Retiring Abroad

If you have decided to retire abroad instead of retiring in the United States, there are several crucial factors you will need to consider before finalizing your decision.

While there are advantages to retiring abroad, you will need to be mindful of the financial and logistical implications of settling in overseas. No matter where you decide to retire, there are practicalities you must plan for to ensure you are handling the process properly.

Understanding the financial aspect of retiring abroad is a necessity, as you will need to ensure you are paying your taxes properly for the United States and for the retirement country of your choosing. Once you have determined where you want to move you can begin learning about the structure of your selected location. The more research you conduct prior to moving, the easier it will be to start enjoying your new life of leisure.

How to Choose the Best Location

The first step in retiring abroad is choosing the location that works best for you. Whether you are retiring with a partner or you are retiring on your own, you will need to find the right place to retire before planning your move. Once you have decided what is more important to you in a new country you will be able to narrow down your search considerably. Creating a list of recreational activities you enjoy can help you search for locations where these activities are available.

If you enjoy trying food from other cultures, you may want to retire to an area of the world where trying new food can become a commonplace occurrence for you. Countries such as Malaysia and Portugal are known for their cuisine and choosing to live in one of these places may be the best fit for you. If you enjoy country landscapes and solitude, you may want to move to Ireland or Norway. Some places have large U.S. expatriate communities to help you acclimate to your new life abroad. If this is something you are interested in, make sure to see what the communities are like before committing to a retirement destination. Wherever you choose to go, you will want to select a location offering the amenities and services you desire the most.

Additionally, when you are choosing the best location for your retirement abroad you will want to consider the cost of living in each place. If you are retiring with a limited budget, you may need to select an area where the cost of living is low. Settling in for retirement in a major city could prove costly as you are paying to live in a desirable location. Determine what you want to spend per month to live in a foreign country and see what is affordable before heading to one place over another.

How to Manage Your Finances

Retiring abroad is an exciting life change and preparing for this properly will help you to enjoy the change as much as possible. Before you begin the process of moving overseas, you will need to settle your finances. To achieve this goal, you will need to:

  • Maintain your American bank account to keep your earnings safe in a federally insured bank. While you will want to establish a bank account in the country you are moving to, it is best to leave a portion of your earnings in your American bank account. This will allow you to adjust to your new cost of living more easily and will ensure a portion of your funds are secured back home as well. You can transfer money from your bank account in the United States to your new bank account overseas to make the transition easier.
  • Secure the right credit card before making purchases in your new location. Some credit card companies will apply a foreign transaction fee to the purchases you make overseas even after you have contacted the company to inform them of your move. Choosing a credit card without foreign transaction fees is preferable as this will allow you to avoid the 1 to 3 percent increase on your purchases. You may also find it useful to transition into a credit card with travel rewards as you will be able to amass points while living abroad.
  • Understand how your taxes work both in the United States and within the country you choose to live in. Taxation in the United States is based on citizenship, so you will need to continue paying your taxes in America even after you have retired abroad. You will also need to pay taxes to the country you are living in overseas and will need to research how to complete the foreign tax process prior to filing. You may qualify for a foreign tax credit to reduce your tax liability in the U.S. if you pay foreign and American taxes with the same income.

Ensuring you are prepared for the financial aspect of retiring abroad will help you to make the most of your experience without placing yourself in an unfavorable position in the process. Being mindful of your bank accounts, credit cards and taxes will help you to avoid any potential issues that may arise once you have begun your retirement.

 

How to Handle Your Health Care

Another important aspect to consider before retiring abroad is how to handle your health care plan. Certain health care plans, such as Medicaid, will no longer offer coverage once you have moved out of the United States. To ensure you are receiving full health care coverage during your retirement you will need to ensure in advance your current plan offers coverage for individuals living overseas. If you find your health care plan will not be active after moving from America, you may want to switch to a foreign healthcare plan. The options available abroad tend to be cheaper than options available in the United States, so you may choose to make this decision to save money if you prefer to do so.

For those of you who have an ongoing health issue, selecting a new home located close to an international-standard hospital may be in your best interest. This will provide you with the proper treatment you need while living abroad and will additionally provide you with the medical amenities you enjoy in the United States. If you have hesitations about receiving medical treatment from someone who does not speak English fluently, choosing to have your medical needs attended to an international-standard hospital can relieve this tension.

 

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