April 29, 2018

Retiring Abroad: What Do I Need To Know?

A recent poll on the blog had a clear result: close to 70% who responded said they would not consider retiring abroad. Even so, it is not unusual for me to receive a question about this subject. In fact, it came up several times in my request for new topics you'd like me to explore. At least 600,000 U.S. seniors receive Social Security checks in other countries along with millions of other Americans who live somewhere else. Whether the reason is because of costs, climate, or simply wanting to try something new, becoming an expat is no longer for just a few.

Any move planned for retirement requires plenty of research and thought. Resettling in a foreign country raises the stakes. Luckily, the Internet has plenty of resources to help you decide if this is the right step for you. After filtering out the sites that are pushing a particular country or community, or those that never see a dark cloud on the horizon, I think you will find this is a dependable list of real life factors that need to be considered:

I) Rent instead of buy?

Housing costs are often substantially lower than in the States so your initial thought is to buy your dream home in your dream location. However, there are a few important cautions to that approach. Getting a mortgage as a non-citizen can be difficult, if not impossible. Without a mortgage any tax advantage disappears. Paying cash ties up a large sum of money that you may not be able to get back quickly if the need arises or you change your mind. Signing a contract in a foreign country without qualified legal help is very risky.

Renting allows you to remain flexible without tying up large sums of money. You are free to move somewhere else if the place you picked turns out to be less than you hoped. After a year or two by the beach, you may long for the bustle of a city.

Who knows, you may decide being an expat isn't satisfactory. Moving back home is so much easier if you don't have to sell a piece of property in a foreign land, with different title and contract rules. 

2. How will you deal with family?

Living in another country can complicate staying in touch with your family. You need to determine the costs and ease or difficulty of traveling to see your grown children, grandkids, or other relatives. If you want your family to visit you, consider what that means in terms of passports, visas, or other complications for them.

If you are single don't assume this doesn't apply to you. It is the rare person who doesn't occasionally get homesick or long for a familiar face.

3. Are you willing to learn at least a little of a new language?
While it is certainly possible to enjoy your time in a place where you don't speak some of the primary language, one of the joys of living in another country is taking advantage of the differences in their culture, art, and lifestyle. Unless you retire to a country where English is the primary language, you are missing out on one of the important reasons for moving if you don't converse more like the natives.

4. Being a resident is much different than being a tourist.
Can you adapt to a different pace of life? Two weeks of a slower paced vacation, in a pampered environment where the everyday hassles of real life don't exist is nice. It is very different from making a go of it in a country where punctuality and commitment may have different meanings than you are used to. What you find charming about a locale for a week or two might become irritating if you are exposed to it every day. Decide if your personality can change to match your new home.

In some countries, things we might consider standard can be quite different. Internet access can be slower or only available in public locations. Electricity service may be more sporadic than you are used to. Business may all close on one or more days of the week. Paying bills may require you go in person to each business; online bill paying is not as universal as you may think.

Every country has periods of weather that are ideal for you. But stop and do your research. The warm, sunny days of vacation time may be replaced by rainy, cloudy, humid weather for other parts of the year. Would that bother you?

5. Fully understand the basics

How do you get decent health care in your new locale? Medicare does not work outside the country, except in very limited situations. What would medical care cost? Are quality doctors, clinics, hospitals and pharmacies nearby? As we age these can become vital concerns.

Do you need a visa to stay more than 30 or 45 days? What are legal requirements? How about taxes in your new home? Besides still paying U.S. taxes, you may find yourself on the hook for foreign taxes, too.

Your Social Security check can be direct-deposited to a checking account, but does the local bank charge extra fees for that transfer? Do they put a hold on the money for a period of days?  What about other transfer of money from your IRA or pension plans? Are there fees involved in getting to money to you?

Ok, Enough of the "scary" stuff, what are the good things about retiring in another country?

A) You discover the world is a wildly diverse and exciting place that is just waiting for you to explore. There are billions of people and thousands of places that live differently than what you may be used to. 

B) With proper planning you money will go farther, much farther. In health care alone be prepared to be stunned by how reasonable costs are in places other than the United States. Rents tend to be much lower, household help affordable, even restaurant meals at places the locals frequent are a real bargain compared to American prices. The web site, International Living, has just added a piece on the cost-of-living advantages in several popular expat choices. Click here to read the article.

