What actually happens to your CPP, OAS, RRSP, RRIF, and TFSA when you leave Canada for good — plus how the CRA determines your tax residency, what departure tax you'll owe, when your provincial health coverage ends, and which countries around the world accept your Canadian pension as qualifying income.
The Big Question
Yes — and more countries than you'd think will accept your Canadian pension as qualifying income for a retirement visa. CPP and OAS are both government-issued, lifetime, guaranteed pension incomes — exactly what retirement visa programmes around the world are designed for. Panama, Costa Rica, Colombia, Ecuador, Philippines, and many others explicitly accept CPP and OAS as qualifying income for their retirement visa programmes.
The financial picture for a Canadian couple drawing full CPP and OAS in 2026 is this: maximum combined CPP for two people is approximately CAD $2,728/month ($1,364 each); maximum OAS per person is CAD $743/month (age 65–74) or CAD $818/month (75+). A couple drawing maximum CPP + OAS could receive up to roughly CAD $3,200–$3,500/month gross before withholding taxes.
The real-world picture: most Canadians receive less than the maximum. Average CPP is closer to CAD $750–$900/month per person. Average OAS is near the maximum for those with 40 years of Canadian residence. Many couples supplement with RRIF withdrawals, rental income, or investment income. The key insight is that even a modest Canadian pension — well below the maximums — is enough to qualify for retirement visas in much of Southeast Asia, Latin America, and parts of Europe.
💡 2026 maximum monthly payments (CAD): CPP: $1,364.60/person · OAS age 65–74: $743.05/person · OAS age 75+: $818.23/person. These are gross amounts before any non-resident withholding tax. Contact Service Canada at 1-800-277-9914 to get your personal estimated CPP amount before planning.
Canada Pension Plan
CPP is based on contributions you made during your working life in Canada. It follows you wherever you go — your monthly payment amount doesn't change because you've moved abroad. Whether you retire in Toronto or Thailand, your CPP amount remains the same.
What does change is the tax treatment. Once you become a non-resident of Canada, your CPP payments are subject to non-resident withholding tax. The standard rate is 25%, deducted at source before the money reaches you. However, if you move to a country that has a tax treaty with Canada, that rate is typically reduced — often to 15% or less. Canada has tax treaties with over 90 countries.
In practice: if you move to Portugal, Spain, or Malaysia — all of which have tax treaties with Canada — your CPP withholding rate is reduced. If you move to Ecuador or Costa Rica, which don't have comprehensive income tax treaties with Canada, the standard 25% rate applies. Always check the specific treaty provisions for your destination country before you finalize your plans.
💡 Section 217 election: If the standard 25% non-resident withholding rate on your CPP/OAS is higher than the Canadian marginal tax rate you'd pay if you were still a resident, you can file an optional Canadian tax return under Section 217 of the Income Tax Act. This can result in a refund of excess withholding. It's worth calculating with a CPA, particularly in the first few years after departure.
Old Age Security
OAS continues abroad if you meet the residency requirement: you must have lived in Canada for at least 20 years after age 18. If you've lived and worked in Canada most of your adult life, you almost certainly qualify. OAS is subject to the same 25% non-resident withholding (or treaty-reduced rate) as CPP.
Note the OAS clawback: if your net world income exceeds CAD $93,454 in 2025, your OAS benefit is reduced by 15 cents for every dollar above the threshold. This applies even abroad — it's based on your worldwide income as reported on your Old Age Security Return of Income (OASRI), which you must file annually as a non-resident pensioner unless you live in a treaty country that exempts you.
The Guaranteed Income Supplement (GIS) stops after you have been outside Canada for more than 6 consecutive months. GIS is specifically designed to support low-income seniors living in Canada — it is not portable. If you currently receive GIS, factor this into your financial planning before leaving. For many low-income Canadian retirees, the loss of GIS makes retiring abroad financially difficult without other income sources.
Registered Accounts
Your RRSP and RRIF stay in Canada when you leave. They remain registered and continue growing tax-deferred — the CRA does not force you to collapse them when you become a non-resident. However, withdrawals after you become a non-resident are subject to non-resident withholding tax at source.
This is one of the most important decisions to make before you leave Canada. Lump-sum RRSP withdrawals as a non-resident trigger 25% Canadian withholding with no treaty reduction available. But if you convert your RRSP to a RRIF and take periodic payments instead, the withholding rate drops to 15% in countries with a tax treaty (like Malaysia, Portugal, or Spain). For countries without a treaty, the 25% applies to both. The Canadian law requires you to convert your RRSP to a RRIF by the end of the year you turn 71 regardless.
