Personal FinanceTips To Retire Abroad Successfully

SpenderrificSeptember 6, 20216010 min

Do you want to retire abroad?

Retiring abroad is an exciting prospect for many. In movies, characters talk about how they look forward to days when they can sip coconut water while lounging under shades in foreign islands. Without thoughts of returning to work.

People retire abroad for various reasons. Some people do it to live closer to their relations who live abroad. Other retirees relocate abroad to enjoy cheaper healthcare in their old age. Still, others only want a change of environment, where they can enjoy their final days.

Are you thinking of retiring abroad? The decision about where you will retire is a serious one. Relocating as a young person can be challenging. Advanced age will not make it any easier. Therefore, you need help. 

These tips can help you retire abroad successfully

Going on retirement in a foreign country can be both exhilarating and overwhelming. With preparation, you can get over the challenging parts easily.

Below are tips to help you retire abroad stress-free:

Related post: How much to save for retirement

Decide your destination

The first decision you must make is where you will retire. To make this decision, you have to consider many factors. For example, do you have relations abroad? If you do, consider spending your final days living close to them.

As you grow older, your health may no longer be what it used to be. The healthcare facilities in the country you plan to choose should play a vital factor in your choice. Contact ex-pat retirees in the country you plan to move to and ask how they navigate the health system.

At some point, you may require assisted living. Think carefully about this before you make your destination choice. Assisted living facilities in some countries may not be what you want.

You may also consider countries that have been tried by other retirees, as it is easier to learn from the experiences of others.

If you have no plans to learn a new language, you may have to limit your choices to English-speaking countries. Conversely, moving to non-English speaking countries may require you to learn a new language.

Apply for Residency Visa

When you pack your bags and head to another country, you are a tourist. However, a residency permit will allow you to live in the country permanently.

Each country has its unique requirements for residency. Contact a relocation expert, and ask about the documents you need for a residency permit at your destination. Keep in mind that you may have to pay for the residency permit.

Countries like Columbia and Panama have specific visas for retirees. The only condition for these is that you must demonstrate that you earn a certain amount of income in a month. Inquire if the country you wish to relocate to has these options.

Do you have a parent or grandparent who was born in your destination country? You may qualify for dual citizenship by descent. Contact the foreign ministry of the country and make inquiries. You may also contact the local US embassy in the country.

Plan your finances

Notify your bank that you are moving abroad, and tell them you want your bank statement and other correspondence sent to your email address. Before you leave, learn how to use online banking safely.

When you use your bank cards abroad, you may attract high transaction fees. To avoid high charges, open a local checking or savings account.

For Americans, if you have bank accounts abroad, FACTA (Foreign Accounts Tax Compliance Act) requires you to report this to the US government. You still have to pay taxes on your earned income as well. The IRS collects taxes based on citizenship, not residency.

As you plan your finances, do not forget about Dear Uncle Sam. Yes, taxes are a significant factor in relocating abroad, too. How does the taxman in your country treat taxes for those living and earning abroad? 

Another issue to take into consideration regarding your finances is healthcare. Some countries have pricier healthcare systems than others. Therefore, even if healthcare is less costly than in your home country, you need to save enough for such expenses. You also need to think about any emergency evacuations back to your home country if necessary. 

Avoid selling your home before you leave, as you may soon find out that the place you moved to is not what you thought it would be, and you want to return.

When you get to your destination, do not buy a home immediately. Rent a place. Avoid decisions that may tie you down to unfavorable situations. If you need guidance, do not hesitate to contact a relocation expert or the local embassy.

Take Language classes

If you decide to move to a non-English speaking country, language classes may benefit you in several ways. First, you may meet other individuals who plan to move to the same country at a language class. Making friends with them will make settling easier for you at your destination.

Learning the language would help you get around and do basic things without any help.

Laws and instructions in your destination will be in the local language. Learning the local language will help you become law-abiding and also help you communicate with law enforcement and other local officials.

If there are no classes in the area where you live, language apps like Duolingo can be of great help.

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