C) Living in a place that satisfies more of your dreams can make each day a joy. Of course, this could be true staying in the States. But, the variety of climates, locales, lifestyles, and the approach toward life cannot be duplicated.

D) You discover new strengths and parts of your personality. Life in America is very convenient. Things work or are easily repaired or replaced. You turn on the faucet and expect water. You turn on the thermostat and expect heating or cooling.

In most foreign countries that attract the biggest group of expats, these things are not as true. You learn patience, that tomorrow or next  week is soon enough. A store may not stock what you want, when you want it. You realize that slow Internet service or lack of drive throughs on every corner are not really bad things. 

Ok, now to the real experts. If you are living overseas, haved lived as an expat but came back to your home country, or are doing some planning about such a move, please add your thoughts: the good, the bad, the ugly, and the great!
There are lots of folks who are waiting for your input.

And, this is an invitation to snowbirds, too. Living away from your home during winters or summers doesn't really qualify you as an expat. But, being in another country for 4-6 months a year still requires lifestyle and attitude adjustments. Feel free to add your thoughts!

Note: Recently I receieved a copy of a new book to review that is one of the most thorough and helpful of any of the resources I consulted for this post. If retiring abroad interests you, take a look at How To Retire Overseas: Everything You Need To Know to Live Well (for Less) Abroad


  1. We are snowbirds from Canada that spend the winter in Mexico each year. I had a goal that when we retired we would spend the winter somewhere warmer than our home base. When you are going for several months the reality is you can go anywhere in the world but after much on-line researching we ended up in Mexico mostly because it was the easy choice. Mexico is relatively close, no major time zone differences so we avoid any jet lag, and we can fly back in a day if an emergency or something comes up that requires us to be home.

    When we retired three years ago I found a rental house on-line and we set off for a part of Mexico we had never been to before and in fact didn’t even know anyone who’d ever been there. My research had told me that there was an active US/Canada expat community so that would give us a group of people to get us involved locally and figure out the ground rules.

    It has worked out well for us and I’ve joined the local (mostly expat) hiking group and the expat club which offers a variety of activities such as exercise classes, shopping trips to the big city (Guadalajara in our case), and ways to get involved in the local community through volunteer work and charities.

    We have made some good friends there from all over North America but also with locals and people from Europe and Latin America. I think you are dead on with your comment about it not being a vacation. Once you get past 3-4 weeks you are not on vacation – you are living there. Just like your community back home if you want to meet people and stay active it’s about getting involved.

    I have also found that in general the Mexican people are open, honest, friendly and willing to help as I struggle with my limited and mangled Spanish. They don’t appear to mind at all and seem pleased that I make the effort. For those that worry, safety and security has never been an issue for us. More than likely you will not choose to live at a resort, and it seems obvious to me, but do not expect anyone to speak English (though some do) and do not expect anyone to accept anything except the local currency.

    Rent versus buy. Always a topic of conversation where we winter and my take is do not buy until you’ve been there several years, 5 or 6 years would be good minimum. We know several people who have been there 2 weeks and buy a place (the low prices can draw you in) but if you find it’s not for you or find you’d rather be in another part of town understand that the local real estate market isn’t like back home. When the time comes to sell you essentially have to find another expat to buy your house. This is for 2 reasons: A standard US/Canada outfitted house is going to be more expensive than most locals can afford (as you noted Bob mortgages are not usually available even for locals) and often isn’t to their taste. It depends on the market of course but it can take a few years to sell a house.

    The cost of living is somewhat lower but not as much as you might think UNLESS you live like a local. If you live like a local the cost of living will be a lot lower than back home but in my experience most expats usually raise their standard of living rather than go 100 % local. Property taxes are much lower as the stories in the link say but services are a lot lower too. Basically, you get what you pay for.

    If you expect it to be just like back home only warmer or cheaper you will be disappointed. It not like home and each country has its own culture. Those that do best soak up the culture and enjoy it for what it is.

    1. What an excellent comment, David. As someone who has lived this lifestyle for part of each year you are well qualified to give us the insider's reaction. You may not be a full time expat, but have a good handle on what someone must do to adapt to a new country.

      The info on what it is involved in selling a piece of property is important and strengthens the rental argument.

