ER for Canadians

[sgeeeee]

Hey TH, according to my son-in-law (Lutheran
minister), you are going to hell.  Just thought you'd want to know.

John Galt

TH,

Send me a post card when you get there. I like to collect postmarks from exotic places.

 

[cute fuzzy bunny]

John - I'll have the cold drinks on ice waiting for you, unless you get there first, in which case the first round is on you.

SG...somehow I think you're going to be the next guy buying the drinks. But I'll have the local post office run you off a postmark or two.

 

[sgeeeee]

. . . SG...somehow I think you're going to be the next guy buying the drinks.  But I'll have the local post office run you off a postmark or two.

Thanks for the vote of confidence.

John, TH, What are you guys having?

 

[cute fuzzy bunny]

Anything upstream of turpentine is good. We'll save the turpentine for later.

 

[John Galt]

Turpentine cocktails would lead to a fine finish, he
opined................

John Galt

 

[unclemick]

"turpentine coctails" ? That was the judgement of on some of my 'least than stellar' homemade wine and beer batches over years past.

 

[superdave]

Good to hear from fellow Canadians. I think the two main incentives Canadians have to ER earlier than you would in America is:

1) Health care costs lower ( obviously )
2) higher tax rates pretty much eliminate reason to work any longer than you must/have to anyway.

The downside is, with the higher tax rates, it takes longer to accumulate capital. Also , as mortgage interest in not deductable, it really does not make sense to carry a mortage any longer than necessary.

 

[Zipper]

Mrs. Zipper's mother is 83. She, her husband and Mrs. Zipper and siblings emigrated to Canada in 1952. Canada has had medicare since the late 60's. Mother-in-law has had excellent care. She has had heart-valve replacement 30 years ago, hip and knee relacement, gall bladder out, more open heart surgery .........hell, she's the bionic woman. No charge! . We live in the London-St. Thomas area of ON and are 2 minutes from a world class hospital. Of my retirement worries out of 10, health care ranks last (10).

 

[Zipper]

That's an easy one. Ask anybody. Your dollar has been overvalued since the CEO's commandeered your economy in the late 90's and went on the option binge. In the past year the US$ has fallen against the Aussie-Canadian dollars, Euro, you name it. China is pegged and holding you up. Check the MacDonald hamburger currency exchange at the Economist. Canada has had a balanced budget for the past 5 years and a whopping current account surplus. But don't get me started! I'm on your side. Canada has NOT been carrying it's defence load for decades and we are dependent on you, and I thank you very much. Maybe that's why we have better health care?

 

[Zipper]

Well, let's start with Canada being your largest trading partner. You sure buy a hell of lot of oil, gas, minerals, forest products, and manufactured goods. Counting the Tar Sands, we've got more oil than Saudi Arabia. And how about all that Electricity Quebec sends south to New England and New York. Uranium for your Nukes comes from Saskatchewan. All your Crown Victoria cop cars are manufactured 10 minutes from me in St. Thomas. Dodge Caravans and Pacifica's from Windsor. Chrysler 300's from Brampton. Impalas, Grand-Prix's, Century's and Regals from Oshawa. Corolla's from Cambridge. Equinox's from Ingersoll and Honda in Alliston. We seem to be able to buy homes, afford higher education to those who want it, have a superior health system, much cheaper drugs, clean cities with minimal litter...........and a crime rate a fraction of yours.

 

[Zipper]

By the way? What's a government dependent early retiree? :Are you on welfare? Medicaid? You and your wife might not like Canadian dollars, but they sure do in FL, TX, AZ, NM, and Nevada. Vegas is "the promised land"!

 

[Zipper]

So 'howcum you pay the highest healthcare rates in the world........but we are healthier, live longer, and since we already live here, we don't need to head north for cheaper drugs?? :

 

[Zipper]

I'm sure anywhere in the US is great compared to....CITIES:Ranked & Rated: More than 400 Metropolitan Areas Evaluated in the U.S & Canada :Sperling & Sander 2004. Out of 400 [ Charlottesville VA (1), Santa Fe NM (2), Honolulu (5), Vancouver (20), Minneapolis (24), Montreal (30),  Ottawa (35), New York/Toronto (40), Tampa (48), Los Angeles (54) Denver/Calgary (60), Edmonton (70), San Diego (74), Winnipeg (75), Indianapolis (79), Cincinnati (92), San Francisco (107), Miami (125), New Orleans (139), Halifax (150), Chicago (155), Houston (158), London ON (165), Baltimore (179), Detroit (263)]

 

[Zipper]

Tell me where you live GDER, and I'll rank you? Or you can go to the source and look it up yourself.

