Home » Ten Important Questions To Ask Yourself Before Retiring Abroad

Ten Important Questions To Ask Yourself Before Retiring Abroad

Moving abroad gives you a chance to reinvent your life and begin anew. For some people, the retirement years are the best time to make such a change. This is why an increasing number of people today are retiring abroad. One of the most important advantages that they experience is of course the reduced living, housing and healthcare costs.Dramatic difference in living costs

One of the main reasons people choose to retire abroad is the reduced expenses. There are a number of destinations across the world where one can live a secure and comfortable life at a very economical cost. Retirees often have a limited budget to run their lives on, and places such as Ecuador, Nicaragua, Panama and Thailand enable them to live very comfortably on such a budget. In many of these places, it is possible to live on $ 1,000 a month, or even less.

Economical healthcare

Retiring abroad could reduce your medical care costs considerably. Expats can take advantage of the booming medical tourism industry and avail themselves of high quality healthcare that meets international standards; and all this for a fraction of the cost back home. Some of the popular medical tourism destinations that are welcoming to expat retirees include Panama, Colombia, Malaysia and Mexico.

Cheaper health insurance

Retirees from the U.S. will find that their health insurance costs take up a considerable portion of their budget. Settling in other parts of the world could alleviate this strain and reduce costs to even less than $ 100 per month for full local health coverage. Retirees can opt for an international or local policy depending on their requirements.

Better quality of life

Daily life in countries such as the United States and many European countries can be an expensive affair, and the average individual is constantly looking for ways to cut back on costs. A retirement budget especially needs to be highly monitored and this could mean giving up on many conveniences such as household help. This is not the case in a number of other countries where even a retirement budget can be stretched to accommodate various indulgences, including spa treatments and massages. It is possible to even have full-time help for household chores.

Pleasant climate

The retirement years should ideally be spent relaxing and enjoying the best of life, and warm, sunny weather is the ideal environment for this. Retirees can choose their destination depending on which weather suits them best. If tropical climate is your choice, countries like Belize and Honduras in the Caribbean are perfect locations, and also affordable. Those who prefer the contrast of seasonal changes can opt for Croatia or Uruguay, where the seasons change four times each year.

Lower housing costs

Accommodation cost is an important factor to keep in mind when planning retirement. This cost usually constitutes the largest portion of a retirement budget. Many places like Thailand, Philippines and certain parts of Ecuador allow you to live comfortably on even a modest retirement nest egg.


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Of course, the decision to retire abroad is a big one, and involves quite a bit of research and planning in terms of these factors and many more. Today, the Internet makes it is easy to find information quickly and within the comfort of your own home. It is possible to virtually explore communities before actually moving there. But there are limits to the online world, and spending some real time in the destination of your choice may reveal important and useful details. Places and people can have a lot in common, and sometimes you may feel an instant connection with a place, which is not possible over the Internet. There is also a big difference in experiencing a destination during peak season and off-season. Other significant factors include the quality of Internet services, how easy it is to perform routine tasks such as bill payments, and the proximity of the destination to family and friends back home. If you’re thinking about retiring abroad, but still holding off on making a decision, these ten important questions may help in making up your mind.

Can you afford it?

Before making any further plans, it is beneficial to consider whether you can afford to retire abroad. Many opt for overseas retirement because they figure they will be able to enjoy a lower cost of living in another country, and thus use their retirement budget more economically. This is all the more important for people with limited pension. With regard to affordability, here are some points to consider:

– Will you be able to pay insurance over extended periods of time?
– Will your retirement abroad affect your eligibility for social security benefits in your home country if you decide to return?
– It is likely that you have chosen a particular destination based on its low cost of living; how stable is the financial situation there?
– If you are receiving investments or pension in a different currency, are there any currency risks associated with your retirement destination that could devalue your savings over time?

Should you rent or buy?

In some cases, it may make sense to rent a home first, or even rent on a long-term basis. But based on your situation, it may also be preferable to buy a house of your own right away. To do both effectively, you require an understanding of the local property market. It may be helpful to read up on issues such as what to look for when renting a home, how to review a rental contract, the pitfalls of buying property abroad and how to manage them, how to stay secure as a foreigner in an overseas property market, how to review a selling price, the tax implications of owning property abroad and whether you owe income tax to your home country on your property holdings abroad.

