Wednesday, March 5, 2014

Thinking of Becoming a Snowbird in Retirement?

As far as Ontario goes, along with many other areas of North America, 2014 has been one of the coldest, snowiest winters in decades. If you're asking yourself why you have chosen to live in such a frigid climate, you're not alone. We've shovelled.  We've bundled up in layers of sweaters, warm boots and heavy coats.  We've stayed indoors more than usual. It's felt pretty unbearable this year for many people, and no one would blame you for dreaming of blue skies and sunny beaches.

When it comes to retirement planning, many Canadians are already thinking of becoming Snowbirds: Canadians who spend the winter months of each year in a warmer city in another country. Some of the most common destinations are Florida and Arizona. 

There are many benefits to being a Snowbird and avoiding the coldest months of the year in Canada, such as:

1. The increased health, wellness, and mood benefits gained from being able to spend more time outside walking, jogging, golfing, and swimming.

2. The elimination of the very physically taxing activity of shovelling - something that causes overexertion in many people of advancing years. As you may know, this strenuous activity combined with big drops in temperature can increase the risk of heart attacks.

3. The cost of living is often less expensive in places like the United States.

Lise Andreana, CFP with Continuum II, knows that there are many factors to consider in addition to the enjoyable climate.

Taxes: Canadians are allowed to visit the United States for up to a total of 6 months of the year (or 182 days), but if you stay longer than that limit, or longer than 120 days per year, on average, over a 3-year period, you could be considered a U.S. resident for tax purposes.

Healthcare: Where your Canadian health benefits are concerned, each province has a specified number of days throughout the year that you must be physically present in your Canadian home in order to qualify for provincial health benefits such as OHIP. In Ontario, for example, you must be physically present in Ontario for at least 153 days of the year.

Finances: There are considerations when it comes to having the right retirement portfolio to fund your Snowbird lifestyle, and considerations to keep in mind when considering buying a vacation property.

For more of Lise's insights, read her recent contribution to an article on Snowbirds in The Globe and Mail.

In the meantime, let's all hope spring is just around the corner!