You’re planning an international move, and you’re so excited about the possibilities life there will offer. You’ll be exposed to a different culture, different kinds of food, and depending on where you’re moving, a new language. But there are other important things to consider, too. One of those details you should be thinking about is your finances. You’ll need to manage abroad, possibly on a limited income. Read on to learn some important financial advice before you move to another country.
Funding Your Retirement
Let’s say you’re at least two decades away from retirement. You’re moving to another country for work. You don’t know if you’ll stay there permanently. In fact, you’re not sure where you’re going to live once you do retire.
Bear in mind that in most cases, government-funded pensions (such as CPP or OAS) stop accruing if you become a non-resident. You can still collect them when you’re eligible, though. Also, you won’t be able to contribute to government-sponsored savings plans such as TFSAs, and it’s a bad idea to sock away money in your RRSP if you’re living abroad. Even though you can’t put cash into those accounts, they’ll still continue to grow, no matter where you’re living.
Taxation without Representation
Even if you move abroad, you may still have to pay Canadian taxes. It will depend on where you live and what kind of income you’re earning.
If you meet the definition of a non-resident, you’ll only have to pay taxes on certain types of Canadian source income, which includes money you earn from employment, business or rental properties. The Canadian government taxes Canadian source income at a rate of 25%, although tax treaties and other provisions might lower that amount. A tax treaty is an agreement between two countries that ensures residents of both countries won’t be taxed twice. Practically speaking, it means that if you pay tax in one country, it will be credited to the taxes you would have paid in the other country.
There’s a Will, But Not Necessarily a Way
Even if you’re in great health and in the prime of your life, you want the peace of mind that your loved ones will be taken care of when you’re no longer around. So, you drafted a will and/or undertook estate planning measures.
However, you might discover that your will isn’t valid in another country (or in the worst case scenario, your loved ones will find that out). There’s a good chance that the court system in your new country will only recognized locally drafted estate planning documents – check with a lawyer to be sure.
Orbit International Moving Logistics Ltd: Your International Moving Experts
Are you planning on moving abroad? Call Orbit International Moving Logistics Ltd. today. Our professional, courteous staff will help you through every step of the process. No question is too small. Our customers love us because we provide excellent service – some of them have used our international moving services more than once! Call us at 416-661-4228 to learn how we can help you.
By Adi Shaked