Retiring abroad? Tips and tools to help you make an informed decision
Dear Savvy Senior,
What are the key factors to consider when contemplating retiring abroad? My husband and I will soon be retiring and are interested in moving abroad to a country that’s cheaper and warmer than the U.S.
– Looking Ahead Dear Looking,
Whatever your reasons for aspiring to retire abroad – a lower cost of living, a better climate or a desire for adventure – you need to do your homework and learn everything you can about the country you’re interested in because it’s not an easy move. Here are some different tips and tools to help you make an informed decision.
If you’re in the decision-making process of where to retire, Internationalliving.com and Liveandinvestoverseas.com are two excellent websites that provide articles, information and lists of the top retirement destinations abroad based on cost of living, climate, health care, housing, visas, infrastructure and more.
Once you pick a country or two that interest you, a smart move is to talk or network with some expats who have already made the move you’re thinking about making. They can give you tips and suggestions on many issues, as well as the advantages and disadvantages and day-to-day reality of living in a particular country. Facebook is a good resource for locating expat groups.
But before committing, experts recommend visiting multiple times during different seasons to see whether you can envision yourself living there and not just exploring the place as a tourist. Here are some other factors you need to look into:
Cost of living: Retiring abroad used to be seen as a surefire way to live beyond your means, and for many countries it still is. But depending on where you move, the U.S. dollar may not stretch as far as you think. To compare the cost of living in hundreds of cities and countries use Numbeo.com.
Visa requirements: If you want to spend just part of the year living abroad or are willing to move from country to country, most countries offer a three- or six-month tourist visa, which is easy to get. But if you want to set up permanent residence abroad you might have to jump over a few more hurdles depending on where you want to retire. To research visa requirements in the countries that interest you, visit Visaguide.world.
Health care: Most U.S. health insurance companies do not provide coverage outside the U.S., and neither does Medicare. Check with the embassy (see Usembassy.gov) of your destination country to see how you can be covered as a foreign resident.
Many countries provide government-sponsored health care that’s inexpensive, accessible and just as good as what you get in the states, or you may want to buy a policy through Medibroker.com or Bupaglobal.com.
Also know that most people who retire abroad eventually return to the U.S., so experts recommend paying your Medicare Part B premiums. If you drop and resume Part B, or delay initial enrollment, you’ll pay a 10% premium penalty for every 12-month period you weren’t enrolled.
Housing: Buying a home in a foreign country can be complicated, so it’s almost always better to rent first until you’re sure you want to permanently reside there.
Money matters: Opening or maintaining a bank account abroad can also be difficult. You may have to establish a checking account with an institution that has international reach like Citibank or maintain a U.S. bank account that you can access online. Claiming your Social Security benefits, however, should not be a problem as they offer direct deposit to almost every country in the world. See Ssa.gov/international/payments.html.
Taxes: You also need to research tax rules in your prospective countries and be aware that even if you’re living in another country, as a U.S. citizen you’ll still most likely need to file an annual U.S. tax return – see IRS. gov/pub/irs-pdf/p54.pdf.