No wonder retirees move to cheaper countries

I follow a few facebook and youtube groups of expats and retirees who use their government retirement benefits to make a better life for themselves in a less expensive country, and some have posted their income from those sources. 

I noticed that the Americans seem to get a lot more income than Canadians, so I did some digging.

Ruth and I will be 65 on our next birthdays, and that's the around the normal time that most people start collecting retirement benefits in Canada. 

In Canada, we have two public retirement benefits... the Canada Pension Plan (CPP) and the Old Age Security (OAS). The CPP you have the option of taking as early as age 60, although at a reduced rate. Or you can take it as late as age 70 at a much higher rate. The OAS cannot be taken until 65, and as late as age 70, again at a higher rate. Or anywhere in between those ages.

(In order to compare apples to apples, the following figures are all in $CAD equivalent!)

The average Canadian retiree gets a total of $19,550 per year between the two benefits. 

The average American gets $34,300 per year!

That's a huge 70% difference!

But there are a lot of variables, and so while those numbers look striking at first glance, a direct comparison is difficult.

The major distinction is health care. A Canadian retiree might still spend $500 a year on medical expenses in Canada while an American retiree might spend $6,500 a year.

Taking that into account, the American system still wins, as far as retirees are concerned. Especially if you are a healthy retiree.

And if you are a healthy American retiree, it totally makes sense to get the heck out to a cheaper country! It's a more difficult decision for Canadians because of that "free" health care carrot waved in front of you. Most Canadians are obsessed with that incentive to remain in Canada, at least long enough to continue to receive that benefit. All provinces are different, but most Canadians can maintain their healthcare benefits by staying within their province of residence for five to six months per year.

And as a couple, you can do really well! The average retired American couple gets the equivalent of $53,000 CAD per year in government benefits. Figure that 2026 is our most expensive year yet, and that's about what we'll spend. We think we lived a really good life on that amount of money this year. 

Of course we also have to remember that taxes come into play, further complicating things. 

Ruth and I are not yet receiving benefits, so we are currently living off savings. We've decided to wait another couple of years and take the guaranteed annual increase of 8% or so. Retirement planning is difficult when you don't know exactly how long you're going to live!

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And in Canada...

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