Planner: FAQ about the snowbird life

Spending half the year down south is more than a vacation, it’s a lifestyle. As you help a client transition from working or retiring up north, to spending winters in fairer climes, make sure you can answer their most common concerns.

Here are some questions your client will probably ask, and some ideas for how to respond.

Q: A snowbird friend of mine had a real hassle driving across the border last year. How can I make sure crossings go smoothly?

A: Border agents have become much more inquisitive. Use your common sense: be polite, answer questions honestly, and have your citizenship documentation ready. And, be prepared to prove you’re not coming to the U.S. to stay — illegal aliens are a big political issue in the U.S., and not just on the southern border. Take a copy of your mortgage, or the deed to your house, or your current property tax bill. These documents will go a long way to proving your permanent home really is Canada.

Q: What’s the best place to go to exchange currency?

A: Generally, the best place to do it is actually online. Western Union and Knightsbridge Foreign Exchange offer competitive exchange rates, particularly for transactions of $10,000 or more. The Canadian Snowbirds Association also offers a convenient currency exchange by pooling your funds with others: by buying in bulk, you get lower rates. Otherwise, credit cards can offer competitive rates — they buy in bulk, so their rates tend to be better, although some can charge higher transaction fees for foreign currency. Whatever you do, avoid hotels and airports. Any place that trades on convenience is certain to have much higher rates.

Q: Is it true I can only stay a certain number of days per year in the U.S.? What happens if I go over?

A: The short answer is, yes. Under current U.S. law, Canadians can visit the U.S. no more than six months (182 days) a year. If you exceed the limit, you’ll be considered a U.S. resident for tax purposes. It’s not the end of the world, but you will be required to report your worldwide income to the IRS, and pay any necessary taxes (Canada and the U.S. have a tax treaty that prevents double taxation). There is also a “substantial presence test:” if you spent 31 days or more in the U.S. in the current year, and the total of all the days in the current year, plus 1/3 of the days in the previous year, plus 1/6 of the days in the second previous year equals 183 or more, you’re required to file a form in order to prove you have a closer residency connection to another country.

Q: I can’t decide whether to rent a condo or go shopping for my own vacation property . . . which is better?

A: Depends on your lifestyle, and your personal financial circumstances. Renting has one significant benefit over owning: the ability to go somewhere else next year. If you’re the type who falls in love with a place and looks forward to putting down roots, then owning makes a lot of sense. But if you want to see other parts of the world, or you worry about getting bored with a place, then renting is pretty hard to beat.

Q: Do I really need medical insurance? I mean, aren’t we covered by our provincial health plans?

A: We are, but coverage is extremely limited. In Ontario, for example, OHIP only covers the first $400 of medical expenses incurred in the U.S. And that doesn’t include ambulance, prescriptions, or auxiliary expenses. So you do need insurance. Medical care costs in the U.S. are sky high. When factored in to the overall cost of your trip, it’s a small price to avoid financial disaster.

Q: What’s the best way to find out where I want to spend the winters?

A: In addition to the common destinations (Florida, Arizona, California), there are many other options (Alabama, Texas, Mexico, Panama, Belize). Start your exploration online—visit forums and blogs. Snowbirds tend to be a pretty vocal community, so chances are you’ll find more than enough first-hand info to clarify your decision-making process.

Q: How can I connect with other snowbirds once I’m there?

A: Most of the traditional Sunbelt destinations (Florida, Arizona, California) have well-established communities of Canadian snowbirds. Unless you’re travelling well off the beaten track, they’ll be hard to miss. In fact, you’d be surprised how many of these groups have set up their own websites and community pages. Check them out before you go and make sure to pre-schedule a few events before you arrive.

Q: I’m all for trying different things, but also like the comforts of home. How can I get the best of both worlds?

A: Most U.S. destinations have all the amenities and luxuries you expect. In more rural or off-the-beaten track locations, you’ll need to be flexible. Most of the traditional snowbird destinations in Mexico have seen development of the same big-box stores and chains we have back home, clearly catering to ex-pats.