Finding a special place in the sun and retiring abroad is a dream for many. Retiring overseas offers many benefits for those who can make it work. In this post we’re going to examine the questions of why retire abroad and offer some insight into how to prepare for retiring abroad. We will also look at the pros and cons of, as well as the costs of retiring abroad. Read on to find out more!
Why Retire Abroad?
First let’s look at the reasons why people retire abroad to begin with.
● Change of Pace
After a lifetime living, working and grinding in America, many retirees simply feel ready for a change of scenery and a more relaxed pace of life. Whilst there are many great things about life in the US, there is no denying that it is a high pressure, high stress society. On the other hand, in dream retirement destinations like Greece, Thailand and Mexico, the pace of life is typically a lot gentler and people take the time to enjoy themselves.
Then there is the weather. Cities like New York experience harsh, cold winters and stifling hot summers. Aside from being plain unpleasant, these conditions can actually be dangerous for us the older we get and each year. Seniors die either in cold snaps or in heat waves. This is why many Americans aspire to retire to the parts of the Mediterranean, Southeast Asia or Latin America where the climate is kinder and more temperate.
Then of course there are the cost benefits involved. The US is amongst the most expensive countries in the world and life here is only getting more expensive. Remember that a retired person has to ensure that their pension and savings lasts them the remainder of their days but unfortunately, the rising costs of American life could drain through it prematurely.
Countries like the Philippines, Thailand and Belize are comparatively very cheap to live and that American pension will go a lot further – especially considering the $1000’s of dollars saved each in heating costs.
The Challenges of Retiring Overseas
While retiring abroad is a dream for many and can work out very well, it is not exactly straightforward. There are actually many challenges involved in retiring abroad which must be overcome along with some other drawbacks which retirees may simply have to accept.
● Homesickness & Family Issues
Moving abroad can be wonderful and even as a retiree, it is possible to begin a new and enriching chapter of one’s life. However, even the happiest, most settled ex-pat will feel some homesickness and will miss something about the US. Bouts of homesickness do tend to come and go and are usually not severe enough to make anybody seriously regret their move.
However, missing family members is a different beast. This can be particularly hard to take if our children are having children of their own – watching grandkids grow up via a Zoom meeting is not the same as been there and teaching them how to fish.
Most retirees aim to re-settle in the developing world and developing countries do experience instability from time to time. Political coups, civil wars and civic disorder are rare, but not unheard of in the developing world and these issues can cause huge problems for expats, especially ones who are perhaps not as healthy and exuberant as they used to be.
Before moving abroad, any retiree needs to educate themselves about the healthcare standards in their new home. Our health deteriorates as we age and the likelihood is that we will need more medical care in our twilight years than in the rest of our lives.
Many countries have excellent private healthcare facilities that expats can usually comfortably afford but it is crucial to look into this before making any move.
● Costs of Retiring Abroad
Retiring abroad can be seriously expensive. Firstly there are the associated costs of buying or leasing a property including local lawyer and translation fees and then there is the cost of moving one’s personal possessions to another country – transporting a shipping container generally costs thousands of bucks.
On the other hand, it may work out cheaper to leave personal possessions behind and simply buy them or rent them again.
American citizens are legally obliged to pay their taxes in the US regardless of where they live or earn money. However this does not necessarily exempt them from paying local taxes which means a lot of American expats (whether working or retiring abroad) pay taxes twice. This can of course prove impossible for some pensioners who simply cannot afford it.
● Transfer Fees
Moving one’s money from the US to another country can be expensive. Foreign transfer fees can be high and really add up when it’s large sums of money. As such, moving an American pension into a Thai, Greek or Mexican bank account can put a serious dent in its value. That said there are ways to cut costs here and ultimately, it will usually prove to be a price worth paying.
Final Thoughts on How to Prepare For Retiring Abroad
For sure, retiring abroad remains a dream for many. Retiring overseas can offer a better standard of life than spending one’s autumnal years in the US so it is easy to understand why retire abroad. In this guide we have hopefully shown you how to prepare for retiring abroad and offered something of a heads up about the costs of retiring abroad. So why not make that dream come true?!