Moving to Canada from US with mid-term goal of FIRE

[Josey_L]

My husband and I are considering a move to Kitchener-Waterloo in Ontario from an expensive west coast city in the US. We would be much closer to his family in upstate NY and could likely buy a house in cash there after selling our home, which has appreciated significantly in the last three years.  I would likely have to give up my career as a lawyer, but my husband could transfer to another well-paying tech job.  We wouldn't be making as much money in Canada (likely about 40-50% less), but I think we would be setting ourselves up for a more stable FIRE life if we can get Canadian citizenship and know that healthcare and kids' higher education expenses will be significantly cheaper.  We are in our mid-thirties with a current net worth of $1.2M including about $300,000 in home equity.

This seems like a home run strategy to me, but is there something we aren't considering?  Has anyone made a similar choice?  Any reservation about moving to Canada?  Are their tax consequences I should be researching?

[zoltani]

How do you plan on getting a resident card?

http://www.cic.gc.ca/ctc-vac/getting-started.asp

[zoltani]

If the biggest threat to long term retirement is healthcare costs -- as it is for me -- then I'm thinking your plan makes a lot of sense.  For whatever money you give up by gaining citizenship, I'm thinking you'll get it back with peace of mind and healthcare. 

If someone right now offered me Canadian Citizenship for 250K, I'd buy it right now.  And perhaps it's worth a lot more than that.

The immigrant Investor Program in Canada has been suspended, so you can no longer "buy" residency.

[SoftwareGoddess]

Be prepared to file US tax returns every year for as long as you retain your US citizenship.

To simplify said returns, you may want to avoid certain investments (e.g., mutual funds domiciled in Canada), and you may want to avoid putting money into TFSAs. If you can manage the paperwork yourselves, that's OK, but if you have an accountant prepare the returns, it could cost quite a bit of money.

Have you thought about future Social Security and/or CPP payouts, which depend on the number of years in the workforce?

[Al1961]

If the biggest threat to long term retirement is healthcare costs -- as it is for me -- then I'm thinking your plan makes a lot of sense.  For whatever money you give up by gaining citizenship, I'm thinking you'll get it back with peace of mind and healthcare. 

If someone right now offered me Canadian Citizenship for 250K, I'd buy it right now.  And perhaps it's worth a lot more than that.

The immigrant Investor Program in Canada has been suspended, so you can no longer "buy" residency.

Yep, have to apply based on points under a Skilled Worker Program. If you have degrees, are in your thirties, proficient in at least one official language, and have a job offer, you will score high.

http://www.canada-da.com/calculator.html

[TrMama]

I think your DH will need to secure a job before you'll be allowed to become residents. Although I was born here, so I'm a little fuzzy on the details. I recommend finding an immigration lawyer to help you out.

As for other pitfalls, when I lived in a different part of the country with many international (including American) expats, I learned that when you immigrate with children the kids assimilate much more quickly than the parents and this can cause tension. If you are very attached to the idea of your kids being American, then you may be disappointed when they start acting Canadian and accumulate Canadian life experiences rather than US experiences.

For example, an American acquaintance was very upset that her children didn't get to experience US-style high school football and that they spoke accented English (this was in a French speaking part of Canada). The better adjusted ex-pats were simply happy their kids got to have some different experiences than they'd get at home and didn't seem so concerned that their children's upbringing was different from their own.

[Josey_L]

These are helpful replies.  From my initial research, I think we will be able to score high under the Skilled Workers Program, and my husband's company has an office in the Waterloo area, which is one of the prime reasons why we are targeting that city.  I do wonder about the Social Security program and the CPP, although I hear that there is some agreement between the US and Canada whereby you get credit for years worked under either program.  We haven't really factored social security payments into our retirement plan.  I guess we feel that the program is not a given in the US given our age and the burdens already on that system.

[pbkmaine]

https://www.ssa.gov/international/Agreement_Pamphlets/canada.html

[Josey_L]

https://www.ssa.gov/international/Agreement_Pamphlets/canada.html

Thank you pbkmaine!

[Retire-Canada]

Any reservation about moving to Canada? 

Just be aware that everything here costs more other than healthcare. Everytime I cross the border into the US and buy stuff I am always sure the cash register is broken because my total is so darn low compared to the same stuff at home.

OTOH Canada is a great place to live so it's a reasonable trade off and your US $$ assets you bring here will go considerably farther with our current favourable exchange rate compared to a a few years back when the currencies were closer to equivalent. $1.2M USD = ~$1.6M CAD.

[Al1961]

If the biggest threat to long term retirement is healthcare costs -- as it is for me -- then I'm thinking your plan makes a lot of sense.  For whatever money you give up by gaining citizenship, I'm thinking you'll get it back with peace of mind and healthcare. 

If someone right now offered me Canadian Citizenship for 250K, I'd buy it right now.  And perhaps it's worth a lot more than that.

The immigrant Investor Program in Canada has been suspended, so you can no longer "buy" residency.

Yep, have to apply based on points under a Skilled Worker Program. If you have degrees, are in your thirties, proficient in at least one official language, and have a job offer, you will score high.

http://www.canada-da.com/calculator.html

79 points and that's without a job in Canada.  Anyone know how many points would be considered something like a sure thing to get in?

You need a minimum of 67 points to even be considered. This was recently reduced from 75 points. Realistically, the more points the better.

