# Moving back to Canada after long absence



## cazaubon (Jan 18, 2011)

Hi, I'm new here, this is my first post. I am getting ready to move back to Canada after an absence of 20 years. Basically all of my working career has been in the US. I do own a condo in Montreal, which is paid off. I am 45.

My retirement funds are currently in a 401K with Vanguard. I am wondering if there is anything in particular I will need to watch out for when I move back to Quebec.

All of my will, POA, advance directive, etc. documents are in English - I am assuming that I should take the English documents to a Quebec notary to have them redone in French and updated to reflect Quebec law.

I expect to be rolling the 401K funds into an IRA and staying with Vanguard. A tax attorney said I had a one-time possibility of rolling my 401K funds into the equivalent of a Roth IRA and the Canadian govt would never tax these funds, but I do not have the means to pay these taxes up front so I can't really take advantage of this (401K is $300,000).

I am planning to go back with a $20,000 cash emergency fund and look for a job once I get there (rather difficult to find another job from 3,000 miles away in California). My 401K is all in equities, I was planning to max out my TFSA every year from now on putting it only in GICs/bonds/non-equities to balance out the volatility in my retirement funds.

Any advice, tips, warnings you can give me? Thanks for reading.


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## kcowan (Jul 1, 2010)

You will not be able to make changes to your Vanguard funds once you have a Canadian address. So make sure they are invested in something long-term.


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## I'm Howard (Oct 13, 2010)

Hopefully you speak Quebecois, if not, get off the plane in TO.

Montreal has changed, in pursuing language purity, the city has become home to people who speak various forms of French from a plurality of nations.

Not sure what your expertise is, that may affect where you decide to settle??

Welcome Home.


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## brad (May 22, 2009)

Wow, your situation is very similar to mine.

I was born in Ontario, my family moved to the US when I was one year old, and I lived in the US until I was 43; then I moved to Québec. I too have a 401(k) with Vanguard.

Our will is in French; we had it done by a notary here. 

On the Roth conversion, I am pretty sure you can spread the tax payments over several years -- when I lived in the States and converted my IRAs to Roth I remember I paid off the taxes over three years. But I'm not sure how that would work in your situation.

Your taxes will be complicated the first year; I'm not sure if you're a dual citizen, but if so you may need to file in both countries (but just pay taxes to Canada and Québec).


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## cazaubon (Jan 18, 2011)

Thanks for the replies! Yes, I am a dual national and I am bilingual French/English. I will also be maintaining an address and bank accounts in the US for the purpose of the Vanguard funds. I guess I need to speak to my tax accountant about possible conversion scenarios.

I have a colleague at work here who files tax returns in both Quebec and California and plan to use his tax accountant in Quebec, since they can handle both Canadian and US tax returns. 

My professional expertise is most recently in telecommunications, but I have enough skills built up over the years to do a variety of jobs, so my job search field is pretty wide. Plus I am hoping that since my home is paid for and my retirement account is off to a good start, I won't be in desperate need of a huge salary. I live quite frugally so I don't need a large income.


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## humble_pie (Jun 7, 2009)

i would have posted that kcowan's warning is accurate, vanguard has no canadian offices, vanguard US offices will not be able to accept instructions from a canadian resident, the 401k will be as good as cut adrift ...

then i saw brad posting here that after many years in canada he still has (in the present tense) a 401k with vanguard.

i know other people usually americans who are permanent residents in canada & they can't pull anything like that off. Brad how do you manage it ...

i myself am a little leery of "maintaining an address" in another country where one is definitely not living. This isn't really a lifetime solution, it's just a kind of bandaid arrangement imho. I don't imagine the authorities will go for it if they find out.


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## brad (May 22, 2009)

humble_pie said:


> then i saw brad posting here that after many years in canada he still has (in the present tense) a 401k with vanguard.


I still have it but am not able to contribute to it. I remember talking with Vanguard and my employer about it before I moved here, and they said I could simply leave it as is and eventually convert it over to an annuity -- there was another posting about that recently here: http://www.canadianmoneyforum.com/showthread.php?t=5863. This is okay, although not being able to manage my portfolio means I can't rebalance etc. but it's not an enormous sum of money.

