Many seniors look forward to retirement in a tropical paradise with warm weather and a leisurely atmosphere. However, in order to achieve these dreams, plenty of careful planning and preparations will have to be made for a greater chance of success. If you’re thinking of retiring abroad, you should think about this decision carefully and take as many factors into account as possible.
Here are some of the major steps that you should take before deciding to retire abroad:
- Double-Check Visa and Residency Requirements
- Residency and immigration laws differ vastly between countries.
- Determine whether or not you will need a visa to visit/live in a particular country for an extended period of time.
- Review information on dual nationality requirements as applicable.
- Learn Local Laws
- Seek professional advice from a lawyer knowledgeable about the destination before committing to live there.
- Learn whether or not your trust, will, and other estate planning powers will be legally enforceable in your new country of residence.
- If you intend to drive, learn how you can attain a license (and make sure you know any unfamiliar traffic laws).
- As a foreign resident, you may not enjoy the same civil liberties/political rights that you do in the US. Double-check that these differences will not be concerning to you.
- If you plan to work, make sure to obtain a proper permit.
- Make Financial Preparations
- Make sure to account for changes in the exchange rate – some countries have more stable currencies than others.
- Find out whether or not you should open a local bank account.
- Decide how much of your money you want to keep as U.S. dollars and how much you are willing to convert to the local currency.
- Research Your Medical Care/Costs
- Be aware that Medicare (the U.S. government’s health plan for seniors) does not extend to overseas health care expenses.
- It is highly recommended that you get private health/dental insurance that can allow for medical evacuation to the U.S.
- Countries with national health systems may have restrictions on eligibility for foreign residents.
- Environmental conditions at your destination of origin may contribute to specific allergies and ailments that are sensitive to changing air quality, humidity, or altitude.
- If you are disabled, make sure to research the types of accommodations that you will be able to expect in your country of destination.
- You may need to receive multiple vaccinations to protect you from diseases common in certain countries.
- Understand Your Obligations and Benefits
- Depending on which country you decide to go to, you may or may not be able to receive Social Security benefits.
- As a U.S. citizen, you will still have to pay taxes to the U.S. even when residing on foreign soil. Even if you move all of your assets to a foreign country, you will still be expected to adhere to these requirements.
- On top of these rules, you will also more than likely be expected to contribute taxes to your country of residence.
- However, because the U.S. has tax treaties with many countries regarding double taxation, you may not have to make full payments to both nations.
- As a U.S. citizen, the Department of State will still be eligible to offer you sanctuary at your nearest embassy.
Popular Locations to Retire Across the Globe
Earlier this year, International Living magazine decided on its top locations for retirement abroad. Overall, the list is populated largely by countries with a cheaper standard of living and easy qualifications for residency. This year’s choices are listed as follows:
- Costa Rica
Although these countries allow for comfortable living, picturesque weather, and other pleasant day-to-day conditions, they too have their fair share of problems. Between corruption, bureaucratic incompetence, poor-quality healthcare, inflation, violent crime, and political turmoil, there are many reasons to reconsider retiring abroad. When making your choice, be sure to base your decision on the factors that matter to you most.
Alternatives to Retiring Abroad
If you’re simply looking for a change of scenery, moving to a different state may be enough to sate your adventurous longings. In addition to making the legal logistics much easier, retiring in another state also allows you to retain the often-overlooked benefits of staying in the U.S. You won’t have to deal with a language barrier, you’ll have access to the social services of the U.S., you can choose from a wide range of climates across all 50 states, and you may have an easier time making social connections in a place with a similar culture. In fact, using a HECM for Purchase, you could finance the purchase of a new home by using a reverse mortgage. By taking advantage of a reverse mortgage, you could fulfill your dreams of retiring far away while still retaining the benefits of living in the United States.