[jjandjab]

Depending on how much of your net worth is in retirement plans, you may have a big US tax bill. I am not sure of all the specifics, but the US does not let you just move without paying for the tax free money you put away. I would suggest you research this more to see what, if any, impact it will have on your nest egg size. I had a physician partner who was Canadian, lived in the US for 20 years and did very well, but remember him talking about the tax bill and complexity at the time of moving the US based rettirement/IRA assets to Canada.

Also, giving up your US citizenship is really something to think about long term and whether it is worth it. I don't think you can be a dual citizen without some birth connection to Canada - i.e. I think the US makes you choose - but again could be mistaken and hope others can chime in.

Plenty of us are concerned about the current state of things in the US, especially with health care, but like investing, there are many twists and turns over the long term. I never in a million years thought Trump would win as of last summer and now look...

I am willing to bet you could buy a cheap house in Upstate NY - I had a nice 3 bedroom 2 bath house in Syracuse are in 2001-2005 for 100k in a really great blue collar neighborhood - homes in Cicero NY still sell in the mid to low 100ks for similar. State schools in the SUNY system are not expensive for in state residents. Be aware that the colleges/universities in Canada, while near free for citizens, are almost all very large. If your child wants to go to a smaller school, they have many more choices in the US.

Anyway, I have thought about this too and not trying to be discouraging. I am encouraging my teens to make sure to look in Canada and Europe for college. But there are lots of reasons to stick with being US citizens while simplifying by moving to a lower cost of living area.

[TrMama]

Another option if you're mostly concerned about university expenses is to send your kids to school here, even if you have to pay the international tuition rates. It's been a while since I compared, but if I remember correctly, the international rates were still cheaper than the cost of in state tuition in the US. I had at least one US classmate when I was in school who did this. Although keep in mind that the HCOL of many Canadian cities means your child will still have high rent and food expenses.

Quebec has the lowest tuition costs in Canada. Quebec City and Montreal also have low rents. Start your search there.

[Cryocash]

Kitchener waterloo is a good spot for tech (live in waterloo tho)

Good luck getting citizenship. The rules and regs are terrible. Even if you married a Canadian it would take you a long time.

After cost of moving and resetting and everything you think you'll come out ahead? Getting paid in Canadian dollars would be a 25% reduction in pay right off the hop. Ontario also has the highest utility bills of any province.

If you already moving... best pick already hockey team now... (but not toronto) ;)

[FIRE Artist]

Depending on how much of your net worth is in retirement plans, you may have a big US tax bill. I am not sure of all the specifics, but the US does not let you just move without paying for the tax free money you put away. I would suggest you research this more to see what, if any, impact it will have on your nest egg size. I had a physician partner who was Canadian, lived in the US for 20 years and did very well, but remember him talking about the tax bill and complexity at the time of moving the US based rettirement/IRA assets to Canada.

Also, giving up your US citizenship is really something to think about long term and whether it is worth it. I don't think you can be a dual citizen without some birth connection to Canada - i.e. I think the US makes you choose - but again could be mistaken and hope others can chime in.

Plenty of us are concerned about the current state of things in the US, especially with health care, but like investing, there are many twists and turns over the long term. I never in a million years thought Trump would win as of last summer and now look...

I am willing to bet you could buy a cheap house in Upstate NY - I had a nice 3 bedroom 2 bath house in Syracuse are in 2001-2005 for 100k in a really great blue collar neighborhood - homes in Cicero NY still sell in the mid to low 100ks for similar. State schools in the SUNY system are not expensive for in state residents. Be aware that the colleges/universities in Canada, while near free for citizens, are almost all very large. If your child wants to go to a smaller school, they have many more choices in the US.

Anyway, I have thought about this too and not trying to be discouraging. I am encouraging my teens to make sure to look in Canada and Europe for college. But there are lots of reasons to stick with being US citizens while simplifying by moving to a lower cost of living area.

Yes, the US is going to want their capital gains owed on any non-sheltered investments, but I don't think just moving to Canada would trigger this, I think you have to be severing financial ties with the US, like the above mentioned friend.  As a Canadian, I didn't have to do a disposition of my assets when I moved to the UK because I still had to file Canadian taxes, but when I moved to Indonesia I severed financial ties with Canada which triggered a deemed disposition of my rental property and stocks.  I didn't have to actually sell those items but had to value them and pay taxes on the capital gains up to that point when I left.  This reset the book value on my assets for future tax treatment as appropriate when I actually sold them. 

Since US citizens typically have to file US taxes no matter where they are in the world, I don't think they would force an asset sale.  I know that recent changes with US tax laws forced Canadian banks to report on Americans living in Canada.  This caused quite a few permanent residents to Canada to finally get Canadian citizenship and give up their US citizenship due to the hassle, and also due to the US sticking their fingers into the bank accounts of the Canadia spouses of those same US citizens. 

[Nangirl17]

Kitchener waterloo is a good spot for tech (live in waterloo tho)

Can confirm. Live in Kitchener, my husband works in tech in Waterloo. A lot of the companies have forward-thinking policies on work - for example my husband wanted to go to part-time work when our son was born and it was an easy thing to do - he now works 3 days week.

As for the city, we love it. Large enough to have the shopping you need (being Mustashian, likely way MORE!), but small enough that you can drive across it in 20 minutes. Lots of trails, lovely countryside, and thanks to the two universities, lots of intellectual stimulation.

Word for the wise - it is my experience that often Americans who come to Canada have an expectation that this country is the same as the US. The reality is, Canada has a different culture and integration takes work and time. Americans who think that their culture is the best way are politely but openly despised.