I've kind of had my head in the sand about this, and about another big issue that the OP will also need to consider: US Social Security versus CPP (or in our case QPP). I worked for ~25 years in the US and paid into the Social Security system; by the time I am retirement age I will have worked more than 20 years in Québec and paid into that system. You can't take benefits from both systems, you have to choose one or the other, according to a friend of mine (another dual national) who has looked into it. One of my to-do items this year is to call the person at the US consulate that my friend consulted with to find out the best approach in my situation.


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## brad (May 22, 2009)

cazaubon said:


> I have a colleague at work here who files tax returns in both Quebec and California and plan to use his tax accountant in Quebec, since they can handle both Canadian and US tax returns.


That's what I do. Before I moved here I contacted the US consulate and they gave me a list of accountants in Montréal who are experienced/qualified to do both Canadian and US tax returns. I use one of the ones from the list and she's done a good job for me. It's expensive, though; my tax-prep bill typically runs about $1,000 but that's for me, my common-law spouse, and my stepdaughter. When I lived (single) in the States I paid $150 to get my taxes done so this is a pretty hefty increase but there's no way I could figure out how to do it all myself, it's too complicated.


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## humble_pie (Jun 7, 2009)

one can't have benefits from both US social security & qpp ? gosh, i didn't know.

i paid into soc security for a few years when i worked in the US. I've never looked into it. In my mind i've written the benefits off because i'm thinking that the bureaucratic hassle of attempting to get such benefits some day won't be worth the effort.

but in my case the years were few & the amounts would be nothing much to worry about. If i had, as you do, and as the OP may some day have, many long years of serious contributions to both systems, it would be pretty distressing to find out that one system would be disallowed. It really does seem most unfair, especially if the payment periods were entirely separate periods of time. For a canadian, it would amount to a serious handicap to working outside canada.

one thing i do know, and that is that canadian old age benefits are pro-rated to the number of years after the age of 18 and prior to the age of 65 that one has actually lived in canada. So that, in a sense, is already a handicap to working outside canada.

(aside to our concitoyen caz en californie) i believe there's a 90-day wait period after arrival in canada before quebec assurance medical takes effect. Believe wait period applies to both returning citizens & new immigrants. Parties usually buy health insurance for this period ...

also, had you thought about checking in with quebec's delegate in california. I have no idea what services they might provide to welcome back their own, but perhaps they'd have an easy solution to the temporary health insurance issue, for example.

Quebec Government
10940 Wilshire, suite 720, Los Angeles, CA 90024, United States +1 310-824-4173 ‎ www.quebec-losangeles.org

(may be necessary to confirm link)


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## brad (May 22, 2009)

humble_pie said:


> one can't have benefits from both US social security & qpp ? gosh, i didn't know.


Well, keep in mind that this is second-hand information, based on what a friend told me who discussed it with someone in the US consulate several years ago. I will know more after I make the calls myself.


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## Karen (Jul 24, 2010)

brad said:


> ...I've kind of had my head in the sand about this, and about another big issue that the OP will also need to consider: US Social Security versus CPP (or in our case QPP). I worked for ~25 years in the US and paid into the Social Security system; by the time I am retirement age I will have worked more than 20 years in Québec and paid into that system. You can't take benefits from both systems, you have to choose one or the other, according to a friend of mine (another dual national) who has looked into it. One of my to-do items this year is to call the person at the US consulate that my friend consulted with to find out the best approach in my situation.


I'm puzzled by this because, as the surviving spouse of an American who spent all his working years in the U.S., I receive my own full Canada Pension as well as my husband's Social Security benefit of $1223 (U.S.) per month, and I have never lived nor worked in the U.S. After my husband died, I had to go in person to the Social Security office in Bellingham, Washington (I live in B.C.) to apply for a U.S. Social Security No. and to fill out the application form for my survivor's benefit. I remember being asked if I was receiving CPP; I said I was and asked if that made a difference and was told that it did not. I wonder if the rules are different for surviving spouses than they are for the individual who earned the Social Security pension; if so, it hardly seems right, does it.


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## MoneyGal (Apr 24, 2009)

brad said:


> You can't take benefits from both systems, you have to choose one or the other, according to a friend of mine (another dual national) who has looked into it.


This is not exactly accurate. The post-retirement social security arrangements in Canada (including Quebec) and the U.S. are harmonized under a binational agreement. You are perfectly able to collect benefits under both systems if you qualify. 