The practical implication: if you're leaving Canada before age 71, consider converting your RRSP to a RRIF before departing if you plan to draw from it regularly. This can save you 10 percentage points of withholding on every withdrawal in a treaty country — a significant saving over decades.
💡 RRSP contributions as a non-resident: You can technically still contribute to an RRSP as a non-resident if you have remaining contribution room from Canadian-earned income. But without Canadian earned income as a non-resident, you won't generate new RRSP contribution room. Most non-resident retirees are drawing down, not contributing.
⚠️ Plan your drawdown strategy before leaving. Strategic RRSP/RRIF withdrawals while you're still a Canadian resident — paying marginal tax now — can reduce your total lifetime tax burden compared to paying 25% withholding as a non-resident with no deductions. This is one of the most valuable pre-departure planning conversations to have with a cross-border CPA.
Tax-Free Savings Account
You can keep your TFSA after becoming a non-resident — the CRA doesn't close it. Your existing investments continue to sit in the account. However, two important rules apply the moment you become a non-resident:
Rule 1: You cannot contribute to your TFSA as a non-resident. Any contribution made while you are a non-resident is subject to a 1% per month penalty tax for every month the contribution remains in the account. This is a meaningful penalty — don't contribute.
Rule 2: Your TFSA contribution room stops growing. Each year you're a Canadian resident, your TFSA room grows by the annual dollar limit ($7,000 in 2025 and 2026). That growth stops the moment you become a non-resident. Room lost during non-residency is not recovered when you return.
There's also an important country-specific consideration: many countries do not recognize the TFSA as a tax-exempt account. The income and growth inside your TFSA may be taxable in your new country of residence even though it's tax-free in Canada. The US is the most notable example — Americans in Canada are specifically warned against TFSAs for this reason. Check the specific treatment in your destination country with a local tax advisor.
✓ Best move before leaving: Max out your TFSA contribution room before your departure date. Once you're a non-resident you can't add more, but the existing balance can continue to grow in Canada tax-free from the Canadian side. This is one of the easiest pre-departure wins available to you.
CRA Tax Residency
Moving abroad does not automatically make you a non-resident of Canada for tax purposes. The CRA determines your tax residency status based on the residential ties you maintain with Canada — not simply on how many days you spend here. This is a facts-and-circumstances test, not a calendar-counting test.
The CRA considers these the most significant factors. Maintaining any of these after leaving significantly increases the risk that you'll be deemed a factual resident:
A dwelling place in Canada that you own or can return to — a home you haven't sold or a rented property you've kept available to you. Your spouse or common-law partner remaining in Canada. Your dependent children remaining in Canada.
If primary ties are severed, the CRA looks at secondary ties: provincial health insurance coverage (OHIP, MSP etc.); a Canadian driver's licence; Canadian bank accounts and credit cards with high balances; active Canadian investments; memberships in professional, social, or religious organizations; personal property kept in Canada (furniture, vehicles); and a Canadian mailing address.
None of these secondary ties alone will make you a resident. But together they build a picture. A recently departed "non-resident" who still has OHIP, a Canadian driver's licence, a Canadian bank account, and furniture in storage is likely to face scrutiny.
Form NR73 (Determination of Residency Status — Leaving Canada) is a voluntary form you can submit to the CRA to get their written opinion on your residency status. It provides clarity — but it's not binding, and it comes with risks. The CRA may determine you're still a resident, and that determination becomes a documented record. If you've clearly severed all primary ties, you likely don't need it. If your situation is complex (spouse remaining in Canada, keeping a home, etc.), consult a cross-border CPA before filing.
💡 The 183-day rule is a myth — or at least a misunderstood one. While spending fewer than 183 days per year in Canada is generally safer, the CRA's focus is on residential ties, not days. Short return visits to Canada are permitted and don't automatically re-establish residency. What re-establishes residency is re-establishing ties.
Departure Tax
When you cease to be a Canadian tax resident, the CRA treats you as if you sold all your eligible assets at fair market value on the day you left — even if you didn't actually sell anything. Any resulting capital gains are taxable in your final Canadian tax return. This is commonly called the "departure tax" or "deemed disposition."
Non-registered investment portfolios (stocks, bonds, mutual funds, ETFs), shares in private corporations, foreign property, rental properties outside Canada, and certain trust interests are all subject to deemed disposition. The capital gain is calculated as the difference between the fair market value on your departure date and your adjusted cost base.
Three major asset classes are specifically exempt: your RRSP and RRIF (they remain registered and are not deemed disposed of), your TFSA, and Canadian real estate including your principal residence. This means your home, your RRSP, and your TFSA — often the largest assets Canadians hold — are not triggered at departure.