All in all, it's a great place to live. Feel free to PM me if you have any questions!!

[Retire-Canada]

Americans who think that their culture is the best way are politely but openly despised.

But, don't worry even when we despise you we will do it politely, eh! ;)

[jjandjab]

Yes, the US is going to want their capital gains owed on any non-sheltered investments, but I don't think just moving to Canada would trigger this, I think you have to be severing financial ties with the US, like the above mentioned friend.

Yes, thanks for pointing that out. I was jumping ahead to the OPs implication of becoming Canadian - since to qualify for healthcare and the super low tuition rates, I do believe you must be a citizen (please let me know if I am wrong here), which would then trigger some tax issues in leaving the US for good.

What does one do for healthcare if they just "move" to Canada? Do you qualify just by paying taxes on income? But in that case you would be paying taxes to both Canada and the US?

[Retire-Canada]

What does one do for healthcare if they just "move" to Canada? Do you qualify just by paying taxes on income? But in that case you would be paying taxes to both Canada and the US?

You can access public health care insurance programs as soon as you are a legal resident. You don't need to be a Canadian citizen.

You will continue to file a US tax return while living in Canada as long as you are a US citizen.

[FIRE Artist]

Yes, the US is going to want their capital gains owed on any non-sheltered investments, but I don't think just moving to Canada would trigger this, I think you have to be severing financial ties with the US, like the above mentioned friend.

Yes, thanks for pointing that out. I was jumping ahead to the OPs implication of becoming Canadian - since to qualify for healthcare and the super low tuition rates, I do believe you must be a citizen (please let me know if I am wrong here), which would then trigger some tax issues in leaving the US for good.

What does one do for healthcare if they just "move" to Canada? Do you qualify just by paying taxes on income? But in that case you would be paying taxes to both Canada and the US?

You would have to file both Canadian and US taxes, however, should not be double taxed.  You would be able to use the taxes paid in either country as credit towards taxes owed in the other.  There are rules regarding which country you pay the taxes to first depending on where the money was earned.  For example, assuming your worldwide income is taxable in both Canada and the US, taxes on Canadian employment earnings would be paid to Canada first, claimed on the US tax form with nonrefundable tax credit given for the taxes paid in Canada.  Since taxes in Canada are higher than in the US, you should not owe additional taxes to the US on those funds.  A rental property in the US would incur taxes paid in the US first, with tax credit applied on the Canadian return for that money, likewise for capital gains for US held stocks, property sales etc. You would owe the difference between US and Canadian taxes to Canada in those cases (I believe the capital gains taxes owed to Canada would only be on the portion of the gains earned since moving to Canada though - more records to keep!). 

From an American now a permanent resident of Canada friend of mine, the Canadian tax forms are a breeze to fill out, but she has to use an accountant to handle the US forms due to complexity.  So expect to need an accountant. 

Becoming a permanent resident is the key to getting public services, not paying taxes.  Permanent residents are treated exactly like Canadians only they can't get a passport or vote.

[SweetLife]

Here is the best tip as this is my field ... Look carefully into how to immigrate to Canada and then do it. It isn't rocket science ... it is ALOT of gathering information sending information and being organized. Which will include getting background checks done/fingerprints etc to ensure you have NO criminality ... Criminality in Canada is much different from US... there are a lot of things that are "felonies" (here called indictable offenses) that are not "serious" in the US ... case in point: Driving under the influence/over the legal limit etc ... if you have ANY criminality you will need to give that information in your application (and/or) get the convictions expunged ... possession, assault etc ... depending on the convictions can keep you out of Canada. So look into this as well... it isn't as easy as buying a house and moving up to Canada :)
Definitely get professional advise re: your investments.
Have fun!

[Josey_L]

Here is the best tip as this is my field ... Look carefully into how to immigrate to Canada and then do it. It isn't rocket science ... it is ALOT of gathering information sending information and being organized. Which will include getting background checks done/fingerprints etc to ensure you have NO criminality ... Criminality in Canada is much different from US... there are a lot of things that are "felonies" (here called indictable offenses) that are not "serious" in the US ... case in point: Driving under the influence/over the legal limit etc ... if you have ANY criminality you will need to give that information in your application (and/or) get the convictions expunged ... possession, assault etc ... depending on the convictions can keep you out of Canada. So look into this as well... it isn't as easy as buying a house and moving up to Canada :)
Definitely get professional advise re: your investments.
Have fun!

Thank you SweetLife--are you an immigration attorney?  Criminality is not a concern for us--we are squeaky clean!  I am interesting in consulting someone regarding the best pathway for application.  My husband's US company has a Waterloo office, so I think there may be a couple of alternative approaches for applying.  But since we want to keep the option of Canadian citizenship open, I am wondering which path makes the most sense.  Also, one poster suggested that it is not possible to achieve dual citizenship without having a birth or family connection to Canada--that doesn't sound right to me, but do you know for sure?

[SoftwareGoddess]

Also, one poster suggested that it is not possible to achieve dual citizenship without having a birth or family connection to Canada--that doesn't sound right to me, but do you know for sure?

Not true in general (dual US/Canadian citizen here), although I understand that it may be denied in certain specific cases.

[GuitarStv]

Be aware that Ontario's medical services don't fully cover prescriptions, eye care, and don't cover dental work at all.

Kitchener-Waterloo is a nice place to live.  Nearby Guelph is a good university town with a nice vibe too.  If you work in tech you will probably make less money in Canada than in the US.

