A comfortable retirement in Toronto costs $6,000–$8,000/month. CPP and OAS provide about $2,800/month. Bridging that gap requires over a million dollars in savings. Here's what the numbers actually look like — and the non-financial factors that matter just as much.
We want to be upfront: we chose to retire partially abroad, and we think it was the right financial decision for us. But we also know it's not right for everyone, and we think the conversation deserves more honesty than it usually gets. The financial case for retiring abroad is genuinely compelling for most Canadians. The non-financial case is complicated, personal, and deserves equal weight. This post tries to give you both sides of the ledger clearly — so you can make the decision that's actually right for you, not just for us.
Before comparing, you need a realistic picture of what it costs to retire comfortably in Canada in 2026. These are not luxurious lifestyles — they reflect a couple in a paid-off or rented home, with normal spending on food, transport, healthcare top-ups, utilities, travel, and entertainment.
These figures account for housing (rent or strata fees + taxes on a paid-off condo), groceries, dining, transport, utilities, travel, entertainment, supplemental health and dental insurance, and modest discretionary spending. They don't include significant home maintenance, new car purchases, or major healthcare costs — all of which are real retirement expenses in Canada.
A couple where both partners draw average CPP ($925.35/month each) plus full OAS ($743.05/month each) receives CAD $3,337/month gross. After federal and provincial income tax as Canadian residents — at typical effective rates for this income level — they net approximately CAD $2,700–$2,850/month.
Now look at what that covers in Canada's major cities.
⚠️ The savings required to bridge the Toronto gap: At a 4% sustainable withdrawal rate, bridging a $4,225/month gap ($50,700/year) between CPP + OAS and Toronto costs requires approximately CAD $1,267,500 in retirement savings — just to cover the shortfall, not counting the savings themselves. Add emergency reserves, healthcare costs, and home maintenance, and the realistic savings target for a comfortable Toronto retirement is $1.5M+. Most Canadians don't have this.
Now take the exact same couple with the exact same income — average CPP plus full OAS — and look at what happens when they move to a treaty country like Malaysia or Colombia. The Canadian withholding rate drops to 15% (instead of Canadian income tax at 15–20%), and their monthly cost of living drops dramatically.
Even the most expensive popular retirement destination abroad — Portugal — requires dramatically less savings than retiring in Toronto. And in Southeast Asia or Latin America, an average Canadian couple can retire on CPP and OAS alone with little or no savings required beyond an emergency fund.
The financial comparison above is compelling. But retirement isn't only a financial decision — and we'd be doing you a disservice if we pretended otherwise. Here are the non-financial factors, presented without spin in either direction.
Many Canadian retirees don't make a binary choice. Instead, they spend 5–7 months abroad (winter) and 5–7 months in Canada (summer). This approach keeps them under the provincial health coverage threshold (Ontario's 212-day rule), maintains connection to family and friends, avoids the full non-residency tax implications, and still dramatically reduces annual spending compared to year-round Canadian retirement.
The financial trade-off: as a factual Canadian resident (not a non-resident), you pay Canadian income tax on worldwide income rather than the lower non-resident withholding rates. But the cost savings from spending half the year in Southeast Asia or Southern Europe often offset this — and you don't lose OHIP, TFSA contribution room, or your full Canadian social ties.
💡 The snowbird tax trap to avoid: Spending more than 182 days per year in the US as a Canadian can trigger US tax residency under the Substantial Presence Test — a serious problem. The 212-day OHIP rule and the IRS 182-day rule create a tight window for Canadians who want to winter in the US and maintain full Canadian benefits. Mexico, Southeast Asia, Portugal, and other non-US destinations don't have this complication.
There's no universal answer — but there are some clear patterns in who tends to thrive with each option.
The financial case for retiring abroad is, in our view, overwhelming for most average-income Canadian retirees. If your primary income is CPP and OAS, retiring in a treaty country abroad doesn't just save money — it can eliminate the need for significant retirement savings entirely. That changes the whole retirement equation.
But finance is not everything. We miss family more than we expected. We've built genuine friendships in KL, but our deep roots are in Toronto, and no amount of sunshine or great food changes that. What works for us — splitting the year between both — might be the real answer for a lot of Canadians who want the financial benefits without fully severing ties. The binary choice between "stay forever" and "leave forever" is a false one. Most people we know abroad do some version of both.
Ready to explore destinations?
Costs, visa requirements, CPP/OAS eligibility, withholding rates, and honest assessments — all in one place.
Compare All Countries →Sources & Disclaimer: This article is for informational purposes only and does not constitute financial advice. Canadian city costs estimated from Statistics Canada 2024, CMHC rental data 2026, Numbeo Canada 2026. CPP and OAS figures from Service Canada 2026. Exchange rates approximate. Individual situations vary significantly — consult a cross-border CPA and financial planner before making retirement decisions.