More and more American retirees are looking overseas for the ideal place to retire. We’ve all heard the stories of American’s going to Central or South America, Asia, and even Europe for retirement because their hard-earned dollars go further. They escape to a beautiful place, and their quality of life rises dramatically. But is it real? And can you do it?
Some areas are known for their lower costs of living including real estate, food, and entertainment. But what many people don’t consider is the cost of healthcare, transportation costs, banking, and other necessities. It is easy to get lost in the romantic idea of retiring overseas, only to find there are some challenges you may not have expected.
First, it is vital that you travel to the destination you are considering – at least twice, and preferably more. Travel first during the winter, and next in the summer. Here are 6 things to do on these trips:
- Pay attention to your physical reaction – even if you have never had allergies before, you may experience adverse reactions to local flora and fauna. You probably don’t want to spend your retirement sniffling and sneezing.
- Engage with the local expat community. Is there a thriving community that you can quickly become immersed in? Are the people open, warm, and friendly?
- Set meet and greet appointments with a couple of primary care physicians in town. Get acquainted with the healthcare facilities, take a tour of the local hospital, and make sure that you have a physician you like once you move.
- Explore banking options. In many areas where Americans are electing to retire abroad, there are U.S. banks and that can make the financial transition much easier.
- Meet with a real estate agent, and determine if it is best to rent or purchase your dream home for retirement. Remember, local laws can differ dramatically depending on the country you choose, and it is vital that you understand your rights and responsibilities as a property owner.
- Speaking of local laws, it is important to meet with a couple of local attorneys while you are visiting. You will need to learn about local Visa and residency requirements, driver’s licenses, and more.
Second, it is imperative that you understand the tax implications of moving abroad. Remember, just because you live overseas doesn’t negate your responsibility to pay U.S. Federal income taxes. While there are some countries that have treaties with the U.S. that protects against double taxation, it is important to understand the tax liability or benefits before you make your final selection.
Third, while the cost of living can be significantly less than in the U.S. for many locations, you will still need access to your retirement funds. If you are dreaming of retiring abroad in 2, 5 or more years, it is wise to meet with a personal accountant to help you prepare financially for your retirement. Financial planning for retirement takes time and consideration; a personal accountant can help you determine how to best meet your retirement goals.
From Europe to South America, from Central America to Asia exciting retirement destinations abound. In fact, many countries are now competing for American retirees. Check into all of your options, do your research, make connections, and start developing your financial strategies with your personal accountant now.