[jjandjab]

From the US State Dept website - although perhaps open to interpretation of what "intent" means:

https://travel.state.gov/content/travel/en/legal-considerations/us-citizenship-laws-policies/citizenship-and-dual-nationality/dual-nationality.html

"A U.S. national may acquire foreign nationality by marriage, or a person naturalized as a U.S. national may not lose the nationality of the country of birth. U.S. law does not mention dual nationality or require a person to choose one nationality or another. Also, a person who is automatically granted another nationality does not risk losing U.S. nationality. However, a person who acquires a foreign nationality by applying for it may lose U.S. nationality. In order to lose U.S. nationality, the law requires that the person must apply for the foreign nationality voluntarily, by free choice, and with the intention to give up U.S. nationality.

Intent can be shown by the person's statements or conduct. The U.S. Government recognizes that dual nationality exists but does not encourage it as a matter of policy because of the problems it may cause. Claims of other countries on dual national U.S. nationals may conflict with U.S. law, and dual nationality may limit U.S. Government efforts to assist nationals abroad. The country where a dual national is located generally has a stronger claim to that person's allegiance."

I was just pointing out that I had read things like this before - if you are a US citizen by birth, without ties to another country, and then voluntarily become a citizen of another nation, you could have your US citizenship revoked.

I would be curious if there is anyone here who has done this  ?SoftwareGoddess? - being a US citizen applying to becoming Canadian, not Canadian to US, or US with a marriage or childhood tie to Canada.

Again, perhaps this doesn't happen much?. Maybe folks stay as a permanent resident? As you can tell, I am interested since my oldest is thinking about going to college in Canada and thinking about staying.

[Josey_L]

Kitchener waterloo is a good spot for tech (live in waterloo tho)

Word for the wise - it is my experience that often Americans who come to Canada have an expectation that this country is the same as the US. The reality is, Canada has a different culture and integration takes work and time. Americans who think that their culture is the best way are politely but openly despised.

All in all, it's a great place to live. Feel free to PM me if you have any questions!!

Thanks, Nangirl.  We will try to keep an open mind and not be too obnoxiously American.  But it is nice to know that if we are despised, we will be politely despised! ;)

[GuitarStv]

"So, last night while sipping on my double double I realized that I was down to my last toonie when picking up a mickey of vodka and a twofer for the weekend. That 'bout nearly caused a kerfuffle at the liquor store, let me tell you! It was my girlfriend's fault, eh? She's such a keener to party, but made me pick up the stuff for her stagette . . . or I'da never been out there freezing my feet off. The Chinook hadn't blown in yet so I was wearing my toque, but I should have put on something warmer than just runners. I ended up getting a soaker outside the store, good thing it's only two klicks from home, eh?"


^ If you can figure that out, you'll be fine communicating with anybody in Canada.  (Except possibly in Quebec where everyone speaks English, but pretends not to . . . or in Newfoundland where nobody speaks English, but they all pretend to.)

[Al1961]

"So, last night while sipping on my double double I realized that I was down to my last toonie when picking up a mickey of vodka and a twofer for the weekend. That 'bout nearly caused a kerfuffle at the liquor store, let me tell you! It was my girlfriend's fault, eh? She's such a keener to party, but made me pick up the stuff for her stagette . . . or I'da never been out there freezing my feet off. The Chinook hadn't blown in yet so I was wearing my toque, but I should have put on something warmer than just runners. I ended up getting a soaker outside the store, good thing it's only two klicks from home, eh?"


^ If you can figure that out, you'll be fine communicating with anybody in Canada.  (Except possibly in Quebec where everyone speaks English, but pretends not to . . . or in Newfoundland where nobody speaks English, but they all pretend to.)

I'm Canadian and I didn't get all of that. You easterners have such a quaint dialect. :-D I roar every time I hear a maritimer say "come from away". (How insular do you have to be for that to be a thing?)

What the hell is a soaker?

[SoftwareGoddess]

I was just pointing out that I had read things like this before - if you are a US citizen by birth, without ties to another country, and then voluntarily become a citizen of another nation, you could have your US citizenship revoked.

I would be curious if there is anyone here who has done this  ?SoftwareGoddess? - being a US citizen applying to becoming Canadian, not Canadian to US, or US with a marriage or childhood tie to Canada.

Yes, I have done it. I'm a US citizen who applied for Canadian citizenship. No marriage or childhood tie.

Again, perhaps this doesn't happen much?. Maybe folks stay as a permanent resident? As you can tell, I am interested since my oldest is thinking about going to college in Canada and thinking about staying.

I think lots of people just stay as permanent residents. Post 9/11, the Canadian government began to require permanent residents to have a new kind of secure travel document in order to re-enter Canada after travelling outside it; before that, I could re-enter just by showing my Landed Immigrant papers. At that point, I decided that I might just as well apply for citizenship and get a passport.

[Goldielocks]

  I do wonder about the Social Security program and the CPP, although I hear that there is some agreement between the US and Canada whereby you get credit for years worked under either program.  We haven't really factored social security payments into our retirement plan.  I guess we feel that the program is not a given in the US given our age and the burdens already on that system.

if you have enough credits earned under each, then you get dual payouts, one from each country.   

I only have 10 credits from the US system, so I might only get credit for 10 canada credits, and paid out in Canada (at lower rates), but I am checking into that.

Good news is that the canadian CPP system is pretty secure for future, although max payout is only around $1200 per month, with the average payout at $600 per month for CPP, and another $547 a month OAS if you live in Canada for enough years first.

