Do you dream about retiring in another country? It is an intriguing option for some who feel like they are ready for a new experience to go with the freedom of retirement. Whether you’re looking for a favorable climate, less expensive living costs, or specific cultural or recreational opportunities, retiring abroad could be for you.
No matter what the inspiration may be, it is not a matter to be taken lightly. Do your homework and become as familiar as you can with your dream environment before making a final decision. Read on for a few things you’ll want to consider.
Get a true feel of what it will be like to live in a new country
It is easy to become infatuated with a particular location as your future home when you visit on vacation. But there is a big difference between being a tourist and a resident. Think about how your day-to-day routine would change and what elements you’d like to stay the same, such as going to the gym or volunteering. If you know others who have retired abroad, ask them about their experience making the transition overseas.
Determine what’s required to gain residency
If you are seeking to become a fulltime resident overseas, you will have to determine the requirements. Alternately, understand the laws of the country (and they vary) to be an American resident living in that country on a fulltime basis.
Consider your living options
Will you want to buy a home or will renting be a better option? Renting may be wiser if you want to take some time to better acquaint yourself with your new surroundings before locking yourself into a purchase. Consider what happens as well if you purchase a home and then plans don’t work out and you decide to move back to the U.S.
Learn about medical services
As we grow older, the need for health care services tends to rise. While many countries have nationalized health care systems that cover residents, you may or may not be eligible to participate. Medicare won’t cover treatment overseas, so a separate insurance plan may be required. If you think you may return to live in the U.S. one day, you may want to keep paying Medicare premiums to maintain future eligibility for the program. Also check on the quality of health care services in your intended new home to determine if medical capabilities meet your expectations.
Review financial matters
Determine how the currency exchange rate will affect your expenses. Keep in mind that your expenses may vary, particularly if you want to travel within your new region or rely on public transportation. You may want to transfer some money to a bank account in your new country, although electronic banking services today make it easy to access funds when you are outside the U.S. At the very least, you will need to continue filing a tax return in the U.S. and potentially paying U.S. taxes as well, though this can vary depending on your country of choice.
Choosing where to retire is a big decision. While thinking through the items above is a good place to start, consult the U.S. State Department’s website for more considerations. Visit www.travel.state.gov and search for the topic “retirement abroad.”
Brandon Miller, CFP is a financial consultant at Brio Financial Group, A Private Wealth Advisory Practice of Ameriprise Financial Inc. in San Francisco, specializing in helping LGBT individuals and families plan and achieve their financial goals.
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