It’s that time of year when many Canadian baby boomers, and their northern U.S. cousins, start making plans for their annual move south. The famous Canadian snowbirds have been flying for decades, to their second homes in Florida or California or other points south. But spending part of the year in another country has its tricky moments, and there aren’t that many resources to help them. So recently I went looking for snowbird tips, and I found a valuable source.
It’s called SnowbirdAdvisor.ca, a new website by Stephen Fine, founder of the successful CrossBorderShopping.ca site. And it’s dedicated to helping Canadian snowbirds with all the challenges they encounter when they winter down south, from choosing a location to handling their money, getting insurance and buying a winter home. The site has a deep bench of experts to supply the expertise, and new content is being added all the time. You can sign up for a free membership here.
So I thought I’d share some of the best snowbird tips from SnowbirdAdvisor, to give you a head start on your winter plans. These pretty much cover the waterfront, but for the full story, go to the site itself.
Here are eight smart snowbird tips from SnowbirdAdvisor.
Save money on your air fares
The flights to and from your winter destination can represent a significant part of your snowbird expenses. So it’s worth looking for a good deal when you’re heading south. One good tip is to check prices at alternative airports within reach of your home. You can often find much cheaper fares by flying out of an airport where the airlines are competing hard for passengers (try searching for “all airports” in the online search engine). If you’re a Canadian living near the border, think about flying from a U.S. city – the cost can be lower still, even paying in U.S. dollars.
Generally, you get the best deals by booking your flights at least a couple of months beforehand. But you can still get some good deals closer to takeoff date if you shop smart. Tuesday afternoons are reputed to be the best time to look for cheap fares, but you can find good deals at any time of the week. Avoid flying on Fridays and weekends — the busiest travel days. And consider tracking your desired flights on a site like Airfarewatchdog, which will e-mail you if the price changes.
Explore the U.S.A.
Florida is the number one destination for Canadian snowbirds, hands down. But prices have been rising in hot spots like Palm Beach and Fort Lauderdale. So don’t forget that you can find good weather and the same amenities in other states, and often at a lower price. For example, Arizona and Texas — a lesser-known snowbird destination — have rentals to suit every budget.
It’s also worth looking at states that are just beginning to be popular with northern snowbirds. These include places like North and South Carolina, New Mexico and Alabama, which haven’t seen the same influx of winter migrants as Florida. The living may be cheaper, and since every state has its own climate, you may discover a spot where the weather suits you to a “T”. As well, it’s fun to learn about the cultures of these different regions. Here’s a look at some of the U.S. destinations to explore.
Look further south
If the soaring U.S. dollar is putting a strain on your winter budget, consider looking a little further afield when you’re planning your getaway. A lot of Canadian snowbirds spend their winters happily in places like Mexico, Belize, Costa Rica and Panama, where living can cost significantly less than in the United States. Things like accommodation and food can be much cheaper, and Mexico is one of the few countries whose currency has actually gone down against the Canuck buck.
If you don’t need to be lying on the beach, another option is to spend your time in the milder weather of Vancouver, Victoria or the lower B.C. interior. It’s not Florida, but it is an escape from the ice and snow, and you can even play golf in mid-winter. If you love nature, it’s a great place to be. And best of all, you’re spending Canadian dollars.
Get a U.S. dollar credit card
Handling your finances when you’re in the United States can be expensive. Getting hit with currency exchange fees on your bank and credit card transactions can add to your cost of living. But there are ways to avoid some of these costs. Many snowbirds save money by using a Canadian credit card with no foreign transaction fees, or a U.S. dollar credit card from a Canadian financial institution. The latter can save 2.5 to 5 percent in foreign exchange fees.
Another option is to open a U.S. dollar cross-border bank account with one of the Canadian banks that have branches in the United States. Some of these allow you to transfer money from your U.S. dollar account in Canada to your account in the U.S. without fees.
Cut your long-distance rates
Keeping in touch with family and friends back home is a lot easier these days. But it can still be expensive if you’re making a lot of calls with your cellphone, especially for Canadians. One solution is to ask your phone provider for a flat-rate plan that works in the United States. Another is to buy long-distance cards while you’re down south; the rates can be significantly cheaper than you’ll find at home, even with the currency exchange figured in.
But the cheapest option is to get tech-savvy and call home for free using Skype, or Facetime if you have an iPhone. Internet access is easy to find these days, so if you don’t know how to use these services, it’s time to learn. Of course, if you don’t need to talk live, Facebook is still the number one way for a lot of snowbirds to stay in touch with family on a daily basis.
Know the residency rules
Many Canadian snowbirds think they’re safe from being considered a U.S. resident – and paying U.S. taxes — if they just spend less than 183 days each year in the country. But the residency rules are far more complex. Your residency status is determined using a calculation that combines the current year with the past two years, on a pro-rated basis. If you’ve spent 183 days in the U.S. this year, you may already be over the limit.
There are two ways of avoiding the U.S. tax man if you fail the test. You can try to prove that you have a closer connection to Canada than the U.S. – for example, by showing you have a home, family, and bank accounts in Canada. Or you can file a non-resident tax return and apply for an exemption under the Canada-U.S. Tax Treaty, a more onerous process. The best solution is to know the rules and stay within them. You can learn more about U.S. residency rules here.
Don’t assume you’re invisible
If you think you’re getting away with overstaying in the United States, beware. The Canadian and U.S. governments are working on an integrated system that will track and share all records of border crossings. That will let both governments know exactly how long you spend in the United States each year. And that can have real consequences in terms of eligibility for things like Old Age Security benefits and provincial health insurance.
Right now the Canadian government is only tracking foreign nationals and permanent residents, and only at land crossings. But soon it will be tracking Canadian citizens, and the system will be expanded to include air flights between the two countries. So if you’re cheating on your time out of the country, both governments will know.
Think about buying
Should you rent your winter home or buy? Experts say if you regularly spend four months or more in the same destination every year, you’d likely be better off buying. With prices in southern havens rising, you can get better deals these days by looking in areas outside the traditional hot spots (see above).
Financing a home purchase with a U.S. mortgage can be tricky for Canadians. One solution is to use a Canadian line of credit, which protects you from currency fluctuations: your monthly payments won’t rise when the U.S. dollar goes up. As well, you’re dealing with a Canadian lender – perhaps your own bank – so the application process will be a lot more straightforward.
For a full discussion of the factors involved in deciding whether to rent or buy, check out this article on SnowbirdAdvisor.
Those are my eight smart snowbird tips from SnowbirdAdvisor.ca, and there’s lots more advice on the site. With more and more baby boomers reaching their snowbird years, the need for information will only grow in the years to come. So if you’re a snowbird, here’s one to put in your “favourites” folder.
This is a sponsored post. Cellphone photo courtesy of Wikimedia Commons