[Goldielocks]

Health and Dental insurance.   Remember, not everything is covered.  Only doctors, emergency , hospitals and life-impacting surgeries are covered.


Here is a link showing the rates, for self employed engineers who also want Dental, or extended health (for Rx, although RX is cheaper in Canada, chiropractor, semi private hospital room, etc, ).

Anyway, it is about $500 per month for a family

http://www.manulife.ca/wps/portal/site/engineerscanada/healthanddental/prime/health%20and%20dental/ec_healthdental_default/!ut/p/b1/hVJJcqNAEHzLPECmaUANR1bRLTaxiOVCIMBsYtFIBqzXG8f44oM9dauorKzMjKISKqKSIZubKns045BdP_tkn5pEkhiNYwHweQGIUOMwdzABsNkNEG8A8EOJ4Pv-wfRUIOIDUUSbMCBAVEhFlxyuymguquicIqjVLSGHs6nET1bUIo-3J4yVunRSj52DW2zqzrKDc0knheWQ4na-qG8F7bOTU0qhltldFa-4QmCVq4jdVWFWyBM51ZI1Gg8YAvaYykzDChjX2MLr7cmk1jq6z_vDnUfav2vAP6QJfQAMoHM60AmsCZyUTGGQvRNzZB15vRf4iEf9l_dfzP0nO0IlzaV_WfL-BbzsOZYHCLEcBzgI2c9kku8EvPGPILDPngoBv_8C_BK-pY99ScUbDP0shKN8KgJs6rXvE352T7dFLr6DCpp_i20OnmarB1ZwtU1Bsnx1pGlAmw_fPVotsXw_WDwrcoqzG0iiHO-w63w3hiDPQLDJ5QRGQDyizm28R8odL4p6Tus8aP0whkXLVsVxyFc5dPmr0YDZYASsxSIepG4I37joTVWvr8ag8tUpQD5tVDtLGbVue4d7bJjE7U9SPXDdqe_8SZ3ufcMkYVafxGzw9jc7S5hIDJqjtZbEewQxKOVLCAxHGBVXNxcZHLerDyWqdY8BKw3qKs7Twthf00R9zWH4PmM0IRK1F5qxe0cK1PDSlYy7eip5-B0WSrWiZV5_Rbt8gLY_J_kfauqD2eCIvtD88gGfa33l/dl4/d5/L2dBISEvZ0FBIS9nQSEh/

[SoftwareGoddess]

Reasonable health, vision, and dental insurance may be provided by the (future) employer as a benefit; at least, that has been my experience in the tech sector here. So that's something to look into when you are scoping out jobs.

[TrMama]

Reasonable health, vision, and dental insurance may be provided by the (future) employer as a benefit; at least, that has been my experience in the tech sector here. So that's something to look into when you are scoping out jobs.

This. Any professional level job should offer decent extended health insurance that covers most prescription costs, basic dental and vision plus a few other "nice to haves" like a few massage/physio/dietitian/psychologist visits per year.

Many dual income couples with kids also opt to carry extended health policies from both employers. My DH and I do this and it's meant that we rarely pay for anything (other than the dual premiums) plus when our kids need extra help (orthodontics, mental health visits) the cost is reasonable and we can make care decisions based purely on what's best for the kid vs what we can afford. I do a cost benefit analysis every year and so far we've come out way ahead using this strategy.

[daverobev]

Good luck getting citizenship. The rules and regs are terrible. Even if you married a Canadian it would take you a long time.

4 years. Immig -> PR -> wait -> citizen.

[Nangirl17]

"So, last night while sipping on my double double I realized that I was down to my last toonie when picking up a mickey of vodka and a twofer for the weekend. That 'bout nearly caused a kerfuffle at the liquor store, let me tell you! It was my girlfriend's fault, eh? She's such a keener to party, but made me pick up the stuff for her stagette . . . or I'da never been out there freezing my feet off. The Chinook hadn't blown in yet so I was wearing my toque, but I should have put on something warmer than just runners. I ended up getting a soaker outside the store, good thing it's only two klicks from home, eh?"


^ If you can figure that out, you'll be fine communicating with anybody in Canada.  (Except possibly in Quebec where everyone speaks English, but pretends not to . . . or in Newfoundland where nobody speaks English, but they all pretend to.)

Classic! Did you go to the washroom when you got back, put on your housecoat, and relax on your chesterfield with some ketchup chips after that kerfuffle? Maybe your girlfriend should switch to pop.


(Al1961, a "soaker" is when one steps in a puddle and their shoe gets soaked through so that their foot is all wet)

[jj2]

Thought I'd also say that I live in Kitchener and think it's a great place.  Formerly a blue collar town, it's undergone alot of redevelopment and big shift toward the tech industry.
Just wondering, though, have you checked out the area in person (wasn't sure from your post)? 
Good luck and welcome if you decide to make the move.

[dividendman]

"So, last night while sipping on my double double I realized that I was down to my last toonie when picking up a mickey of vodka and a twofer for the weekend. That 'bout nearly caused a kerfuffle at the liquor store, let me tell you! It was my girlfriend's fault, eh? She's such a keener to party, but made me pick up the stuff for her stagette . . . or I'da never been out there freezing my feet off. The Chinook hadn't blown in yet so I was wearing my toque, but I should have put on something warmer than just runners. I ended up getting a soaker outside the store, good thing it's only two klicks from home, eh?"

