7 Things to Consider When You Want to Retire Abroad
Estimated reading time: 3 minutes 40 seconds
Think of all the things you need to do when you move from one place to another: Change of address cards. Finding new doctors. Transferring bank accounts. When you move out of the U.S.—as an increasing number of retirees are—the list gets even longer and more complicated. In fact, it will be worth your time and effort to do a little (OK, maybe a lot) of research before you even start looking for the Mexican beachfront casita you’ve been dreaming of.
Here are seven things to consider:
1. Visas, residency, and local laws
Local laws vary from country to country. Just how easy and straightforward it is to get a visa or residency permit for a certain country may influence your decision of where to retire. The US Department of State offers country-specific information on its website. You can find details about dual nationality as well.
If you’re in a same-sex marriage (or have family members likely to visit who are), you’ll want to find out whether local laws recognize that status. You also may want to research the local attitude toward the medical (or recreational) use of marijuana. Some countries have very strict drug laws.
2. Health care costs, availability, and quality
Medicare doesn’t cover health care costs outside of the U.S. While many countries have comprehensive national health systems, those benefits may not be fully available to you either. It is important to find out what your coverage may be and to get private health and dental insurance that will cover any care you need in your new country of residence (and maybe even evacuation to the U.S. in case of emergency).
If you rely on prescription medications, talk with your physician about the best way to make sure you have access to a safe, secure and uninterrupted supply.
3. Financial matters
No matter where you retire, you’ll want to make a budget. When you retire outside of the U.S., that budget needs to take foreign exchange rates into consideration; changes in the value of the U.S. dollar can affect your standard of living.
You’ll also want to find out how to—or even if—you can open a bank account in the country you’ve selected. Ask your U.S. bank about its policies and charges for accepting and transferring funds like your Social Security benefits and required minimum distributions from your IRAs. The Social Security Administration's Office of International Operations is a good resource for information about receiving your benefits outside the U.S.
Even when you live outside the US, you still have to pay taxes to Uncle Sam. You also may have tax obligation in the country where you live. The IRS offers up-to-date tax information for residents and U.S. citizens living abroad.
5. Communications and transportation
Staying in touch with friends and family when you retire outside the U.S. makes the transition easier for everyone. Not all countries have the extensive and reliable telecommunications system you may be used to. Internet connections in particular can be spotty and expensive. Be sure to research phone and internet plans where you plan to retire.
Being able to get around town or into town if you choose a rural destination may be important. Owning or leasing a car is another budget item to consider, along with the cost of fuel and insurance. On the other hand, many cities are walkable or offer good public transportation systems.
6. Personal experience
This is the most fun and interesting part of your preparation: travel to the locations that interest you as retirement destinations. Some people retire in a place that is already familiar from family vacations or they return to the country where they grew up. You may retire in search of good weather, good golf courses, or good restaurants. Others follow their interests: Sailors head for the coast. People who fly fish prefer spots on a lake or river.
You’ll be living there year-round, so visit at different times of year. A beach town can be a different place in February than it is in June.
For inspiration and insights into retirement destinations, you might want to start with these two lists. (Hint, hint: Mexico tops both lists).
7. Retirement savings
No matter where you retire, you will need a secure and substantial nest egg. The trained professionals at The Entrust Group are happy and well qualified to help. Sign up for a FREE CONSULTATION today.