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Currently, I'm a grad student in physics. I am originally from Germany, pursue my PhD in Canada and have not yet made any plans on where I would like to work and live afterwards. A career in academia would likely bring me to countries all over the world: I might return to work in Germany, stay in Canada, go to a research institute in the US or to some other European country.

Many countries have their own kind of retirement savings incentive, which make saving for your retirement tax free but require you to fulfill a set of conditions.

I wonder if these government-specific plans would be any good for me as it is quite likely that for some time to come I will live a nomad's live, with a postdoc here, a postdoc there, moving around quite a lot. I probably cannot expect to "finally" settle down until well into my 40s.

Should I rather invest entirely on my own, or is there a sensible strategy to leverage tax incentives or other benefits for "proper" retirement plans in multiple countries at the same time?

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A lot of the 'government specific' plans have hidden catches. For example in Canada your premier vehicle for retirement savings is the RRSP. However this 1) requires you to be earning before you can contribute to it (I'm guessing as a PhD student you won't be earning much) and 2) requires you to pay tax on whatever you eventually withdraw. If you are outside the country there is a 'withholding tax' on withdrawls.

Incidentally if you are earning in Canada you will be paying into a 'retirement fund' via social security, but since you have no option, and you won't get anything for it unless you work here for a decade or two, just write it off.

My personal recommendation is that if you haven't decided where to settle, and you want to save for retirement, and you're in Canada just put it in a TFSA. This lets you save (some) money without paying tax, but lets you take it out without penalty at any time.

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  • Yeah, these hidden catches such as withdrawal taxes are what annoys me :) Thanks for the answer.
    – Lagerbaer
    Dec 11, 2011 at 2:43
  • Unfortunately without them it would be too easy for a visiting worker to put huge amount of money in their RRSP, allowing them to pay almost no tax during their time in Canada, and then withdraw the money when they leave Canada at no penalty.
    – DJClayworth
    Dec 11, 2011 at 17:14
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You might want to think about your retirement strategy more than your accounts. It may make more sense for you to invest in long-term investments with low turnover like index funds, and put the bond portion of your portfolio in local government bonds.

If the last few years have taught us anything, it's that the unthinkable can happen. So perhaps it makes more sense to have "regular" investment accounts back at home, in Canada, the US, etc so that you have the flexibility to move the money to wherever you end up.

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If you plan to live in the same country as you are working in, then plans such as 401k and IRA help in tax benefits but for international persons, I suggest simple investments that do not take much of your attention and time. These can be CDs (Certificate of Deposit) which give you a little interest, and getting a brokerage account and buying a few ETFs (you can diversity yourself by getting a few ETFs from different sectors).

I think this should cover you and also give you the ability to liquidate your money without any penalty.

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