What actually changes
The first surprise is that leaving Canada for tax purposes is not a form you file. Tax residency is a facts test: where your home is, where your spouse and dependants live, where your ties are. Sell the house, move the household and settle abroad and you likely become a non-resident; keep a home and a life here and you may still be a Canadian resident no matter what the calendar says. The facts decide, not the intention.
Once you are a non-resident, the machinery changes. You generally stop filing a regular Canadian return on your Canadian pension and registered income. Instead, Canada takes a flat withholding tax off the top of payments like RRSP and RRIF withdrawals, and for many people that flat rate is the whole Canadian bill. Whether that works out better or worse than resident brackets depends entirely on your numbers.
And one quiet casualty: the TFSA. Canada will keep treating it as tax-free, but most destination countries do not recognize it and simply tax its growth like any ordinary account. In practice, for many destinations, the TFSA loses its tax-free status the day you truly move.
What the rules say
Departure tax comes first. On the day you emigrate, Canada treats your non-registered investments as if you sold them at that day's value, a deemed disposition, and taxes the built-up gains on your way out. Nothing actually gets sold, but the tax bill is real, and for someone with a large non-registered account it can be the biggest single number in the move.
RRSPs and RRIFs are not part of the departure tax. They stay intact, and withdrawals as a non-resident face a flat withholding tax: 25% by default, reduced by tax treaty with some countries. A 15% rate is common under treaties, Portugal being one example. Because the rate depends on where you land, the destination changes the retirement math, not just the weather.
The government pensions are friendlier than people fear. CPP is yours and can be paid anywhere in the world. OAS can also follow you abroad, with one catch worth knowing early: to keep receiving OAS indefinitely outside Canada, you generally need 20 years of Canadian residence after age 18. Fall short of that and OAS stops after a stretch abroad, which is exactly the kind of detail worth confirming with Service Canada before booking the one-way flight.
The snowbird halfway option
Plenty of people discover they do not want to leave Canada, they want to leave January. Spending winters somewhere warm while staying a Canadian resident skips the departure tax, keeps the TFSA tax-free and keeps provincial health coverage, but it comes with its own two lines to watch.
The first is American: the US substantial presence test counts your days over a rolling period, and around 183 days is where trouble starts, so long-stay snowbirds track their days carefully. The second is Canadian: provincial health plans require you to actually live in the province for roughly five or more months a year, with the exact rule varying by province. Inside those lines, snowbirding buys most of the sunshine with a fraction of the paperwork. Travel health insurance for the months away is the recurring cost that makes it honest.
What people in this situation weigh
The tax rules are the knowable part. These are the questions that actually decide it.
- Healthcare: provincial coverage does not follow you abroad, so the destination's system, private insurance costs and insurability at 75 belong in the plan, not in the fine print.
- Family distance: grandchildren grow up on someone else's schedule, and the flight home gets longer every year you age.
- The return trip: many people move abroad in their 60s and come home in their 80s, when health and family pull hardest. A plan that only works if you never come back is a fragile plan.
- The destination's own rules: its taxes on your Canadian income, its residency visas and its currency swings sit outside any Canadian tool, and they can outweigh everything above. A cross-border tax professional earns their fee here.
- The halfway test: a few long winters abroad before selling anything is the cheapest possible research.
A worked example
Sylvie, 66, is weighing a move to Portugal and plans to draw $40,000 a year from her RRIF. As a non-resident under the default rule, Canada would withhold 25%, which is $10,000 a year. Under the Canada-Portugal treaty rate of 15%, the withholding drops to $6,000, and for her that flat amount replaces Canadian bracket tax entirely. What Portugal itself taxes on that income is a separate question outside the Canadian side of the math, and it belongs to a cross-border professional.
Modelled with the same non-resident withholding rules the TruePath engine applies.
How TruePath fits in
TruePath's retire-abroad scenario models the Canadian side of becoming a non-resident: flat treaty withholding on RRSP and RRIF withdrawals instead of Canadian brackets, the departure tax on non-registered gains, the TFSA treated as losing its registration and CPP and OAS continuing. You can set your own treaty withholding percentage to match your destination. A separate snowbird scenario models three months a year in the US, including visitor health insurance as a cost. The destination country's own taxes, currency and residency rules are outside the model, so treat results as an educational estimate and involve a cross-border tax professional before acting.
Related questions people ask
Do I lose CPP and OAS if I leave Canada?
CPP, no: it can be paid anywhere in the world for life. OAS can also be paid abroad, but receiving it indefinitely outside Canada generally requires 20 years of Canadian residence after age 18. With fewer years, OAS stops after a period abroad, so it is worth confirming your own count with Service Canada before committing.
What is departure tax?
When you emigrate, Canada treats your non-registered investments as sold at their value that day and taxes the accumulated gains, even though nothing was actually sold. RRSPs and RRIFs are not part of it; they are handled later through withholding tax on withdrawals instead.
What happens to my TFSA if I move abroad?
Canada keeps treating it as tax-free, but most destination countries do not recognize the TFSA and tax its growth like a regular account. In practice, for many destinations it loses its advantage, which is why planning tools often model it as becoming a non-registered account on departure.
How much tax do non-residents pay on RRSP withdrawals?
A flat withholding of 25% by default, reduced by tax treaty with some countries. A 15% rate is common under treaties, Portugal being one example. For many non-residents that flat withholding is the final Canadian tax, replacing bracket-by-bracket filing.
Can I just spend winters abroad instead of moving?
Yes, and many people land there. Staying a Canadian resident avoids departure tax and keeps the TFSA and provincial health coverage, as long as you respect two lines: the US substantial presence test around 183 days, and your province's residency requirement of roughly five or more months at home, which varies by province.
Sources
This page is general education about Canadian retirement rules, not personalised financial advice. Figures are for the 2026 tax year and change with government updates.