Will you get the right healthcare?

Many insurance policies and healthcare schemes may not provide medical coverage outside of your country of origin. Expats who take up residency in another country may be eligible for coverage under that country’s national health coverage. Public health coverage in countries such as Costa Rica is inexpensive. However, there may be long waits and therefore many expats also opt for private healthcare. Paying out of pocket for medical care is also quite reasonable in many expat retirement hotspots. This could mean that you can skip insurance completely. It is advisable, though, to keep paying your medical coverage premiums to avail yourself of full coverage in your home country, should you decide to return there for treatment.

Would you have to learn the local language?

There are many countries across the globe where you can navigate through everyday life quite easily using only English, either because it is the official language or because the majority of the population is fluent in it. However if you are retiring to a destination where the people do not speak English, you are likely to encounter some challenges. For instance, a popular retirement location such as Panama has Spanish as its official language and expats will find that not knowing Spanish can prove to be a hindrance.

Is it easy to establish residency?

Researching whether the retirement destination of your choice is welcoming towards foreign retirees is an important step in planning your overseas retirement. Some countries such as Belize, Portugal, Malaysia, Ecuador and Panama not only welcome retirees from abroad, but also offer them certain perks. On the other hand, countries like New Zealand and Australia do not have a very favourable policy towards overseas retirees. Expats may find it easier to move through this bureaucracy in a new country with the help of a lawyer. Since residency laws are different in different countries, a local lawyer can spell them out for you and help you understand them before planning your relocation any further. Some expats opt not to retire permanently in any one place, and instead spend time in two or more retirement locations. This allows them to save on the costs required for securing a residency visa.

How much do you have to pay in taxes, and in which country?

Retirees who relocate overseas may still have to keep paying taxes in their home country. For instance, US citizens still need to pay whatever they owe on their retirement income and other investments. Even those who do not owe anything are still required to file their annual income tax returns. Very few expats give up their US citizenship, but those who do will still need to pay income tax as non-resident aliens. Retirees who transfer their assets overseas are also required to pay income tax to the US government. Some countries like Mexico and Canada have double taxation treaties in place with the US, and this may benefit retirees in the form of exemptions or reduced rates of taxation, depending on the country and the nature of the income.

Will you be safe?

It is important for expats to take into account the safety and security of the place they will be retiring in. Apart from general safety, the matter of political stability should also be considered. Non-residents may not always be able to get a clear picture of the political situation of a country. A good way to gain clarity on this is to read the local newspapers or subscribe to them online. While visiting the destination and soon after you move there, you can start conversing with the locals in the markets or restaurants, about the prevailing sentiment regarding the current political and economic state. It is also necessary to ensure that the location is safe for your family. The area where you will be living should be safe enough to live without any fear.

How frequently can you see your family?

Today it is quite easy to keep in touch via the internet. Actual visits back and forth may be subject to distances and costs. Expat retirees with grandchildren may especially feel the inadequacy of virtual means of keeping in touch. For many, leaving behind family and friends could be the hardest part of relocating overseas. It is helpful to give some thought to how you can manage the absence of loved ones. If you plan to see them regularly, you can make arrangements for this in advance, such as checking up on the prices of flights back home or keeping a spare room to accommodate them when they visit. Keeping track of the time distance between the two countries is also important.

Will you be able to build a support system?

Having a strong social network is a significant aspect of a successful retirement, and more so with an overseas retirement. It is healthy to have a sense of belonging in your new destination. This is why another question to ask yourself when planning your retirement abroad is how easily you will be able to integrate. If the location is already popular as a retirement destination, there is likely to be an established expat community, where you can meet and connect with other retirees. Other than expat communities, you need to also check if it is easy to meet new people and make new friends. Does the place offer good social opportunities for such networking to take place?

Is your spouse on board with an overseas retirement?

Retirement can bring with it changes that can affect a marital relationship. An overseas retirement is likely to be more stressful. Both partners must look forward to the change, or there could be challenges down the road. Your spouse must be equally enthusiastic about learning a new language, embracing a new culture, adapting to a new cuisine and also compromising on certain conveniences. He or she must be prepared for possible culture shock during the initial days of relocating. Both must be completely invested in the idea of retiring abroad, as it is a major commitment. If the move is made as a joint adventure, it will create a greater degree of closeness, and keep conflicts and friction to a minimum.

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