  2. We currently do not live overseas, although some of your readers might consider TN to be far afield from what they are used to :) We have looked at overseas destinations for some time in the event that things in the US get untenable, and would pull the trigger on Ecuador very quickly if we felt like it. Crossed Mexico off due to crime (check out the stories on what is occurring in and around the resorts of Cancun and other areas if you want an eyeopener). Same with Belize; too hot and small in many ways. Panama was interesting due to the currency and prevalence of English, but for a variety of reasons that is out as well. Europe would be a possibility, especially Portugal, but Ecuador seems the best due to costs, climate, proximity to the US, and the people in general.

    Looking forward to reading others comments, Bob, since this is one of those topics that is of more and more interest to people in this country.

    1. One of my brother's family lives in Tennessee and he seems pretty normal.

      Crime in parts of Mexico are an issue, but I don't believe that is a country-wide problem. Cancun is in the midst of an uptick in gang violence at the moment, so you have to do your research. Is the violence any worse than Chicago or Philly?

      I have had a few friends visit Ecuador and love the country, but I don't know anyone who has moved there...interesting possibility. Portugal is gorgeous, but the EU gives me pass at the moment. How will Brexit affect things, or the rise in nationalism in Italy and Turkey?

      Good food for thought, Chuck.

  3. I lived and worked overseas for seven years in three different countries (Thailand, Cote d'Ivoire, France), but I never intended to be a permanent expat, so my situation was different from those seeking to retire in another country. I loved my expat life. It was always an adventure, and I learned so much from living, not just traveling, in other countries.

    It would be hard for me to move away from my kids. I like where I live, and I especially like being a short drive from my grandchildren. However, I have friends who retired to Costa Rica ten years ago. We chat on Skype, so I get to see their paradise home. It does look lovely, and they have a wonderful life there. If my kids ever move away, I might head south!

    1. A couple we know are likely moving from a very humid and rainy island climate to a dryer, sunny setting. At some point you may have had your fill of Portland winters!

      Things like Skype do open up more possibilities for those concerned about staying in visual contact. Like you, we could never move that far away from family. Even so, Betty has announced she is fed up with Phoenix summertime heat. After 32 years, I agree. Flagstaff is likely in our future for a few months each year. That isn't exactly expat, but it quite different from our current home!

  4. It would be my dream to live in Italy as my husband was born there in 1948. He came to Australia when he was 4 and we have visited several times over the last 10 years. As I live in Australia, the thought of moving to the other side of the world and leaving my family is probably the key point that stops a full time move. Perhaps we can look at a 3 month stay as a compromise. Thanks for some great points and happy to have discovered your website.
    Sue from Sizzling Towards 60 & Beyond

    1. A 3 month experiment is a good idea in lots of similar situations: being a snowbird, moving to a permanent home, or just to try on a different lifestyle for awhile. Australia to Italy would be quite a transition, but an exciting one.

  5. I moved to Australia 17 years ago. And many of Bob's thoughts are similar to my experience. But just be careful that you thoroughly look at the costs. The exchange rate is favorable and maybe the cost of buying a house is better but what do everyday items cost? For example, I having been paying between $5.00 to $6.00 for a gallon of gas for most of the time I have been here and pharmaceuticals are very expensive. That said it is fascinating to be involved in another culture (even one we thought would be very similar to the US) since all of your preconceptions of your culture become very obvious when compared to another.

    1. Your final thought is probably one of the biggest pros and cons of considering life in another country. Experiencing a new culture and adapting yourself to what locals do is one of the attractions of living somewhere else. But, for many, that is a major drawback. Wherever you live you become used to how things are done, and can fall into the "that's not the way we do it at home" trap.

      Many expats live in a community comprised of people from their home country. Unless you are very diligent in your efforts to mix with locals and their lifestyle, that choice seems to run counter to one of the major reasons for moving.

