While some Americans choose to spend their well-deserved departure from the workforce alongside the familiar comfort of home, others take the time to change their lifestyle by retiring abroad. Adventurous as it may be, this retirement option involves making a great deal of choices and careful planning. Conducting adequate research in advance of retirement allows seniors to transition into retiring abroad as smoothly as possible.
Americans preparing to retire abroad must choose a country to retire in that fits their personal and financial needs, understand important tax information and consider their future health care options. There are various options, such as joining an expatriate community or utilizing another country’s more economical medical insurance, that could minimize the adjustment process and even become financially beneficial. Consult the following information to learn more about the changes to health care, taxes and cultural adjustment involved with retiring in a foreign country.
Finding the Best Place to Retire Abroad
Finding a new country to live in is a big decision for Americans who have decided to retire abroad. Although many workers’ first thoughts about where to retire involve images of a beautiful beach or mountain landscape, choosing a new country to live in actually requires a wide array of considerations and decisions beyond choosing a beautiful place. However, your desires about location, scenery and culture are also important when finding the right country to retire in for you.
Conducting research on the best places to retire is beneficial in finding a country that fits your retirement needs and desires. Some factors to think about for each country considered include the following:
- Cost of living
- Health care options
- Ease of access
- Language and cultural customs
Generally, retirees would like to enjoy stress-free, safe living in an affordable country. Making sure your needs for each of the above factors are met in your new country is the best way to choose where to retire. When making this important decision, take the time to research the pros and cons of each country in which you are interested in retiring. There is a wealth of information online about retiring abroad, so be sure to use all available resources when conducting your research.
Taxes and Retiring Abroad
When making decisions about retiring abroad, you should consider important tax rules and regulations that apply to seniors who have moved out of the country. Depending on your citizenship status and/or sources of income, you may be subject to additional taxes from the U.S. or your new country of residence. Understanding the tax laws that apply to your retirement situation allows you to avoid complications with the U.S. or any foreign government.
Other financial factors to consider are exchange rates, how to collect your full retirement income and how to open a foreign bank account if necessary. Having stable finances and access to your savings and/or income is especially important when residing in a new country.
While figuring out tax information can be complicated, there could be financial benefits to living in a foreign country. For example, if the country you decide to retire in has a significantly lower cost of living than the U.S., then you will be able to save on everyday expenses such as housing and food.
Health Care and Retiring Abroad
Having adequate health care coverage and access to medical services is another important aspect of retiring abroad. Seniors are more prone to needing medical care, so having insurance and savings for health care can bring peace of mind to retirees. Moving to a different country for retirement requires health insurance considerations beyond the scope of the American health care system. The cost of medical care, available health insurance plans and quality of care should be considered when choosing a place to retire abroad.
Retired seniors can get international health insurance, medical insurance within their new country of residence or travel insurance. Some countries provide universal medical coverage for citizens if they meet the necessary eligibility requirements. The type of medical coverage policy you take out depends on many factors including your personal and financial situations, citizenship status, whether you are spending a long or short amount of time outside of the U.S. and more. Researching available coverage plans is the best way to find insurance that fits your needs and desires.
When determining what country to retire in, you should consider the cost of medical care within various countries. If the cost of medical care is low or extremely low compared to American health care costs, then you may be able to cover many medical expenses with your retirement savings. Conversely, living in a country with very expensive medical care could be financially stressful.
Expatriate Communities for Retirees
For retired seniors living in a foreign country, making the transition to the language, culture and surroundings can be an intense process. Living in a country where people do not speak English and/or you do not know the language is difficult for many seniors. Some may feel a sense of isolation when dealing with cultural and language barriers. Furthermore, while natives in some countries are welcoming to foreigners, natives in other countries are not. Retirees acclimating into life in a new country may look for ways to communicate with other expatriates for comfort, connection and guidance.
Expatriate communities exist in foreign countries as places where American retirees can connect with other expatriates to help with transitioning into living in a new place. Through these communities, retirees can learn about the culture, language, economy and other aspects from expatriates who have made the same transition. This way, acclimating to the new culture can be less intimidating for many seniors.
While there are many benefits to expatriate communities, there are also negative aspects. Seniors who live in expatriate communities could become isolated from the outside culture if they only remain in contact with other expatriates. In these situations, retirees may never get to experience the authentic culture of their new country of residence. Natives in the new country may have negative feelings toward expatriate communities, which could cause tension within an area.
While expatriate communities are beneficial for transitioning into life in a new place, seniors living in foreign countries should be sure their involvement with an expatriate community does not hinder their ability to fully immerse themselves in the country’s culture.