Classic! Did you go to the washroom when you got back, put on your housecoat, and relax on your chesterfield with some ketchup chips after that kerfuffle? Maybe your girlfriend should switch to pop.

That's a tough day GuitarStv. Get some comfort from some poutine with a buttertart for dessert.

[Josey_L]

This has been such a helpful and interesting discussion and I am truly grateful to all who have participated and especially those generous enough to help us in our process.    We have plans to visit Kitchener, Waterloo, Toronto, and the surrounding area in early summer to make sure this is a good fit.  In the meantime, I thought it would be useful to summarize some of the things I've learned through this process, in case others are thinking of making a similar choice.

Positives:

• KW is a thriving tech town with good jobs, close proximity to upstate NY, Michigan, and a large cosmopolitan city (Toronto).  KW has good recreational opportunities (though not much downhill skiing). The people are friendly and open, the region punches above its weight in terms of cultural and intellectual opportunities, there are good schools and a low hassle factor (low traffic, has everything you need nearby).  While not cheap, KW is much more affordable than Toronto and other big american tech cities.
• The US dollar is worth ~1.3 Canadian dollars currently, meaning assets sold in the US go much further in Canada.  Selling our home in the US, which has appreciated significantly, could give us the cash needed to buy a home outright in KW.
• Canada has affordable universities and universal healthcare (which varies by Province), though this does not include dental and certain other non-emergency coverage.  Many Canadians purchase supplemental health insurance (one person quoted a plan that costs about $500/month for a family) and some employers offer these benefits.  Healthcare is available to permanent residents and citizens alike, though there may be a delay in getting a health card.  The security of affordable healthcare and education means the ability to achieve FI/RE may be more sustainable and less nerve wracking.
• Parental leave benefits are excellent (one full year of leave--though maybe at partial pay?) and childbirth and related complications are covered
• For young professionals with advanced degrees and fluency in English and/or French, Canada may offer you permanent residency with an eventual path to citizenship.  This site has a good overview of the various paths and options for entry: http://www.canadavisa.com/moving-to-canada-from-the-u-s.html

Negatives:

• KW is COLD. Real winters, real cold.
• Tech jobs in the US pay substantially more, especially considering the stronger US dollar.  Moving to Canada would mean working and saving for longer to achieve FIRE, even if our cost of living is lower. We would also lose some saving and investing potential since I would need to get licensed to practice law in Ontario and get some additional education (I practice in an area of law that is an odd creature of the US tax code and doesn't really exist in Canada).  I may lose a couple of years of earning potential.  However, I am excited by the idea of learning Canadian tax law or other areas of law and even advanced law degrees are relatively affordable in Canada compared to the US.  I see this as an intellectual challenge and opportunity; not necessarily as a negative.
• If you or a family member have a health issue, you may be prohibited from becoming a permanent resident.  Furthermore, if you become a citizen and later want to sponsor a family member, you may need to agree to cover their health expenses for up to 20 years.
• Moving is expensive and international moves are especially complicated.  Many Americans think that Canada will be just like the US, but there are real cultural differences and you will be openly, "but politely", despised if you flaunt your American superiority complex.
• You must be able to interpret the following in order to communicate with the locals: "So, last night while sipping on my double double I realized that I was down to my last toonie when picking up a mickey of vodka and a twofer for the weekend. That 'bout nearly caused a kerfuffle at the liquor store, let me tell you! It was my girlfriend's fault, eh? She's such a keener to party, but made me pick up the stuff for her stagette . . . or I'da never been out there freezing my feet off. The Chinook hadn't blown in yet so I was wearing my toque, but I should have put on something warmer than just runners. I ended up getting a soaker outside the store, good thing it's only two klicks from home, eh?"
• Finally, you must deal with a whole world of tax and accounting hurt as an American citizen living abroad.  If you are not careful, you can experience double taxation and other punitive tax rules especially from the IRS.  Fortunately, the US and Canada have some treaties and tax rules that make this a little easier, but living in compliance with the US tax code while abroad can be a real challenge and may be expensive if you hire an accountant every year.  Some suggest hiring one in the first year and then copying their work in following years if not much has changed.  See my next list for more details.

Other Tax and Retirement Issues:

• Pensions: You can get credit towards social security or the Canadian Pension Plan for time worked in both Canada and the US thanks to the US-Canada Totalization agreement: https://www.ssa.gov/international/Agreement_Pamphlets/canada.html
• Tax-deferred retirement accounts:  As of 2014, the US now recognizes certain Canadian retirement vehicles including RRSPs and doesn't require annual reporting.  Previously, many Americans lost the ability to legally defer taxes on income in those popular retirement accounts.
• Here is a good article on consequences of moving IRAs/401ks into an RRSP, which was made easier in 2012 by a Canadian statutory change: http://www.advisor.ca/tax/tax-news/good-news-for-clients-with-401k-77397
• Some suggest keeping 401ks and IRAs in accounts in the US.  If you have a permanent address (through a parent, sibling, etc.), you can likely keep your US bank accounts and wire money to Canada as needed.  Various US laws make it difficult for anyone living outside of the US to hold US mutual funds and other investment accounts, but ETFs are usually ok and don't have the same restrictions.  In general, don't buy non-us investment funds.  I found some great articles on these topics here: https://thunfinancial.com/american-expat-financial-advice-research-articles/

What did I miss? :D

[Al1961]

Has anyone talked about FACTA compliance requirements?