The person to whom you were speaking may have been referring to the provision which allows a person who does not qualify for full benefits in either country to combine credits in both countries to optimize whatever social security payments they receive. 

For example: if you do not qualify for a full SS benefit in the U.S., you may apply to have credits from the time you spent working in Canada applied to the calculation of your US SS benefit. In that case only, your SS benefit is *reduced by* the an amount based on the fact that Canadian payments supported the benefit. However, your Canadian credits remain intact and if you are eligible for CPP based on your work history in Canada, you will still receive CPP. 

What the crediting system provides is a way to harmonize retirement income systems between Canada and the US in a way that provides flexibility for workers and integration for payers. 

Here is a detailed explanation from the US SSA which should hopefully make this much clearer than what I have written: http://www.ssa.gov/international/Agreement_Pamphlets/canada.html


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## brad (May 22, 2009)

MoneyGal said:


> Here is a detailed explanation from the US SSA which should hopefully make this much clearer than what I have written: http://www.ssa.gov/international/Agreement_Pamphlets/canada.html


Thank you so much! I figured you'd know about this and was hoping you'd have some information ;-)


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## MikeT (Feb 16, 2010)

I am in a similar situation. 

I was told by us accountant (and that website seems to confirm) that I needed to work in the US for 10 years (make contributions in 10 separate calendar years) to qualify for benefits, otherwise I could transfer the credits to Canada.

Secondly, my 401k provider allows changes within the 401k by me as a Canadian resident, I'm just restricted from adding any more funds to the 401k. For example, I can and do change mutual funds within the plan. It's not vanguard though so check with them first.


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## brad (May 22, 2009)

MikeT said:


> Secondly, my 401k provider allows changes within the 401k by me as a Canadian resident, I'm just restricted from adding any more funds to the 401k. For example, I can and do change mutual funds within the plan. It's not vanguard though so check with them first.


That may in fact be true as well -- I haven't been able to make any changes via Vanguard's website (I can't even change the address in my profile), but it may be possible to move shares within funds in the portfolio via telephone call to Vanguard.


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## cazaubon (Jan 18, 2011)

Thanks for all the replies! I was aware of the 90 day waiting period for the Quebec health insurance, so I plan to get a private policy to cover those 90 days. Good to hear about the SSI/CPP info, I was wondering about that. With 20+ years of work in the US, I definitely want to receive my SSI payments (assuming they are still paying out by the time I retire!). But I will most likely work another 20 years in Quebec as well, so I am quite interested in what the end result will be. Will check out that web site.


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## urbanlover (May 24, 2012)

Hi Cazaubon, 

I'm in a similar situation and going through lots of questioning on how to best handle my investments. I'm a Canadian citizen who moved to California 10 years ago using TN visas all along. I'm NOT a US citizen nor a green card holder. Recently, I returned to Canada. 

I know it's best to leave my 401K in California, but I'm not sure about my other stock investment portfolio? I'd prefer to leave my stocks (outside 401K, IRA, etc..) in the US and maintain geographical diversity just in case I go back to live in the US in 10 years from now. But before I do that, I'd like to make sure:
1) I won't bet double-taxed by Canada & US when I sell stocks and make a capital gain.
2) Filling 2 tax incomes is not extremely complicated.

If you can refer a good Canada-US tax specialist in the Montreal area, I'd appreciate it.

Thanks!


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## Calgary_Girl (Apr 20, 2011)

My understanding is that if you are a U.S. citizen, you can't contribute to a TFSA because the U.S. government does not recognize the TFSA as a tax-shelter for tax filing purposes?


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## OhGreatGuru (May 24, 2009)

You can contribute to a TFSA, because eligibility is based on residency in Canada, not citizenship. However it will not be considered a tax-sheltered account for US income tax purposes. I don't know enough about the tax consequences for US citizens resident in Canada to say if you would still be money ahead with a TFSA.

PS. A practical difficulty that occurs to me is that T3/T5 slips are not issued for TFSAs. So you might have a hard time figuring our what the earnings are, depending on what it is invested in.

There is a thread here http://canadianmoneyforum.com/showthread.php/11345-US-Citizens-and-TFSAs on US Citizens & TFSA


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