If you’ve ever sat at your kitchen table, calculator in one hand and coffee in the other, wondering whether retiring in Canada or the U.S. would leave you better off—you’re not alone. The truth is, while both countries offer solid retirement programs and benefits, the fine print matters.
Whether you’ve spent your working years hopping between provinces and states, or you’re just starting to think about cross-border living, understanding the differences in pensions, taxes, and healthcare can make or break your retirement strategy.
And that’s where we come in.
With i2 Wealth as your financial planning firm, you get tailored guidance built specifically for people who, like you, are navigating life on both sides of the border. Let’s take a closer look at some of the things you need to factor into your retirement planning decisions.
Let’s Start With the Basics: CPP vs Social Security
If you’ve worked in Canada, you’ve probably seen CPP deductions on your pay stub since your first summer job. That’s the Canada Pension Plan (CPP)—Canada’s version of a government retirement benefit,or Quebec Pension Plan (QPP) for those residing in Quebec. You can start collecting as early as 60, though waiting until 65 (or even 70) increases your payout.
Many Americans, on the other hand, rely on Social Security benefits. Similar idea, different formula. It’s based on your 35 highest-earning years, and you can start collecting at 62 (though, again, waiting pays off).
But here’s where it gets a little tricky: while CPP is based on your contributions, Canada also offers Old Age Security (OAS), which is based on residency, not work history. And if your income is low enough in retirement? You might qualify for the Guaranteed Income Supplement (GIS).
In the U.S., there’s no direct OAS or GIS equivalent. Social Security is it. And unlike OAS, which is funded by general tax revenues, Social Security is funded through dedicated payroll deductions.
What About Retirement Accounts?
In Canada, most people save for retirement using Canadian Registered Retirement Savings Plans (RRSPs). These accounts offer tax-deferred growth, and eventually convert to Registered Retirement Income Funds (RRIFs) once you’re ready to start drawing income—typically by age 71.
You may also have a Tax-Free Savings Account (TFSA). It’s flexible, easy to use, and withdrawals don’t affect your income-tested benefits like GIS. TFSAs are wildly popular north of the border… but if you’re a U.S. citizen or Green Card holder, there’s a catch: the IRS doesn’t recognize them as tax free accounts. Moreover, your cross border accountant may take the position that the TFSA is a foreign trust, requiring additional tax filing disclosures.. That means potential tax headaches unless properly handled.
Meanwhile, in the U.S., your go-to options are likely a 401(k), Traditional IRA, or Roth IRA. The tax treatment varies—Pre-tax accounts offer an immediate tax advantage but are taxed when you withdraw, while Roths offer tax-free withdrawals in retirement.
What happens if you move across the border with one of these accounts? Or both? That’s where things can get murky—and where a good cross-border advisor earns their keep. More than a few get surprised by unexpected tax bills simply because they didn’t plan ahead.
Income Taxes: Who Pays More in Retirement?
Let’s cut to it—Canada vs the U.S., who’s taking the bigger bite out of your retirement income?
It depends.
Canada generally has higher income taxes, especially in provinces like Ontario and Quebec. But you get what you pay for: a publicly funded healthcare system that covers the basics, no monthly premiums required. For many retirees, that peace of mind is priceless.
In the U.S., taxes can be lower—especially in states like Florida, which has no state income tax. But then there’s Medicare premiums, out-of-pocket expenses, and potential gaps in coverage unless you buy supplemental insurance.
And let’s not forget currency. If your income is in Canadian dollars but you’re living in Arizona, exchange rates can work for—or against—you.
Can You Actually Retire Across the Border?
Short answer: yes. Long answer? Only if you do it right.
Can a Canadian retire to the U.S. permanently? You’ll need the right visa or a Green Card, unless you are already a U.S. citizen. There’s no “retirement visa” in the U.S., however, there have been plans to introduce a “Gold Card” program that would provide permanent residency and a pathway to US citizenship for USD$5 million. At the time of this writing (April 2025), the details and potential timeline for this new pathway have not been finalized.
Remember: once you start drawing retirement income from Canadian sources, it may become taxable income in the U.S., depending on your residency and tax treaty treatment. The Internal Revenue Service doesn’t overlook these cross-border transitions.
Same goes for Americans wanting to settle in Canada. While Canada is known for its friendly tone, it still has strict immigration rules. Permanent residency is possible, but it takes time, planning, and an understanding of how government pensions and private retirement accounts are treated across jurisdictions.
Even if you’re splitting your time in the U.S., you’ll need to track how long you’re in each country. Spend too many days in one or the other, and you might trigger tax residency, complicate your access to healthcare, or affect how and where your retirement benefits are taxed. That’s especially important for Canadian retirees collecting CPP or OAS while wintering in the southern states.
Which Country Is Better for Retirement?
There’s no universal answer. For some, retirement in Canada means community healthcare, a cottage by the lake, and proximity to family. For others, retiring in the U.S. means sunshine, no snow tires, and potentially lower taxes depending on the state.
Your ideal retirement also depends on when and how you retire. The retirement age for government benefits varies between the two countries—and the decision to take early, full, or delayed benefits impacts your long-term financial picture in both.
But when your life spans both sides of the 49th parallel, the real goal is to make sure your finances are just as mobile as you are.
How i2 Wealth Can Help
We know how easy it is to feel overwhelmed—especially when the rules don’t match up neatly. That’s why we focus on the kind of financial retirement planning that puts you at the center—not your investment manager, not a product pitch, and certainly not a robo-advisor.
Whether you’re dealing with RRIFs, Roth IRAs, taxable income from government benefits, or just trying to figure out where to call “home” in retirement, we’re the cross-border planning firm that helps you make sense of it all.
Ready to start planning with clarity? Contact us today and take the first step toward a retirement that fits your life—wherever it takes you.