Canada has plenty of beautiful landscapes and vistas on offer to match Germany's Alps and sea views. But the Federal Republic's cultural offerings and easy European travel connections can still tempt plenty of Canadian pensioners looking for a place to settle down for their Golden Years.
According to population data from Germany's statistical agency, there were just over 18,000 Canadian nationals registered as living in Germany at the end of 2023. Around 3,500 of those - or just under 20 percent of all the Canadians residing in Germany - are aged 60 or over.
READ ALSO: Canadians in Germany: Who are they and where do they live?
So how do Canadian retirees living here support themselves?
Many are likely to have a nest egg saved up, but pension entitlements may also make up an important part of retirement income and planning. Also, knowing these amounts is crucial for calculating how much you have to pay for things like health insurance.
As non-EU nationals, Canadians looking to retire in Deutschland would need to apply for a retirement visa and register their residence.
You'll also have to register for public health insurance if you don't have available private coverage, with required contributions based on your income. Note that this calculation will be on any income you have - not just your pension. There's no hard or fast rule on how much you should have in Germany, but you should certainly be taking in more than the poverty line, which is €1,200 a month.
How much you need to have may depend on where in Germany you choose to live - with cost of living in your local area taken into account.
So how does receiving a Canadian pension in Germany work?
EXPLAINED:Â Do your pension contributions abroad count in Germany?
Can you collect your Canadian pension in Germany?
In theory, yes. But there are some clear and stringent conditions attached.
In principle, it is difficult to collect your Canadian pension if you live outside of Canada. Whether you can do so or not depends on if you can get by the 20-year rule.
In general, to be able to collect your Canadian pension outside of Canada, you need to have lived in Canada for at least 20 combined years of your life after you turned 18. If you don't fulfil this criteria, any pension payments due to you from Canada will stop paying out six months after you've been abroad.
There is one notable exception to this though. The 20-year rule also applies to countries with which Canada has a social security agreement.
Canada has around 60 such agreements - including one with Germany, as well as Australia, the US, UK, and most other EU countries. On the other side, Germany has around 20 such agreements, including the one with Canada.
These agreements allow the pensioner to include the years they've spent working in countries like Germany regarding the 20-year rule for collecting a Canadian pension.
So a Canadian who lived in Canada until they were 30 and then spent the rest of their working life in Germany would still hit their 20-year rule and be able to collect Canadian pension payments - even if they chose to retire to Germany.
READ MORE:Â How can pensioners from abroad retire in Germany?
How else does the Canadian-German social security agreement work?
Canada and Germany have had a social security agreement since 1988, and updated it in 2003.
The most basic provision is that you can collect a proportionate amount of your pension from both countries after you retire - if your working life involved periods spent in both of them.
So if you worked five years in Canada and 40 in Germany - you would receive pension payments in your retirement age from both countries. In this example, the Canadian payments would be much less than the German ones - as you spent less time living and working there - but you would still get these payments.
This social security agreement also goes in reverse. Someone who worked less than five years in Germany could still receive a German pension if the time they spent working in Canada during their career pushed them above Germany's five-year rule for being eligible for a German pension.
Note though that this generally applies to Canadian Pension Plan (CPP) payments. So payments made to the Quebec Pension Plan (QPP) may be treated differently. If this applies to you, you should consult the QPP.
READ ALSO: How long do you have to work to receive a German pension?
How much are Canadian pensions taxed in Germany?
State pensions from any country are treated as earned income by the German system. Therefore, Canadian pensions in Germany are subject to progressive tax rates ranging from 14 percent to 45 percent.
Furthermore, these will generally fall under the Canadian-German Double Taxation Treaty, so if you pay your tax in one country, you shouldn't need to pay it in another. There are cases though where you may need to prove to the other country that you've already paid tax on the income in the other state.
There may also be some specific differences depending on your situation, so be sure to ask for professional advice if you think you need it - and keep all the necessary records.
Please note, we are at The Local are not financial experts. The information above is designed to help, but if you are unsure of what steps to get yourself in order tax-wise, seek professional advice.
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