You'll have to disclose any and all financial assets and accounts held in Canada to the IRS annually. Significant penalties are levied on Americans who do not report all accounts. The penalties are confiscatory in nature and extent. By intent.

https://www.irs.gov/businesses/corporations/summary-of-fatca-reporting-for-u-s-taxpayers

Non-Compliance with Form 8938 Reporting Requirements

If you must file Form 8938 and do not do so, you may be subject to penalties: a $10,000 failure to file penalty, an additional penalty of up to $50,000 for continued failure to file after IRS notification, and a 40 percent penalty on an understatement of tax attributable to non-disclosed assets.

The statute of limitations is extended to six years after you file your return if you omit from gross income more than $5,000 that is attributable to a specified foreign financial asset, without regard to the reporting threshold or any reporting exceptions. If you fail to file or properly report an asset on Form 8938, the statute of limitations for the tax year is extended to three years following the time you provide the required information. If the failure is due to reasonable cause, the statute of limitations is extended only with regard to the item or items related to such failure and not for the entire tax return.

Filing requirements:
https://www.irs.gov/businesses/corporations/do-i-need-to-file-form-8938-statement-of-specified-foreign-financial-assets

[FIRE Artist]

I have another tip for you.  Some banks (Royal bank for sure) will let you hold usd in your investment account right alongside  cnd, so you can buy USD vanguard etfs and hold them in our rrsp or TFSA, you don't have to invest in cnd at all if you don't want to.

Norbert's gambit will be super useful for you to read up on too. 

http://canadiancouchpotato.com/2013/12/03/norberts-gambit-the-complete-guide/

[Goldielocks]

"So, last night while sipping on my double double I realized that I was down to my last toonie when picking up a mickey of vodka and a twofer for the weekend. That 'bout nearly caused a kerfuffle at the liquor store, let me tell you! It was my girlfriend's fault, eh? She's such a keener to party, but made me pick up the stuff for her stagette . . . or I'da never been out there freezing my feet off. The Chinook hadn't blown in yet so I was wearing my toque, but I should have put on something warmer than just runners. I ended up getting a soaker outside the store, good thing it's only two klicks from home, eh?"


^ If you can figure that out, you'll be fine communicating with anybody in Canada.  (Except possibly in Quebec where everyone speaks English, but pretends not to . . . or in Newfoundland where nobody speaks English, but they all pretend to.)

Classic! Did you go to the washroom when you got back, put on your housecoat, and relax on your chesterfield with some ketchup chips after that kerfuffle? Maybe your girlfriend should switch to pop.


(Al1961, a "soaker" is when one steps in a puddle and their shoe gets soaked through so that their foot is all wet)

Not "washroom" that's "bathroom" out here...--  and with those ketchup chips, how 'bout a sandwich on brown toast (hint...not pumpernickel), and a  pop of course, rather than bleh, soda, to wash it down.

[Goldielocks]

I have another tip for you.  Some banks (Royal bank for sure) will let you hold usd in your investment account right alongside  cnd, so you can buy USD vanguard etfs and hold them in our rrsp or TFSA, you don't have to invest in cnd at all if you don't want to.

Norbert's gambit will be super useful for you to read up on too. 

http://canadiancouchpotato.com/2013/12/03/norberts-gambit-the-complete-guide/

When I looked 2 years ago... TD Ameritrade held dual country securities licensing, and you can keep US investments there, while living in Canada.   

DO NOT USE WELLS FARGO  They change their rules / decisions about it frequently, and lock up your money in unusual and deviously confusing ways.

Another thing is that Mortgages work very differently, and are advertised / sold very differently than in the USA.
Canadian banks have good programs for new immigrants, and getting loans, etc is possible right away, unlike the USA (for the most part).
Electronic funds instead of cash payments are more common,  but the US has been changing a lot in the past 10 years.
Cell phone plans are more, but many family activities are less.
Less Tipping, overall (the number of people looking for a tip is less, and the restaurant tipping is slightly less)
Generally all public schools are good, not great. e.g., if there was a scale from 1 to 10, 90% of the public schools range (IMO) from 5-7.  BUT they all have tons of arts, project, collaborative work, science programs, field trips music and library time compared to my experience of California school system.   BUT no or few cafeteria / lunch programs.

[daverobev]

I have another tip for you.  Some banks (Royal bank for sure) will let you hold usd in your investment account right alongside  cnd, so you can buy USD vanguard etfs and hold them in our rrsp or TFSA, you don't have to invest in cnd at all if you don't want to.

Norbert's gambit will be super useful for you to read up on too. 

http://canadiancouchpotato.com/2013/12/03/norberts-gambit-the-complete-guide/

Americans shouldn't be touching the TFSA with a barge pole.

[FIRE Artist]

I have another tip for you.  Some banks (Royal bank for sure) will let you hold usd in your investment account right alongside  cnd, so you can buy USD vanguard etfs and hold them in our rrsp or TFSA, you don't have to invest in cnd at all if you don't want to.

Norbert's gambit will be super useful for you to read up on too. 

http://canadiancouchpotato.com/2013/12/03/norberts-gambit-the-complete-guide/

Americans shouldn't be touching the TFSA with a barge pole.

Yes, good correction, if still filing taxes in the US, the TFSA is not recognized as a tax shelter for US tax. Likewise no one should hold ETFs with US component in a TFSA as US tax is still deducted with no possibility of tax credit.

