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.