Nobody wants to think about growing old. We all emigrate with high hopes of a better life. Old age is the last thing on our minds. It should, however, be one of the first things, especially when you're intending to move to Canada. Jobs, houses, transport and a multitude of other things are priorities:considering what life will be like in your “golden years” isn't even on the radar. In Canada, however, no matter what euphemism is used to refer to your time after 65, the reality is far from golden in a financial sense, especially for those who haven't considered their long-term well-being and planned far ahead for their retirement. Government programs provide very little in the way of a safety net, and you will, to a large extent, have to take care of your own financial needs. As an immigrant you're in a particularly vulnerable position, the more so if you're from the UK.

So here's what you can expect as a senior in Canada, along with a few warnings and suggestions on how to avoid being caught in a poverty trap with few ways out.

You may be eligible for Old Age Security (OAS). This came into force in Canada in 1952 and is a bit like the State Pension in the UK but with some major restrictions. To receive OAS, you have to be a Canadian citizen or a legal immigrant on the day before your application is approved. To get any OAS at all, you have to have a minimum of 10 years' residence in Canada after you were 18. If you have less than 10 years, you may get a partial payment. Thinking of moving back to the UK when you retire or going off to some country where your dollars might stretch a bit further? If you want your OAS paid outside Canada, you'll need a minimum of 20 years' residence. If you don't meet the 20 year requirement, your OAS will be paid for only the month you leave Canada and for six months later – after that you'll be beach combing or living on coconuts. The basic qualification to get the full amount of OAS is a minimum total of 40 years' residence in Canada after you were 18. With anything less than 40 years, you'll get a partial amount. And after all this hoop jumping how much do you get? Right now, the maximum is about $530 but the good news is that your OAS payments are indexed to cost of living quarterly.

If you've ever worked in Canada, you're eligible for Canada Pension Plan (CPP) payments or the Quebec equivalent, Quebec Pension Plan (QPP). These payments aren't dependent on the number of years you've lived in Canada: they're based on how long you worked here and, to a large extent, how much you earned during that time. Everybody over the age of 18 who is working has to contribute to the CPP, with deductions being made from your check each pay period. If you have an employer, you pay half the required contribution and your employer pays the other half. If you're self-employed, you pay the whole contribution. You can start drawing your CPP any time after you're 60 but there's a penalty if you draw on it before 65 - the amount you get will be reduced by a specified percentage for every month you draw on it up to a maximum reduction of 36%. If you decide not to draw CPP till after you're 65, you'll get an additional amount based on a percentage applied to the number of months you defer receiving payments up to a maximum increase of 42%. Currently, the maximum you'd get if you retired at 65 would be about $960 a month. CPP is indexed to cost of living and adjusted in January every year. Whether you decide to start drawing CPP early or to wait till you're 65 or even later depends on a number of factors such as how much you're eligible for in the first place, what other income you have, and your state of health and life expectation.

For low-income seniors, there's the federal Guaranteed Income Supplement (GIS) which provides a maximum of about another $520 a month but again you have to be eligible for OAS to begin with.

There are a few other sources of social support income such as provincial seniors' benefits which vary from one province to another, and a federal Allowance but these don't add much to the pot and if you leave Canada, the GIS and Allowance are paid for only another 6 months, no matter how long you've lived in the country.

For seniors with no source of income other than  OAS, CPP, and federal or provincial supplements, the prospects are pretty bleak. Canada doesn't have a stated “poverty line” but has a figure called LICO (Low-income Cut Off). For a single person in 2111, this is $22,229. Most seniors aren't eligible for the maximum CPP, and, if you don't meet the requirements to receive full OAS, unless you've planned a long way ahead and made provision for income from other sources, the outlook for life in your later years in Canada is far from rosy. Going back to the UK won't help,either – you'll be able to keep your CPP payments but, unless you meet the lengthy residence requirements, you won't keep your OAS. And you will lose any GIS or other supplementary payments you might have been eligible for in Canada.

