Expat Expertise: Pro Tips for Retiring Abroad
Between 2007 and 2017, the number of Americans who retired overseas increased by 40%. Because it’s become easier to travel the world in the last decade, many are choosing to live out their golden years somewhere new and exciting.
You might be considering retiring abroad to get a change of scenery. But it’s not all just fun and games. There are several things you should take care of to ensure that you won’t be struggling at a time where you should be enjoying yourself.
To help you out, here are some tips for retiring overseas.
How Do You Retire in a Different Country?
Let’s first cover some basics. You might think that the American passport is powerful and allows you to up and move anywhere you want, but many are surprised to find out that’s just not true.
Every country has its own requirements for immigration. This includes different visa and residency requirements too.
In most cases, countries abroad will offer you a temporary residence permit and then once you’ve been there long enough (and fulfilled other requirements), you have an opportunity to apply for a permanent residence permit.
Make sure you read up on these requirements before you move. It can be a good idea to sit and write down which countries you’re interested in. Then, do some research and eliminate choices from the list to get the most doable option in the end.
Do a Test Run First
Chances are, you’ll be spending a few decades in the retirement country of your choice. Whether you’ve never stepped foot in it before or have gone there on vacation a few times in the past, you’ll want to do a test run of living there. After all, it’s a completely different experience when it comes to vacation mode vs actually living somewhere.
If possible, you want to make your test run 1 to 3 months long. This allows you to test the waters when it comes to things like bureaucracy, cost of living, everyday errands, nightlife, healthcare, etc.
You’ll get a little taste of whether retiring abroad in that country is right for you or not. If not, you can easily return home; no harm, no foul.
This can also give you a chance to decide whether you want to retire abroad full-time or just for certain months of the year.
Calculate Your Finances
Once you retire, you’ll have to rely on the money you’ve saved up, plus your pension and Social Security. While you’re researching potential countries to retire to, figure out what your expenses will be. They include things like:
- US taxes
Figure out approximately how much money you’ll have to spend every week, month, and/or year and see if it’s feasible to live comfortably in your dream country. If not, are you willing to or is it worth it to sacrifice certain things to make it happen?
For instance, maybe you can live in a smaller house or a more remote area. Or maybe you don’t have to buy organic foods all the time.
And if you feel like you can’t give certain things up in retirement, you’ll realize you have to pick somewhere else to retire to.
Check Out the Real Estate Market
It’s true that there are many options for cheap property overseas. But that doesn’t always mean you have access to them if you want to buy them.
Typically, there are extra rules and regulations in place for expats. This can create some unexpected hurdles when purchasing a property.
It might be worth it to enlist the help of a local lawyer so they can help you navigate the real estate market more easily.
Have a Plan for Healthcare
On that note, make sure you have a gameplan for healthcare before you move! Your health will inevitably decline, especially as you get older, so you need to have access to good care when you need it.
When you’re doing research, look into the various health insurance plans available abroad. See if you’re eligible for national healthcare systems when applicable. And find out what the quality of care is like there.
If you aren’t able to qualify for national healthcare systems, or the countries you’re looking at don’t have them, then look into other options. In many cases, it’s quite affordable to pay out of pocket. You can also pay for private health insurance or get a good international policy.
You won’t be able to use Medicare when abroad. However, it can be helpful to keep it while you’re overseas. Should you get sick, you can always return to the US to get treatment under Medicare.
Sort Out Your Financial Details
This is probably one of the least fun parts of retiring abroad, but perhaps the most important. Sorting out your financial logistics is key to having a smooth retirement.
Some vital areas you need to look into are:
- Social Security
- Taxes (some countries have double taxation treaties)
You’ll also want to think about what you want to do with your house. Selling it can give you a nice chunk of change for your upcoming move, but keeping it can also give you a nice home base to return to if you’re only planning on retiring abroad part-time. If you go for the latter option, look into renting it out while you’re gone to generate some additional revenue.
Make Retiring Abroad Easy
Retiring abroad might sound like a dream, but it’ll only be that way if you’re realistic about it. As long as you do your research and prepare ahead of time, then you’ll have a much easier experience living out your golden years in a tropical paradise.
So when moving abroad for retirement, remember the tips we’ve given you here. You’ll be glad you have this treasure trove of information so you can get going quick!
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