⚠️ Non-registered investments are triggered. If you hold a non-registered investment account with significant unrealized capital gains — a common situation for Canadians who've been investing for decades — the deemed disposition will trigger those gains in your departure year. This can result in a substantial tax bill. This is the single most important pre-departure planning conversation to have with a CPA. Timing your departure, harvesting losses, or restructuring holdings before you leave can significantly reduce this hit.
💡 Form T1161 is mandatory if the total fair market value of property you owned at departure exceeds $25,000. Form T1243 is used to calculate the deemed disposition. These must be filed with your departure year tax return.
Provincial Health Coverage
Provincial health insurance — OHIP in Ontario, MSP in BC, AHCIP in Alberta, and equivalents in other provinces — is tied to residency in your province, not in Canada generally. When you move abroad, you lose your provincial health coverage. The specific timelines vary by province, but most require you to be physically present in the province for a minimum number of days per year to maintain coverage. In Ontario, absence of more than 212 days in a calendar year typically triggers cancellation.
You cannot maintain provincial health coverage as a non-resident retiree living abroad year-round. You will need to arrange your own international health insurance before you leave.
International health insurance from providers like Allianz Care, Cigna Global, Manulife's international division, or local private insurance in your destination country. Costs vary significantly by age and coverage level — typically CAD $3,000–$8,000/year per person for comprehensive international coverage at age 60–70. Many destination countries (Costa Rica, Malaysia, Indonesia, Ecuador) offer very affordable local private health insurance that covers care within the country at much lower cost than global plans.
⚠️ Don't rely on travel insurance. Travel insurance is designed for temporary trips, not for full-time international living. It typically has coverage limits, exclusions for pre-existing conditions, and maximum trip lengths that don't suit a retiree living abroad year-round. You need a purpose-built international health insurance plan or enrollment in your destination country's private health system.
Financial Planning
The honest answer varies enormously by destination. The 25× rule (nest egg = 25× annual spending) is a reasonable starting framework, but it doesn't account for CPP/OAS as a floor of guaranteed income. For Canadians with meaningful pension income, the nest egg requirement can be much lower than a pure savings-based retirement.
A useful Canadian-specific framework: calculate your guaranteed lifetime income first (CPP + OAS, net of withholding), then determine how much additional spending your target lifestyle requires above that floor, and only need to fund the gap from savings. A couple drawing CAD $3,000/month combined from CPP/OAS — roughly CAD $2,250/month after 25% withholding — living in Malaysia at $2,000/month needs essentially zero savings beyond what covers emergencies, healthcare, and occasional travel.
Based on a couple drawing near-maximum combined CPP + OAS, net of 25% withholding. Actual withholding may be lower in treaty countries. Assumes no RRIF or investment income. Illustrative only — not financial advice.
💡 RRIF withdrawals tip: Many Canadian retirees supplement CPP and OAS with RRIF withdrawals. These are subject to Canadian withholding (25% lump sum or 15% periodic in treaty countries) plus potentially taxed in your new country of residence. Model your net after-withholding RRIF income carefully. The 15% periodic RRIF rate in treaty countries is significantly more efficient than the 25% lump-sum rate.
The Options
The key factors that make a country work well for Canadians specifically: the retirement visa programme explicitly accepts CPP/OAS, the income threshold is achievable on typical Canadian pension income, there's an existing expat community or infrastructure, and the country has a tax treaty with Canada (ideally reducing withholding below 25%).
💡 Tax treaty bonus: Canada's tax treaties with Malaysia, Philippines, Portugal, Spain, Mexico, UK, Australia and many others can reduce your CPP/OAS withholding rate to 15% or less — meaning significantly more money in your pocket every month vs. the standard 25%. Check the CRA's published treaty withholding rates for your specific destination before deciding.
Action Plan
Based on everything above, here are the key actions to take — roughly in order of when to do them. Start 12–18 months before your intended departure date for the most complex items.
Ready to pick a destination?
Compare 20 Countries Built
for Canadian Retirees
Costs, visa requirements, CPP/OAS eligibility, healthcare, and honest Two Sheep assessments for every destination.
Explore All Countries →Disclaimer: This guide is for informational purposes only and does not constitute financial, tax, or legal advice. Tax laws, CRA rules, visa requirements, and pension amounts change — always verify current information with a qualified cross-border CPA, immigration lawyer, and Service Canada directly before making any decisions. Clara and Fran are not financial advisors. Sources: CRA canada.ca, Service Canada, Money.ca, WealthNorth, Globe and Mail (2025–2026).