  6. Hey Bob. I just found your blog this evening. Most of the retirement articles I've read are pretty dated so I was happy to see this was just posted today. I met my Filipina wife many years ago and that's where we plan to retire. Things are simple there. Hardly anyone is on the clock, you are free to move at your own pace and people are genuinely nicer there. We are conditioned in this country to think and act a certain way. I don't think many people ever consider moving abroad, it's just not something that occurs to them. Their grandparents lived here, their parents lived here, they will live and retire here. I know this because I talk to people. In my 20 + years in the service I've only met one other couple who was retiring overseas, and again, it was because he had an Asian spouse and that gave him the opportunity to see how the other side lives. Having visited the Philippines nine times, there is so much more appeal to living and retiring there than the US. And I catch a lot of hate for that on other forums I've posted on. I feel like the American Dream is out of reach for the vast majority of us. Even if you plan well, there are far too many obstacles that exist to prevent you from achieving "true" financial security, including stagnant wages, inflation, soaring health care and college costs, the list could go on and on. We plan to move as soon as our youngest turns 18, and then put both of them in college over there as well. I was able to fully fund my wife's nursing degree in the Philippines on my own, while most of her co-workers here in the states will be paying off 100K in student loans for the next 15-20 years. The system in this country isn't designed for people to succeed, it's designed to create wage-slaves. That's the reason they don't teach investing or money management in schools here. They don't want people who are financially independent, they want people dependent on credit, addicted to consumerism, evidence of that is everywhere. Don't get me wrong, like I said, I've served my country and there are a lot of hard-working people here who deserve to afford a happy retirement, but that's not something that can be built on hard work alone anymore. It's a stacked deck, and really the best way to move the odds to your favor is to move elsewhere. It feels odd to advocated living in another country as an American who has always lived and worked here but really it's the smartest move we'll ever make. But you definitely have to do your homework. I've visited the country numerous times and have invested months into research, talking to other expats who live there and ensuring we will be capable of making a go of it there. It's not something to approach half-heartedly, but like I said, I can't imagine staying here and working until I'm one foot in the grave. That's what it would take, working until I'm 67 or more, having what, 10 work-free years before I die. What kind of life is that? I'd rather retire 15 years earlier, and enjoy the last 20 or so years of life I have left not working and instead spending that time with my spouse and traveling. Anyway, that's my rant for better or worse.

    1. No rant, just a heartfelt expression of your feelings. Unless someone really goes off the rails, I rarely censor comments. After all, the whole point of a blog is to stimulate discussion of various points of view.

      You have done your homework, have a strong tie to another country, and have valid concerns about staying here. I certainly would encourage you to go for your dream.

      By the way, I have fresh posts every 3 days, so come back often.

    2. This comment has been removed by the author.

  7. We did two overseas tours in Japan when my husband was in the navy (3 1/2 years each), and sometimes I think living here in Hawai'i counts as living overseas because the culture is quite different from what we experienced on the mainland. I am so grateful for the experience though, the good and the bad, and for the opportunities I've had, and what I've learned from them.

    Living someplace is definitely different from visiting. Even though I wanted to live in Japan each time, and here in Hawai'i, and prepared myself as much as possible ahead of time, it didn't stop culture shock from arriving. There just wasn't a way to adequately prepare in advance for the new culture and the differences and frustrations it could bring. I even experienced culture shock during our second tour in Japan, when I thought I had things most things figured out from our first tour. Experiencing it here on Kaua'i was a surprise too, because there is no language barrier, and the money and the stores are the same. Whether Japan or Hawai'i, at first the newness was fun, interesting and exciting, but once the "honeymoon period" wore off depression set in each time. I expected to experience some culture shock, but was still unprepared when it hit and it took me a while to figure out what was going on and find ways to climb out of it. Thankfully it didn't last very long and I adapted, and when it hit a second time (episodes of culture shock can come around more than once) I knew what I was dealing with and could face it head on.

    That being said, living overseas still holds a great deal of appeal for me (and my husband) - we haven't taken it off our list of possibilities yet. Where we would go if we decided to live overseas I have no idea. We'd go back to Japan in a heartbeat, but there is no visa for retirees, and even though our son is a permanent resident (it only took him 20 years to achieve that status even though he is married to a Japanese citizen and has children) neither he nor his wife can sponsor us. We're eager to see what we find on our travels later this year - maybe one of the places we stay will appeal to us enough that we'll want to go back and try it out for a while.

    1. For personal reasons I'd like to know more about the types of cultural shock you encountered on Kauai. Having been to the islands multiple times I am aware of shifting feelings towards mainlanders, the different attiitude toward time and schedules, language, and a much slower pace of life. What else did you find? If you prefer, please send me your unfiltered feelings by email!

      It is interesting to learn that Japan has no way for retirees to move there permanently, even with family.

