How to Retire Abroad from Canada

Many Canadians who want moderate climate prefer to retire outside Canada.

Are you looking for a place to retire abroad from Canada? You are not alone; many baby boomers are nearing retirement age. Many people consider retirement with the good life: no more job schedules, early mornings, or stressful commutes.

Others choose an easy way of life, with a relaxed pace and days filled with interesting hobbies. However, many new retirees are unsure whether they should stay or relocate.

The key question becomes where to go. When deciding where to spend your golden years, consider the cost of living, climate, housing costs, and healthcare.

This post essentially will address your questions regarding retiring outside of Canada. Furthermore, you will learn about the benefits to which you are entitled when you retire abroad from Canada, as well as how to obtain medical treatment even if you are working and retiring outside of Canada.

Your benefits when you retire abroad from Canada

There are basically two pension benefits for Canadians who decide to retire abroad from Canada. On the one hand, Old Age Security (OAS) is a monthly payment available to Canadians over the age of 65.

On the other hand, there is the Canada Pension Plan (CPP) which is also a monthly payment. However, when it comes to CCP, only people who have contributed to the CPP during their working years will get the benefits. 

Old age security for Canadians who retire abroad outside Canada 

As mentioned earlier, the Old Age Security (OAS) pension is a monthly payment you can get if you are 65 and older. Sometimes, it can come automatically, however, you must have to apply to avoid being denied the benefits. In most cases, you do not have to apply to get this benefit.

Old Age Security pension amount

Normally, you will receive up to $635.26 per month (October to December 2021 maximum monthly payment). However, the amount will depend on how long you lived in Canada before departing after the age of 18. For instance, if you have lived up to 49 years, you’re eligible for the full benefits. However, if you live for only 20 years, you will only get half of the benefits.  

Meanwhile, you must pay tax on the Old Age Security pension payment.

Requirements to receive your OAS pension outside of Canada

To receive your OAS outside  of Canada, you must: 

  • be 65 years old or older
  • have resided in Canada for at least 10 years since the age of 18
  • be a Canadian citizen or a legal resident at the time we approve your OAS pension application
  • have been a Canadian citizen or a legal resident of Canada on the day before you left Canada
  • have resided in Canada for at least 20 years since the age of 18

Canadians working outside Canada for Canadian employers

If you are a Canadian working outside Canada for a Canadian employer, your years outside of Canada will be counted for your as a resident of Canada. For instance, if you are working for the Canadian Armed Forces and banks, your time working abroad will be counted as residence in Canada.

However, if you want to qualify for the OAS benefits, you must do either of the following:

  • return to Canada within 6 months of ending employment
  • turn 65 years old while still employed and maintaining a residence in Canada during your time outside of Canada

In addition, you must provide the following 2 documents:

Perhaps, your spouse, common-law partner or dependent working abroad for international organizations. Under certain conditions, their time working abroad may count as residence in Canada. 

Sometimes, this may not apply to you, however, you may still qualify for the Old Age Security pension, a pension from another country, or from both countries if you have:

  • lived in one of the countries Canada has established a social security agreement 
  • or
  • contributed to the social security system of one of the countries with which Canada has established a social security agreement.

How to apply for OAS

To apply for OAS if you want to retire abroad from Canada, you have to follow the steps below:

  1. Determine if you need to apply
  2. Decide when you want your OAS to start
  3. Submit your application
  4. Receive a response from us
  5. Review your application status
  6. If you disagree with the decision

Taxes on Old Age Security pension payments if you retire from abroad in Canada

Of course, you must pay your tax even as a person who wants to retire abroad from Canada. In other words, your Old Age Security pension payments are taxable income. However, this time around, your taxes won’t be automatically deducted each month. There, you may demand that federal income tax be deducted from your monthly payment by:

  • signing in to your My Service Canada Account or
  • completing the Request for voluntary Federal Income tax Deductions CPP/OAS form (ISP-3520OAS) form and mailing it to us or dropping it off at a Service Canada office

Moreover, if you fail to pay your tax monthly, it will be collected quarterly.  

Canada Pension Plan (CPP) for those who want to retire abroad from Canada

Just like the OAS, this is also a retirement pension that you will receive monthly. There are also taxes on the benefit that replaces part of your income when you retire. Once you qualify for the CCP, you will receive until you die. Therefore, if you are planning to retire abroad from Canada, yo qualify for CCP,  you must:

  • be at least 60 years old
  • have made at least one valid contribution to the CPP
  • Valid contributions can be either from work you did in Canada or as the result of receiving credits from a former spouse or former common-law partner at the end of the relationship.

How to apply for CCP

Unlike the OAS where you have options on whether to apply or not, however, you must apply. Therefore, it is not automatic. Meanwhile, you must apply in advance.  Thus, the government will pay your CPP retirement pension in the month of the start date you choose.

Eligibility for CCP

To qualify for a Canada Pension Plan (CPP) retirement pension, you must:

  • be at least 60 years old
  • have made at least one valid contribution to the CPP

How much you can receive

Generally, the amount you will receive as benefits of your CCP depends on different factors, such as:

  • the age you decide to start your pension
  • how much and for how long you contribute to the CPP
  • your average earnings throughout your working life

As of 2021, you may receive the maximum amount of $1,203.75 as a new recipient. However, you must turn 65 to start receiving your pension. More so, the average monthly amount in June 2021 is $619.68. However, the amount you will receive depends on your situation.

Medical care outside of Canada

As a Canadian staying outside Canada for a long time, you can have access to Canadian medical care outside Canada. However, since medical care is covered by provincial and territorial governments, you will be covered by the medical care of your province or territory. Therefore, you will have to contact your province once you want to travel outside Canada for a longer period of time. 

Moreover, if you plan to retire abroad from Canada, you must find out the following:

  • how often do you need to return to Canada to keep your coverage
  • how much of your health care costs while outside of Canada will be covered by your provincial or territorial health care plan
  • who to contact if you need medical care while outside of Canada

Provincial and territorial health departments and agencies

Usually, all the provinces and territories of Canada have their own medical care. Therefore, you can have medical care from all the provinces in Canada. They include: 

Buying private health insurance

When you are not able to secure a provincial health care plan, you can apply for private travel health insurance to make sure you have enough health insurance coverage while you’re outside of Canada.

However, if you are employed, check to know if your employer already has a health plan for you. Still, even if you have an employer-sponsored health care plan, you will check with your employer to see if you’re covered for medical care outside of Canada.

Specialized medical care

Most times, you may want special medical care outside Canada. However, make sure that special care is available in the country you are visiting. Therefore, you must look at your health insurance policy carefully to see if it covers the cost of special medical care you need outside of Canada. 

Why you should buy travel health insurance 

While travelling outside Canada, you may need to buy new travel health insurance. Therefore, the following are the reasons you may need a new travel insurance plan. 

  • Your Canadian health insurance may not pay your medical fees while you are outside Canada
  • Your provincial or territorial health plan may cover none, or only a small part, of the costs of your medical care abroad. It will never pay your bills upfront
  • Foreign hospitals can be very expensive and may require immediate cash payment
  • In some countries, hospitals and clinics will not treat you if you do not have enough insurance or money to pay your bills
  • The Government of Canada will not pay your medical bills