 

[Hyperborea]

2) higher tax rates pretty much eliminate reason to work any longer than you must/have to anyway.

I wouldn't be so quick with the comparison. I haven't done any Canadian taxes for a while but I think that if you run the numbers on a few different scenarios you will find that they will come out roughly comparable. It tilts towards better on the Canadian side of things once you include the costs of US health care even if your employer is picking up some of the tab.

In a retirement scenario the taxes for a Canadian couple could be quite a bit less than that for a US couple. The capital gains rates are very low (only 50% of gains are counted as income) and if you income split (Canadian taxes individuals not couples) you can keep the rate very low.

I'm a Canuck who works down in Silicon Valley, am in my late 30's, plan to retire in about 7 years, and then leave the US and travel for 4-10 years. After that my wife and I have talked about locations to settle into with Toronto being in the top few.

 

[John Galt]

Back when I could tolerate big cities and cold weather,
Toronto was my favorite place to be.

John Galt

 

[Hyperborea]

Why anyone would want to live in a metropoitan area is beyond me?

For hyperborea: I understand why you would want to work in the U.S. to enjoy higher pay, lower 'working income' taxes, and better climate.  I'm not sure I fully appreciate, why you would want to go back even for 'low <no?> cost' health care. If your gov't employed health care workers do receive lower compensation and have to accept a lousy climate, hard to see how you would attract very many of the 'best and the brightest'. Why you would you want to wait in 'cue' for this care, when there are so many other alternatives, is ... ?? Oh well, choices - it's all about choices.

The pay here in Silicon Valley is higher yes but that is because there is still for people with certain skill sets a shortage.  In any shortage situation there will be higher costs to the purchaser or in this case to the employer.  There are also higher costs to live here but if you are careful you do end up ahead.  However this shortage situation doesn't exist for most of the mundane computer jobs in the US so the pay isn't really any higher.

As for the taxes, I've just run some really rough numbers and I come out with a couple of thousand dollars more in taxes in Canada as compared to my multiple tens of thousands of dollars US tax bill.  However, that didn't include all of the Canadian deductions (rough over morning coffee calculations) and my US taxes are driven lower by the large interest amount that I pay on my US home.  It also doesn't include the cost that I pay for my mostly employer subsidized health insurance.  Finally, that doesn't include the very large amount I pay in FICA taxes.  All in all as I said earlier roughly comparable to perhaps being cheaper in Canada.  If yo income split the numbers for Canada get even better.  But I guess it's easy to disparage without actually working the numbers isn't it?

Better climate is a personal decision.  Right now I experience the two seasons of Silicon Valley - rain and summer.  I never minded the winter and I used to X-country ski which I can't do here.

As to why Toronto?  Just look at your opening line.  If you want a safe, clean, diverse, big city then Toronto is your choice.  I don't understand how anyone doesn't want to live in the city.

 

[Hyperborea]

LOL -- I guess you have me there, but before I take out my stubby pencil -- Do you really believe my gov't pension + eventual SS benefits  + investment income (all taxed by U.S.)would result in lower taxes, if I paid canuk taxes on top of U.S. taxes?? Palleez some common sense.

Common sense? What kind of common sense is it when you change the scenario after the answer doesn't suit you? The original comment you posted was that I was paying less taxes by working in the US as opposed to Canada. Now you are making the scenario one where somebody is paying taxes to two countries. Those situations are always troublesome and you basically end up with the worst of both taxation systems. For the most part those kind of situations only occur in the year that you change residence unless you are a US citizen because the US government wants tax from you no matter where you live.

Will you still be able to collect on your U.S. SS when you go back?

Yup.

As I stated before, you couldn't pay me to use canuk's socialized medicine. So, if by some miracle paying taxes to two countries was actually cheaper, there is absolutely NO way I would trade my earned medical benefits for the dubious delights of socialism.

Do you mean your socialized government provided health system given for military service? I've heard a lot of horrific stories about the military health care for vets in the US.

It should be real interesting to see what happens in a few years, when canuk's boomers start to hit zip's mum's age and all want the freebee ultra-bionic treatments at the same time.