  8. My friend just retired and moved back to the Phillipines where all her family still live. She said it is very cheap to live there compared to the US. Her concerns are the rising crime rate. She and her husband who is Caucasian will have her brother as a body guard when they go out. She does not feel in danger but she feels her husband might be due to the strong arm robberies on the streets. She also said that medical care is not up to US standards and plan to be able to use their Medicare in the US if the need arises. Other than that they are expect ion to have a wonderful retirement.

  9. My brother-in-law is married to a Filipino woman, who has become a citizen, but has multiple family members still there. Both of them have traveled back to the Philippines and are attracted by much of what the country has to offer.

    As you mentioned, one of the big wild cards at the moment is the nationalistic political environment and extrajudicial treatment of some criminal elements. For someone used to a culture of laws, that can be rather upsetting.

  10. Reading through the comments one thing that keeps coming up is adapting to a different culture. I have a story about that.

    My wife is English and our daughters have dual British citizenship through their mother. All of my wife's family still live in England, my wife came this side of the Atlantic on her own at the age of 21 (I met her here in Canada 5 years later). My daughters have lots of extended family living in England and they were very close to their grandparents there. To say we have visited England 10 times with our daughters is understating it by a lot. If there is anyone that you think wouldn't have culture shock moving from Canada to England you'd think it'd be my kids.

    Yet after university one of my daughters went to live and work in England "just for the experience" and SHE felt culture shock. Even she was surprised. She had a support system of relatives there, had frequent exposure beforehand, her own mother is of that culture but it still happened.

    While some of us older types aren’t necessarily inflexible the lesson of my daughter and some of the others that posted here is: If you are moving to another country to live full time DO NOT underestimate adapting to a different culture.

    1. Canada and England? Yes, that is very interesting. I would be interested in knowing more.

    2. I think for my daughter it was primarily was around social interaction. Essentially the unwritten rules around socializing are a little different and in the year she was there I don't think she was ever able fully understand them. I think we don't appreciate how much we depend on the uncodified but widely understood ways of interacting our own culture has until suddenly we are a "fish out of water" in a different culture.

  11. I just returned from a vacation in San Miguel de Allende in Mexico which is noted for an expat community.
    While there I bought a book titled “San Miguel de Allende: A place in the heart.” The author is John Scherber. Each chapter is a first person account of expat experiences in San Miguel. Your readers might enjoy their insights about moving to another country.

    1. Excellent! Thanks, Meg. That book is available on Amazon.

  12. For over 35 years I worked as a social worker for a veteran's hospital, one of my most interesting jobs there included working in the Geriatric clinic, for veterans 65 years and up. This experience really opened up my eyes to living the expat life. Many of my clients had, in their younger old age (60's +) sold everything including their home and moved overseas. Primarily to Central and South America but quite a few to Asia and some to Europe. The problems occurred as they aged, they came to the VA for healthcare and it became increasingly difficult to rent a place temporarily for their visits here due to limited funds. Others health failed and they had limited supports in their chosen country (despite the availability of cheap in home care). Others left because the political climate in their chosen country had changed, or there was a large uptick in crime and gang activity. Others became fearful that they were targets because they were "gringos" and as they became frailer became easy pickings. All came back in the hopes of buying a home here (we live in Miami) only to find that in the 15-20 years they had been gone, they were now priced out of the market, unable to even afford even a studio rental in a "safe" area of the city. They were no longer as mobile, were no longer able to drive or didn't feel safe navigating the crazy Miami traffic, and public transportation in Miami is not great, they found they were dependent on shared ride programs for the elderly which took them all day, ect. I could go on and on. Part of the reason was bad planning, they sold everything and went through all their sales gains and savings living it up overseas and were left with only Social Security or a small pension.
    Their experience opened my eyes and is one reason why I would never let go of my house here in the US. DH and I have traveled extensively and would love to live in Spain, where our grandparents were from. However, I think if we did this we would do it for 3 month periods, without giving up our home. We have traveled to various parts of Spain at least 6 times in the past 10 years and really do love it, but I think there is much to be said for having a safety net at home.


    1. I would follow your path, Teri. Coming back to your home country after being gone for years would be very difficult. The only way I see it working would be to move in with family or relatives, but that is never guaranteed. I am a fan of 2-3 months somewhere but never giving up my home base.

      The VA people in your example probably had only two viable options: manufactured housing or living full time in an RV.