[RetiredAt63]

"So, last night while sipping on my double double I realized that I was down to my last toonie when picking up a mickey of vodka and a twofer for the weekend. That 'bout nearly caused a kerfuffle at the liquor store, let me tell you! It was my girlfriend's fault, eh? She's such a keener to party, but made me pick up the stuff for her stagette . . . or I'da never been out there freezing my feet off. The Chinook hadn't blown in yet so I was wearing my toque, but I should have put on something warmer than just runners. I ended up getting a soaker outside the store, good thing it's only two klicks from home, eh?"


^ If you can figure that out, you'll be fine communicating with anybody in Canada.  (Except possibly in Quebec where everyone speaks English, but pretends not to . . . or in Newfoundland where nobody speaks English, but they all pretend to.)

Classic! Did you go to the washroom when you got back, put on your housecoat, and relax on your chesterfield with some ketchup chips after that kerfuffle? Maybe your girlfriend should switch to pop.


(Al1961, a "soaker" is when one steps in a puddle and their shoe gets soaked through so that their foot is all wet)

Not "washroom" that's "bathroom" out here...--  and with those ketchup chips, how 'bout a sandwich on brown toast (hint...not pumpernickel), and a  pop of course, rather than bleh, soda, to wash it down.

Bathroom here too, but soft drink, not soda or pop.  I tend to flake out on the couch.   Hmm, local dialects, newcomers need to be careful.

[jjandjab]

Thanks for all the interesting info so far, esp. Software Goddess.

A related question - anyone know someone or have experience with moving to Canada, but still having their primary job in the US?

Without going into great detail, I am a physician in New England who spends every other week (M-F) onsite at a hospital - it is about a 2 1/2 hr drive south to get to my current home with wife and three teens. With a similar drive going north instead, I could be in Quebec (or a bit longer to Ontario) but still keep the same job... Between MD degree, a current job and sizable assets, it looks as if qualifying points shouldn't be an issue. I would likely stay at the same job since it is a really nice position and getting a medical license in Canada would take some time  due to testing, etc.. (although something I might consider)

Just curious what sort of issues this might incur, or if it would be generally similar to the OP situation - moving to Canada from US, progressing to permanent resident status and still paying a combination of US and Canadian taxes.

Just a mental exercise as my oldest child is looking at both McGill and Univ of Ottawa amongst plenty of US schools. And truly my wife and I have always liked Canada, regardless of current politics, having taken many trips over the years.

[TrMama]

Thanks for all the interesting info so far, esp. Software Goddess.

A related question - anyone know someone or have experience with moving to Canada, but still having their primary job in the US?

Without going into great detail, I am a physician in New England who spends every other week (M-F) onsite at a hospital - it is about a 2 1/2 hr drive south to get to my current home with wife and three teens. With a similar drive going north instead, I could be in Quebec (or a bit longer to Ontario) but still keep the same job... Between MD degree, a current job and sizable assets, it looks as if qualifying points shouldn't be an issue. I would likely stay at the same job since it is a really nice position and getting a medical license in Canada would take some time  due to testing, etc.. (although something I might consider)

Just curious what sort of issues this might incur, or if it would be generally similar to the OP situation - moving to Canada from US, progressing to permanent resident status and still paying a combination of US and Canadian taxes.

Just a mental exercise as my oldest child is looking at both McGill and Univ of Ottawa amongst plenty of US schools. And truly my wife and I have always liked Canada, regardless of current politics, having taken many trips over the years.

Check the rate of pay for doctors in QC before you research any further. When we lived there I got the impression that doctors really weren't paid very much. Additionally, the QC medical system appeared to be seriously underfunded and working conditions for doctors (and nurses especially) appeared to be very poor. You will also need to speak french in order to work as a doctor in QC.

OP - When we moved to QC we specifically set aside some money for Winter. So when we had to buy winter tires, block heaters, heavy coats, boots, etc we didn't feel so badly about seeing all that money disappear. We just considered it to be part of our moving budget.

[daverobev]

I have another tip for you.  Some banks (Royal bank for sure) will let you hold usd in your investment account right alongside  cnd, so you can buy USD vanguard etfs and hold them in our rrsp or TFSA, you don't have to invest in cnd at all if you don't want to.

Norbert's gambit will be super useful for you to read up on too. 

http://canadiancouchpotato.com/2013/12/03/norberts-gambit-the-complete-guide/

Americans shouldn't be touching the TFSA with a barge pole.

Yes, good correction, if still filing taxes in the US, the TFSA is not recognized as a tax shelter for US tax. Likewise no one should hold ETFs with US component in a TFSA as US tax is still deducted with no possibility of tax credit.

It's basically a 0.3% extra drag; it is NOT worth changing your asset allocation to avoid. It is better to have VTI in an RRSP, absolutely, but VUN in an RRSP or TFSA will act the same (ie, you HAVE to have the US dom ETF to avoid the lost withholding).

[jjandjab]

Check the rate of pay for doctors in QC before you research any further. When we lived there I got the impression that doctors really weren't paid very much. Additionally, the QC medical system appeared to be seriously underfunded and working conditions for doctors (and nurses especially) appeared to be very poor. You will also need to speak french in order to work as a doctor in QC.

Yes, I have a former partner who is a Quebec native who worked in the US for 20 years then moved back for family reasons - he actually makes very good money, although hours and working conditions are not the greatest. And I would not be looking to become a Canadian physician right away, if at all, but rather just move and still work in the US given my proximity to border.

[Retire-Canada]

And I would not be looking to become a Canadian physician right away, if at all, but rather just move and still work in the US given my proximity to border.

I'll be interested to hear how that works out. I've never known anyone how moved here and didn't plan to work in Canada.