My father had one of his knees replaced just a couple of years ago and everything went very smoothly. He's currently looking into having the other one done (probably bad genetics, squash - it's harsh on the knees, and a lifetime of working on concrete floors). No more hassles than health care in the US. The big trouble with health care in the US that I've had is having to change all of my medical providers (GP, dentist, wife's OB/GYN) every time I've changed jobs because the health insurance company changed and the doctors didn't take that one. Back in Canada I had been seeing the same doctor who had delivered me.

 

[Hyperborea]

Sorrrry about changing trains in mid thought on you. I tried to apply your logic to see how it would work for me. You asked if I had done the math on taxes and I really have no reason to do tax math for anyone else.

Well, if you want to make the claim that you did that I was paying less taxes in the US then you did unless you were willing to make a completely uninformed comment.

It sounds like in your old age, you'll have U.S. youngsters to support your SS and canuk youngsters paying your med bills. It should be interesting to see who gets fed up first.

I've actually got US SS and Canadian CPP that I've paid into with credits enough in both for a pension and my wife has credits in the Japanese system and may have enough for the US SS before we leave the US. The Canadian system is on quite sound footing with a large pool of investments built up so I think that it has larger odds of paying out. None of these are included in my retirement planning as it will be about 20 years after I retire until I can collect any of them.

As for the health care systems I won't be using it for quite a while as I plan to be travelling for quite a number of years before possibly returning to Canada. The survival of the Canadian health care system seems much more likely than the US Medicare system that most US citizens will be relying on in retirement though.

 

[AltaRed]

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. There is no way to make an informed judgement until one has lived and worked in both countries. I have worked in the USA 4 different times including my 1.5 years so far in Texas. Perhaps it's time to trust those individuals a bit more who have some real knowledge.

Each country has some pluses and minuses, but on balance there is little difference. Canada does not allow interest deductions on a mortgage on a principal residence, but they don't tax the gains either upon sale. And before someone comments on paying double taxes, they obviously don't understand the tax treaty between the 2 countries.

Americans also pay huge FICA taxes which must be figured into the income tax rate. Also health care costs - and if Americans don't have healthcare, well, then it's SOL with Medicaid, etc. My co-pay with my Fortune 500 company is way more stateside than what it was in Canada. When the adjustments are done, there is little difference between the 2 countries in most areas (high cost urban areas aside).

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.

 

[superdave]

Wow. I was off camping for a couple of weeks and my thread went crazy.

For what it is worth, I am a Canadian but lived in Houston Texas and Boston Mass for 4 years and 1 year respectively. For the purpose of accumulating capital, Texas was really good with no state income taxes and a relatively low cost of living. We Only stayed 1 year in Boston primarily because we could not accuulate capital , primarily because of the high cost of living and high tax rates. In fact, we found that financially, we were best off in Texas. However, to ER, Canada is very good after you have a nest egg .

As was already stated, you are much better off paying off the mortgage early in Canada, even with todays low interest rates. We leave in Nova SCotia, think it was a great place to ER, but do miss the 'opportunitys' presented in some of the larger US centeres. However, you can't have everything all the time.

 

[John Galt]

Or, as I like to put it, we can anything we want.
We just can't do everything.

John Galt

 

[Calgary_Girl]

Each country has some pluses and minuses, but on balance there is little difference. Canada does not allow interest deductions on a mortgage on a principal residence, but they don't tax the gains either upon sale. And before someone comments on paying double taxes, they obviously don't understand the tax treaty between the 2 countries.



Hey AltaRed I have to agree with you. I lived in Tulsa, Oklahoma for a couple of years and OVERALL found the cost of living about the same as in Canada with some differences. Healthcare cost me a lot more in the States what with all of the co-pays than it currently does in Canada. Housing was cheaper in Tulsa (since it was a smaller city and had a less than desirable economy) but my property taxes were higher than they currently are in Calgary. I find it much easier also to save for retirement in Canada with the carry-forward RRSP rules. In the States if you can't afford to contribute to your 401K than that's too bad and your contribution room is lost forever.

My American husband and I moved back to Calgary to be closer to my family and to take advantage of the great economy in Calgary and the standard of living. Also, I didn't care too much for the level of violence in Tulsa....everyone down there would tell me what a great place it was to raise kids and I would have to laugh because it had HALF the population of Calgary but DOUBLE the murder rate.

 

[John Galt]

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

 

[Zipper]

If you come over to Ontario from Illinois John, make sure you check your guns at the door.