Hello Mustachians!
My apologies in advance for the dramatic title but I am in desperate need of some help starting my FIRE up here in the great white north.
I am a US citizen living in Canada for the past 10 years. I have a cushy job (about 60-80K gross income/year depending on bonuses) and my cost of living is reasonable with room for improvement:
- Rent: 500/month
- Utilities: 100/month
- Food: 700/month (I rarely eat out but do make an effort to buy organic/local)
- Car, gas, insurance: 200/month (I know...but it rains here a lot)
- Fun and Hobbies: 300/month (I am working on this with my therapist [read: girlfriend])
- Travel 250/month (mostly visiting family across the country and overseas).
I am able to squirrel away a pretty good chunk of income but my problem is finding tax efficient (essentially mustachian) place to put it being that I have to file both US and CDN taxes.
From my investigation so far it looks like the best first step is to max out RRSP contributions as these have favorable tax treatment in the US and Canada.
After the RRSP though things start to get more challenging. PFIC rules make Canadian investments held in non-registered accounts tax prohibitive (all gains are taxed as income each year). There are all sorts of investment vehicle acronyms which are all but off limits for this reason: TFSAs, RESPs, REITs, and so on.
It seems like the best approach is to exchange currency and invest via a US account. From what I can tell so far the downsides are currency risk, exchange costs, and potential challenges when withdrawing funds while in Canada.
Has anyone taken this approach with success? If so how did you do it? If not, are there any fellow ex-pats in Canada that feel that they have a successful alternative?