Lifestyle | Prepare your finances to work in the United States

Going to work in another country for a few years is an enriching experience, but it also comes with several personal finance elements to manage. The ideal is to take the time to prepare for it and find a trusted person to be accompanied.

The situation

Philippe*, 31, works in a government research laboratory. He is in a relationship with Sévrine*, 27, a Frenchwoman who realizes his doctorate in Quebec. She is preparing to go on a postdoctorate of three years in the United States which will bring her US $ 65,000 per year.

Philippe plans to leave his post and leave with him. He intends to request a work permit and find a job for these three years. The couple intends to come back to settle in Quebec thereafter and buy a property in five years.

Philippe, who earns $ 65,000 per year, intends to transfer his retirement plan to determined benefits in a immobilized retirement account (CRI). He would thus have $ 40,000 that he would invest 80 % in shares and 20 % in bonds. He also has $ 50,000 in his tax -free savings account (CELI), with the same asset distribution, and continues to invest $ 10,000 per year.

“I wonder if I should continue to contribute to my Celi while I am in the United States,” he said. Would I better open a celiapp in anticipation of the purchase of our property? »»

Philippe also has $ 10,000 in his operations account and as he does not already have his job in the United States, he plans to get into it at the start.

However, he worried about the consequences of these three years in the United States on his retirement. “Will there be a financial impact due to the fact that I will stop contributing to the Quebec City Plan (RRQ) during this period?” »»

The advice

It is a very good thing that Philippe and Sévrine ask themselves these kinds of questions before leaving, in the eyes of Léa Saadé, regional vice-president, Montreal and Rive-Sud, Ig Heritage Management. “There are several things to think about in a situation like theirs and you have to be well accompanied to make sure you do things correctly,” she said.

Tax harmonization and annuities

The couple will have to count meticulously on the days they spend in the United States in the year they settle there.

“As long as they are at least 183 days a year in the United States, they are considered to be tax residents, so they will have to produce a tax return there,” says Olivier Mercier, a financial planner at IG Patrimoine. If they settle there in September, they will not reach them in 2025, but in 2026. “

“An agreement has been signed with the United States and several other countries to ensure fiscal harmonization, that is to say that if the income declarations are well made and deposited in time, they will avoid the double Canadian and American taxation,” explains Léa Saadé.

The RRQ Social Security Office also allows the harmonization of public pension plans in several countries, including the United States.

Philippe must also know that to calculate his pension to retirement, the RRQ is based on the average of eligible income since the age of 18, but automatically has excluded calculation 15 % of the least remunerative years.

Contribute as much as possible in Celi before leaving

An important element to know before leaving Canada is that you cannot contribute in its Celi without being a Canadian resident.

“Considering that Philippe will not be able to invest in his Celi when he is in the United States and that he will not have any fees of contributions that will accumulate, he should invest what he can by what he leaves,” says Olivier Mercier. If he contributes anyway when he is in the United States, these sums will become excess contributions and he will have to pay 1 % of tax per month on the amount contributed. »»

Open the Celiapp before leaving the country and contribute later

For Celiapp, it’s the opposite! “To open it, you have to be a Canadian resident and not have owned the past four years, but once it is open, you can contribute to it even if you leave the country,” explains the financial planner. It is therefore very important that he opens it before leaving and he can contribute throughout the time he is in the United States. »»

To withdraw the sum of his celiapp and invest him in his property, however, you must be a Canadian resident.

Transfer the pension fund to a cry

For the pension fund, the idea of taking the amount offered by the employer and placing it in a cry seems to be interesting for Philippe, in the eyes of the financial planner. “As it has a fairly high risk tolerance and it will place this sum at 80 % in shares and 20 % in bonds, it can expect a good return and also, later, it will be able to control what it comes out as taxable income,” he explains.

On the other hand, he advises him to think about what he wants to do on his return from the United States. “If it is possible that he returns to work in the public, it would probably be more advantageous to keep his retirement fund and continue to contribute later in order to receive a pension on his retirement which will be assured for the rest of his life. »»

Look for a job before leaving

Léa Saadé advises Philippe to start actively looking for a job now in the United States.

“Several job interviews are online and if he explains his situation, employers will understand why he does his job search from Canada,” she explains. The goal is that he can work quickly when he arrives to touch his emergency fund as little as possible. »»

* Although the case highlighted in this section is real, the first names used are fictitious.