Retiring overseas is becoming a popular notion for our aging population. Whether it’s due to a need for adventure, a desire for more relaxing surroundings, or the idea of getting the most out of Social Security benefits, it’s not hard to imagine the appeal of retiring on a sandy beach or an exciting new country. The U.S. Social Security Administration sent more than 613,000 retirement-benefit payments outside of the U.S. in June 2014, a more than 150 percent increase from 2002. For those choosing to live abroad for the retirement years, it’s not an easy decision. Moving out of the country is a lengthy and intricate process for any expat, but for those retiring abroad there are even more aspects to consider.
Researching and understanding the differences in healthcare will be of vital importance before deciding on when and where to retire overseas. Retirees won’t be able to use Medicare in another country which can be a deal breaker for many people that rely on it heavily or have serious medical expenses. Fortunately, there are insurance policies that will cover you internationally. Also, the cost of healthcare in many other countries is often lower than it is in the U.S. so it might end up being a much better financial situation than before. It varies by the country, however, so it’s important to do all of your research before taking the leap abroad. Ask your insurance provider any questions you have, make sure your prescription medications are available in your new country, and make sure that you are set up with any type of specialist you’ll need for any medical condition you have.
Planning is obviously the key to retiring successfully out of the country. Specifically, it’s best to plan for what’s best for your financial security. Getting in touch with a banker or financial advisor with cross-border expertise is a great way to obtain the skills and knowledge necessary to keep your finances secure when you leave the country. It’s important to note that many American expats keep a U.S. bank account for large amounts in addition to their foreign bank account because of the difficulty in opening a foreign account because of U.S. federal regulations.
Federal regulations, tax laws, and exchange rates have all been common issues for expats moving abroad for retirement. Unfortunately, the laws are different in every country, so it’s important to do your research based on both the country you’re leaving and the country you’re moving to. Remember that many Americans living abroad still need to fill out tax forms, and are common victims of theft overseas which are just two small examples of ways that your finances could be compromised if you don’t learn how to protect yourself.
Budgeting as an expat is a little different from budgeting as a retiree. Your money is a fluid thing that means something different in each country with its own exchange rate, cost of living, and financial regulations. Many financial advisors warn expectant expats that exchange rates change all the time and one money transfer done at the wrong time can mean a drastic change in your finances if it’s done the wrong way at the wrong time. Without researching your destination thoroughly before you make the big move you could be surprised by an elevated cost of living or a monetary loss due to exchange rates.
The finances you accumulate during your time in the workforce are sacred for the retirees of all kinds. The difference between the two is the unknown. Retirees that stay within their home country are more aware of where their money is going and what it is doing. It is much easier to budget when you stay in one place, with one bank account, and one type of currency. Many people over 50 are deciding to delay retirement because of poor pensions and a lack of savings. Being aware of the growing problem with timely retirement is something to keep in mind as well. The funds accumulated throughout a person’s life are not enough to retire on anymore for many that decide to stay within the country, so be sure that.
Deciding on your destination for retirement is arguably the most exciting aspect of planning to retire as an expat. Will it be an exotic new city, a sandy beach, or an outdoorsy adventure? You’ll need to consider exactly what type of life you plan on living from this point forward, and that includes a ton of financial questions as well. The cost of living in many popular beach towns is extraordinarily high, so you’ll need to discover how much of your retirement will be able to go towards your living expenses. Look into each prospective location with things like culture, access to health care, ease of travel, cost of living, and weather in mind. Decide how often you’ll be flying back home and how much that expense would be, consider leaving a nest egg in a U.S. bank account for emergencies, and utilizing real estate as an investment.
After getting through all the paperwork and jumping through all the hoops that it takes to retire as an expat, it will make the time to relax that much more satisfying. Despite how much easier it is to retire in your home country, retiring in a new location is an experience that can’t be compared. After spending your whole life working for your retirement, you deserve a lounge chair in a tropical location to celebrate your success.
Chelsy is a writer from Montana who is now living in Boise, Idaho.She graduated with her journalism degree in 2012 from the University of Montana. She enjoys throwing a Frisbee for her dog, spending time with her fiancé, and drinking cold coffee. Follow her on Twitter!