lowest fees on a charge card, deposit your 72T there, use the card only when you need to and pay it off electronically every month. Credit unions are said to have the best deals. Credit unions also generally don't charge on their end for debits at other people's ATMs.

Be aware that Canadian banks are under fire for 'high' fees to use someone else's ATMs, but these fees may drop soon. Canada Trust does not charge me a fee if I use their ATMs. They also have branches all over the place and generally are open later and on Saturday mornings some places. I have been very happy with them.

Only change what you need, but try to do it not too often.

Ed in Cowtown, AB, Canadistan

 

[FlyingNorth]

Thanks Ed, this is all really good info! I expect to use at least some of my 72T payments, though perhaps not all. That may vary from month to month, so I could adjust what I transfer to Canada accordingly I guess!

Credit union sounds like a good idea though - that could work well for me, since I already have checking, savings, and a credit card at my current CU that I was planning to maintain for US banking activity. Your suggestions may be the way to go!

Of course we will be setting up Canadian accounts once we get there. You have been pretty happy with Canada Trust, that's a good one to keep in mind. Are they located throughout Canada? We will be in Toronto.

thanks,
Beth

 

[kcowan]

Of course we will be setting up Canadian accounts once we get there. You have been pretty happy with Canada Trust, that's a good one to keep in mind. Are they located throughout Canada? We will be in Toronto.

Branch coverage is better in Toronto and southern Ontario generally. TD adopted many of the progressive branch practices when they acquired Canada Trust.

 

[Trek]

I don't have any regular checks coming in to deposit but my U.S. bank only charges me $20 to do an online international wire transfer and my local European Bank doesn't charge me any incoming wire fee so whenever I need some money I can just log on and have the money here the next business day. The money comes into my account in US dollars and I just log into my account here and convert whatever amount I want into local currency at the current exchange rate. I pay all my bills here online as well from my local account.

When I do get the odd check for something I just mail it to my bank branch in the States for deposit.

 

[Red-y]

I would avoid using banks as the means of doing the currency conversion...they are not the most economical.

When I need to access my retirement funds held in US accounts from Canada, I'm planning to use Custom House Currency Exchange www.xe.com

I've been using them for several years as I stash my first few years of retirement expenses in Canada in Canadian $ savings accounts. They have executed all my currency trades flawlessly with less than a 1% charge.

You just need to open an account with them online, register your US and Canadian checking accounts with them (routing/transit numbers and account numbers), fax in your signed account agreement, and then you can exchange currencies 24X7. It takes a couple of business days for the converted dollars to show up in the other country.

 

[Texas Proud]

Just a curiousity question... I have seen Citi in various countries around the world... can you do the transfers etc in your own account in Citi Another one might be HSBC... but they are not that big in the US...


One that I have looked at is an internet bank... you can use their ATM and get reimbursed for ATM charges.... I opened an account, but have not yet tried them... will do so in a couple of months..

 

[Billy]

We use Fidelity. They have an account where any income your investments throw off is deposited into a mm fund that is accessible either via check writing or using a Visa/Master debit card. Also we have other monthy bills auto-paid from these accounts. Our money remains in Dollars until we withdrawal from most any ATM machine anywhere in the world.

Billy
RetireEarlyLifestyle.com

 

[NinjaPigeon]

If you want to move money between the US and Canada freely, you could do what I do. I have an RBC acccount that I opened up there and an RBC Centura account, that is down here. They are linked together.

Whenever I wanna move money, I log into the website, choose the direction, and hit the transfer button. It immediately shows me what my exchange rate will be for the transfer. There is zero cost to do the transfer and if I don't like the exchange rate I can wait and try later.

I have done both the credit card route and using my US ATM card there, and found this works the best.

Keep in mind though that Canadian banks charge monthly fees, so I get a $4 CDN charge up there every month, but the US side waives it since I keep over $700 in the US account.

 

[Texas Proud]

Just thought of another bank to look into... IBC... they are down here and if I remember correctly they are a Canadian bank... maybe they have some program to do it..

 

[Meadbh]

Scotiabank is the most international bank in Canada and CIBC has a US subsidiary. However, they seem to do corporate, but not personal, FX.

http://www.scotiabank.com/cda/content/0,1608,CID1117_LIDen,00.html

http://www.scotiabank.com/cda/content/0,1608,CID10_LIDen,00.html

http://www.fxdealing.cibc.com/index.jsp

 

[bosco]

I use

www.xetrade.com

it allows me to do cross-border transfures using EFT (electronic funds transfer).

the rates are good compared to bank fees.

 

[Alan]

I live in the USA but do have an HSBC bank and HSBC savings account in the UK. I have a small pension (2,700 GBP/year) going into the UK bank and in 13 years will have 2 other pensions going in also.

I also have an Internet Bank account which waives $8/month in ATM fees. To get currency in whatever country I visit I use the ATM card as the most cost effective way to do this. (I'll be trying it in India in a few days time).

I had to send in a form to HSBC to get interest income at Gross otherwise the bank taxes at source at UK tax rates. (Interest rate currently at 5.35%). I have used the bank to convert currency over the past 20 years and it is expensive, but we transfer so little that ATM cards work well enough for us. (The HSBC card will also give local currency at a much more cost effective rate than bank transfers).

 

[Ed_The_Gypsy]

Well, I certainly learned a thing or two here today. I am going to keep this thread for future reference.

FlyingNorth, since you know where you are going, you might check out
http://www.tdcanadatrust.com/
At the bottom right side of the page there is a box for branch locations.

Best of luck,

Ed

 

[FlyingNorth]

Thanks everybody! This is all great information, and gives me lots of things to look into. I knew this would be a good group to ask!

best,
Beth

 

[nfs]

You might want to read this thread on CAD-USD conversion. You might also find the information in here enlightening.

 

[Ed_The_Gypsy]

nfs,

Many thanks!

I don't haunt the Financial Webring enough.

For those who don't know, it is a great place to learn about Canadian and cross-border financial issues.

(Norbert, I always think of you as 'not-for-sale'. I hope that's OK?)

Cheers,

Ed in Cowtown, AB

 

[nfs]

And I don't hang around here enough. Too many other things to do and places to see.

Not for sale is great. That's definitely me. 8)