Retiring to another country is a very popular option for many people. Malaysia and Thailand are the top retirement countries for Australians, while many in the USA move to Panama, Costa Rica and Mexico. UK citizens have been flocking to southern European countries in recent years for their retirement, but this may be affected by Brexit.
Moving to a new country is an exciting prospect. There’s nothing more rewarding than settling down somewhere new and beautiful. However, the process of retiring in another country is certainly not a straightforward one. There are a lot of things you need to prepare for. Here’s what you need to know:
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Get Health Insurance
Having access to good quality healthcare is crucial, especially for older retirees. No matter where you retire, you’ll need to make sure you are well covered with a health insurance plan. However, your health insurance plan from back home may not apply once you move overseas. In the U.S for example, Medicare doesn’t cover health services outside the country. In some other countries, it is mandatory for residents to sign up to the country’s local health insurance scheme. Find out which rules apply to you before committing to move to another country. The cost, availability and quality of health care may influence your decision on where to retire.
Understand Tax Obligations
Understanding the tax laws is another important thing to consider. In some cases, you could be taxed by your home country, even if you’ve moved abroad. U.S citizens and residents are required to pay tax on any international income. So if you’re moving abroad from the U.S, you may have to pay tax in both countries.
Most other countries do not tax on international income. However, if you are retiring to another country you may need to pay tax on any income you get while in that country. Make sure you do your research about the tax laws in your country of destination and your home country. To ensure you have all the correct information, it’s wise to meet with an expert.
Update Your Estate Plan
When you decide to retire abroad, you will need to make important new decisions about your estate. Keep in mind that your new retirement country may have different laws about wills and estate plans. You will need to have an estate plan in place in your chosen retirement country. An attorney will be able to help you with this complicated process.
Be Aware of Currency Fluctuations
The strength of the local currency in your chosen destination could potentially take a hit to your income. While currency fluctuations can be unpredictable and out of your control, you can still be prepared for the worst. The best thing to do is to meet with a financial advisor. An expert will be able to help you manage your finances and possible currency fluctuations.
Social security is a major source of income for American retirees. If you are an American retiring outside of the U.S, you may be eligible for social security benefits while living abroad. The amount of retirement benefits you receive will depend on your work credits. It may also depend on other factors, like your retirement age.
Research Broadband Options
Moving to a new country is expensive in itself, so you’ll want to keep any extra costs down as much as possible. One of the first things you’ll need to do when you arrive is to find a good broadband plan. There are many types of broadband plans you can get, depending on where you live. To ensure you get the most cost-effective plan, you’ll need to do a fair amount of research about your options. Make sure to do a test run before committing to any long term deal.
As you can see, retiring abroad requires a lot of careful planning. But that’s not to say you shouldn’t go through with it. As long as you do your research properly and follow all the right steps, you’re good to go. Enjoy a new lifestyle overseas make the most of your retirement!
This very useful list comes from an article by Mark Story published in Money Magazine, August 9, 2018
Questions to ask yourself before retiring to another country
- Will I need to work offshore to support myself financially?
- Do I understand the complexities of being a non-resident for tax purposes?
- How will retiring overseas affect my super?
- Will overseas healthcare be adequate and affordable?
- Can I take my age pension with me?
- What should I do about private health insurance?
- Where do I want to spend my “last stages” of retirement?
- What’s the best way to invest while living overseas?
- How will I manage living away from friends and family?
- If I return home, will I qualify for the age pension?
Our Guest Author: Maia Fletcher is a freelance writer who lives in the sunny city of Gisborne, New Zealand. When she isn’t busy with her blog, Maia produces articles for local businesses such as Keith Andrews.