So what can you do to make sure you can live, if not with a pot of gold, at least with enough income to enjoy life as you age? Any UK State Pension you're eligible for isn't going to help much if you live in Canada. Most people are aware that it isn't indexed for Canadian residents and will stay frozen at whatever level it was when you started to draw on it. Frankly, once you've landed in the hole, there isn't a lot you can do to get out of it so it's crucial to plan well ahead and take action before you even get to the point of teetering on the brink.

Most important, be debt-free as you enter retirement. This includes not taking on  a long-term a mortgage and still being burdened with it when you're no longer working.

When you emigrate, look for a job where there's a pension plan you can get into. Some of the best, of course, are civil service positions, either federal or provincial, and teaching jobs but these are hard to come by for immigrants. Check, however, to see if your prospective employer does have a pension plan you can opt to join. Usually, you'll pay a bigger percentage into the plan that he does but it's still worth your while. The only drawback is that you may lose your pension if the company goes bankrupt or out of business for any other reason. Find out what protection your pension would have and whether you could roll it over into an RRSP (see below).

To an increasing degree, seniors in Canada are continuing to work well past 65. If you have a job you enjoy and are able to carry on doing it after 65 even on a part-time basis, this can soften the blow at least for the time you're able and willing to go on working. Some seniors also start new part-time jobs or launch their own businesses. About 25% of seniors' income in Canada comes from employment but saving and investing accounts for about another 15%.

Canada, unfortunately, offers few other direct incentives to save for retirement. It has nothing like the old TESSAs (Tax Exempt Special Savings Accounts) or PEPs (Personal Equity Programs) in the UK.  Effective on January 1, 2009, Canada introduced the TFSA (Tax Free Savings Account), a very much watered down version of the UK's ISA (Individual Savings Accounts). Currently, you can invest only $5000 a year into a TFSA. While the allowable amount is supposed to rise as cost of living increases, it has not done so since inception and compares very unfavorably with the £10,200 maximum yearly contribution allowance for ISAs. At current exchange rates, this means the ISA contribution ceiling is more than three times the TFSA limit.

If you still have money in a PEP or ISA, when you emigrate you don't have to cash these in. Unless you absolutely must take the money out, it makes more sense to leave it in accumulating tax-free:similar investment options in Canada are far more limited. If  you're planning to emigrate a few years down the road, stashing as much as you can in ISAs is also a good idea. With few exceptions, you won't be able to continue to contribute to an ISA once you're no longer a UK resident but you will have a nice tax free pot growing away and ready for you if you decide to retire back home or if things don't work out for you in Canada in the meantime.

Beware, however, of reverse mortgages. For cash-strapped seniors, these  are often touted as a way out. A reverse mortgage is really a loan taken out against the equity you have in your home. It can be paid to you either as a lump sum or in installments. In order to qualify, your home has to be mortgage-free or very nearly so. The carrot is that you don't have to pay back any of the loan or interest until you either sell the house or it's no longer your primary residence if, for example, you move into a seniors' facility but keep the house. All of this can be very tempting, especially when the prospect of a tropical cruise, a new car, or something else on your bucket list is dangled before you. After all, it's your money, you deserve a few treats, and you should really have all the fun you can before it's too late, shouldn't you? And if your children get a bit less when the house is eventually sold, well, they're young enough to make their own money and they would want you to enjoy yourself in the meantime. It all sounds great except for the upfront fees which can be thousands of dollars and for the fact that “eventually” may happen before you die. Suppose you decide to move to a warmer climate or a smaller house or your husband or wife dies and you can't manage the house by yourself. You'll end up selling while you still need a roof over your head. The lender will be right in there taking back the entire amount of the reverse mortgage plus interest and you'll be left with a lot less to buy another place where you might enjoy living. As a last resort, you may consider a reverse mortgage to help finance your retirement but be very aware of how much and what it's going to cost you now and in the future. Short-term gain for long-term pain is never a good strategy.

Overall, in Canada, the onus is still very much on you to take care of your own financial needs in retirement. As an immigrant, you're faced with particular challenges in this respect. Being aware of these and making provision for your long-term future should be priorities before you even make the decision to move to Canada. While no-one can see what life will be like several decades down the road, it is always wise to hope for the best but plan for the worst.

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