How to Retire Abroad: 5 Tips for Retirement Overseas
Have you always thought about the best countries to retire to? Retirement offers the perfect opportunity to make your dreams of living abroad a reality. But before you make the big move, there are some things that you need to consider and plan for in order to comfortably retire overseas.
1. Choosing a Location
Start with the fun stuff — figuring out where to retire!
There are a number of factors that come into play when choosing which country to move to in retirement. Belize retirement, Costa Rican retirement and retirement in Mexico are some of the most popular searches on the internet related to retiring abroad. And you can learn a lot about these countries and others in the 5 best places to retire abroad.
However, retiring abroad is more than finding the ideal climate and best sunsets. Before diving into the specifics of one country or another, you will want to consider the following when thinking about the best places to retire abroad.
• Cost of Living – Though many retirees find that living abroad allows them to get more out of their retirement savings, some foreign locations have a higher cost of living. In addition to cost of living expenses, consider relocation costs.
• Culture and Language – Sometimes ex-patriates find themselves feeling isolated because they do not fluently speak the language of the country or the culture is so different from their own. Consider your ability to adapt to the new country’s customs.
• Ability to Connect with Family and Friends – As you get older, you may find that traveling long distances to visit family and friends back home will get more difficult. Choose a location that your relatives can travel to easily and affordably.
• Job Prospects – If you plan to work in retirement, you will want to choose a country that has positions which can use your skills and experience. Also, consider whether or not the country allows U.S. citizens to work.
• Health Care – Access to medical care becomes increasingly important as you reach retirement age. Many countries with a low cost of living also have poor access to important health care services.
2. Find Out if Retiring Abroad Makes Financial Sense
Whether you decide to move to another country in retirement, or perhaps you just want to spend some of your retirement traveling abroad, it is important that you have a strong retirement financial plan. Having a financial plan as well as considering other factors, such as healthcare and family, will help make your retirement a success.
It could be enormously helpful for you to use one of the best retirement calculators to help determine if your plan to move abroad is viable or not. Just plug in your expected expenses for the move abroad and see what your retirement plan looks like.
3. Retiring Abroad — What to Do With Your Existing Home?
Another aspect of planning for your move abroad is considering what to do with your home. If you plan on living abroad full-time and want to sell your home, consider the costs and time associated with putting your home on the market. If you only plan on living abroad for only part of the year, you may want to rent your home while you are away to generate additional income in retirement.
4. Find Out How to Pay for Healthcare When You Retire Abroad
Since Medicare does not cover health care outside of the U.S., you will also want to factor in health insurance or out-of-pocket costs for health care in other countries. While many countries have national healthcare systems, you will want to research your eligibility and the quality of the care.
Your exact coverage needs will vary greatly depending on where exactly you want to retire.
Options for funding your healthcare overseas include:
- Paying Out of Pocket: Because healthcare in some countries costs much less than in the United States, many people who retire abroad opt to pay out of pocket.
- Local Insurance: You may be able to buy a health insurance policy where you retire.
- International Insurance: A good international policy will probably cover private medical and dental treatment or medical evacuation to the United States. The costs will vary tremendously — although for some countries your expenditures might be lower than your out of pocket Medicare costs.
The U.S. State Department has some good resources for starting to investigate health coverage abroad.
5. Figuring Out All of the Details of How to Retire Overseas
After you have done some research, chosen the ideal location, assessed your retirement financial plan and figured out what to do with your existing home, it’s time to start planning for your move. There are many important details and logistics for making the best countries to retire in a reality!
Social Security: The Social Security Administration has an Office of International Relations that can help you with your plans to retire abroad.
Plan for Banking: Setting up deposits and how to pay for expenditures — both in the United States and where you retire can be complicated. Nevermind figuring out exchange rates, etc… The simplest option might be to chose to keep your money with an international bank that has a presence in your retirement destination as well as in the United States.
Taxes: Living abroad does not exempt you from paying taxes in the United States. Before relocating, understand your tax obligations both in the United States and the place where you are moving. The IRS has some good information for U.S. residents living abroad.
Residency Requirements: Before retiring abroad, you will want to make sure you understand the residency and documentation requirements for the place you are moving.
Housing in Your New Country: If you are considering buying abroad, you will want to understand all of the peculiarities of owning property abroad. Some countries only allow foreigners to buy a home, but not the actual property. It can be confusing, but it is important to understand the various legal differences.
Whether you decide to move to another country in retirement, or perhaps you just want to spend some of your retirement traveling abroad, it is important that you plan ahead. Having a financial plan as well as considering other factors, such as healthcare and family, will help make your retirement a success.
Resources for Retiring Abroad
Here are a few additional resources: