3/5/2013 6:45 PM ET|
Retiring overseas? 11 things to know
It's a big world out there, and an array of issues could turn your dream retirement into a nightmare. Here are some points to ponder before you pack.
After three international moves across three continents with two kids, a dog, a turtle, a husband and two businesses, I've learned a few things about relocating overseas. Here are 11 issues you should consider if you're contemplating retirement abroad:
No. 1: The first step to any move abroad is to set your priorities and to be honest in the process. Decide what matters most to you, and remember to include things like evenings at the theater, friends whose company you can enjoy in English, the cost of living and a reliable Internet connection. And don't kid yourself about life overseas. If you can't imagine life without a Maytag washer and dryer, for example, you may need to rethink the entire proposition.
No. 2: Make all decisions jointly with your significant other. Your spouse's ideas about what he or she wants and, just as important, what he or she will not tolerate, may shock you -- and vice versa. It's better to get these perspectives out in the open sooner rather than later.
No. 3: Recognize that no place is perfect. No climate is ideal. No city is 100% crime-free. Manage your expectations.
No. 4: Understand that no other country on earth is going to seem as comfortable, convenient, or efficient to you as the United States. In many places, shops, banks, dry cleaners and government offices close for lunch and call it quits for the day by 5 p.m. You can't run errands on your lunch break or on Sundays. In some countries, you must pay utility bills in person. In the developing world (not only in Latin America and the Caribbean, but in emerging Europe, too), appointments and schedules are more like suggestions than commitments. And only a handful of real estate markets outside the U.S. operate with multiple listing services, meaning the search for your new home in paradise will likely be complicated and extended.
No. 5: Rum and real estate don't mix. I call it margarita madness. It's a syndrome that can set in shortly after your arrival in any sunny, sandy, tropical locale. The water is turquoise, the sand is soft, and the palms are swaying. A guy you just met and shared a few rum punches with in a bar downtown is now driving you along the beach road bordering his development, pointing out where the clubhouse and marina will go and where your new home could be positioned. Look at the view. Feel the breeze. It doesn't get better than this. And he has only two lots at this price remaining. Would you buy a piece of real estate under those circumstances back home? A piece of property you're seeing for the first time in a place where you've never been before from a guy you met in a bar? You need to do more due diligence when investing in a piece of property in another country, not less.
No. 6: There's no such thing as the world's top retirement haven, and no one-size-fits-all Shangri-la. The only one who can determine the best place for you to retire is you. There are dozens of beautiful, affordable, friendly, safe and charming places where you could choose to spend time in retirement. It's a question of what you're looking for and what's most important to you.
No. 7: Your U.S. health insurance likely won't cover you once you leave U.S. soil. However, you have good options for both health insurance and health care overseas. Start by determining whether you'd like international health insurance. (The world's biggest international health insurance carrier is Bupa International.) Local insurance in the country where you'll be living can be very affordable (sometimes less than $100 per month), but it will cover you only in the country where you're living, making it an unrealistic choice if you'll be dividing your time in retirement or traveling regularly. Some people also choose to go without health insurance at all, which isn't as crazy as it sounds. In some parts of the world, medical costs are so low that it can make more sense to cover them out of pocket than to insure against them.
No. 8: Rent first. Don't buy a new home in paradise until you've tried that potential home on for size for several months. Even if the country turns out to be your ideal retirement haven, maybe the city, region or neighborhood where you first land isn't where you ultimately want to be. Give yourself time to get the lay of the land before you commit to a property purchase.
No. 9: Get local tax advice in the country where you're planning to reside before you take up residence. When we moved to Ireland 15 years ago, we met with Ernst & Young in Dublin during one of our pre-move visits. This turned out to be one of the smartest things we did (though we didn't realize it at the time). In Ireland then (this is no longer true today, as the relevant tax legislation has been amended since), if you organized your financial affairs according to a certain strategy, you could reduce your annual Irish tax burden substantially. The strategy had to be employed before we had a physical address in Ireland. If we'd waited until we'd taken up residence on the Emerald Isle, our annual tax obligations would have been considerably larger. Understand the tax situation in the country where you're intending to retire before making your move.
No. 10: Pay attention to your gut. A place either feels right or it doesn't. All your research and planning in advance is important, but nothing substitutes for the feeling you get when you hit the ground.
No. 11: Be prepared for panic. Over nearly 30 years of speaking with people who have made the move to another country, I've yet to meet one who didn't experience a moment of, "Oh, my gosh, what in the world have I done?" Expect to question your sanity for having ever considered the idea of moving so far from home and hearth. Prepare for it, and understand that it will pass. Everything you made the move for is waiting for you. You just need to give your perspective time to adjust.
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I'm stunned by the number of people who seem to expect that the US laws & constitution must apply in other lands. They seem offended that the foreigners don't recognize US laws and view everything different to the US as inferior.
That attitude is a one-way ticket to disappointment. If you go to live in a place, you need to accept that place on its own terms. e.g. Some countries don't allow shops to open on Sundays because they think it's better *not* to open on Sundays - they think their law is superior, not inferior to the US approach.
Yes definitely look before you leap to live in another country. Dealing with visas can cost a chunk of money. Also I agree health insurance bought will only cover you in that country and there can be age restrictions and prior condition exclusions.
When it comes to land and house purchases definitely do research before buying in the area.
Also find out about all fees and taxes you will have to pay. They can be quite costly.
Sit down and check out all day to day expenses along with what is available and what is not available.
This article is not bad at all and I do live in another country in Latin America.
Most these comments could just as easily apply to moving to another state or city in the U.S. If you have lived in a large city all your life and then decide to retire to a resort area or small town, all of these comments apply and not just in another country. Since I live part of the year in another country, I can tell you about some of the pluses and minuses.
1. Unless you move to somewhere like Europe the cost of living will be much less than the U.S.
2. Medical insurance may or may not be so important in that the cost of medical will be much less than the U.S. The U.S. has the most expensive medical system on the planet including dental care. The latter is ridiculous as to what it costs you.
3. Unless you move to some remote tropical island, all the communication services are readily available and usually cheaper than the U.S.
4. Why do Americans worry about speaking another language apart from English? If this is a problem, stay in the U.S. and travel nowhere.
5. Unless you move to Mexico, realize that your only way home is by plane so plan for that.
6. Usually the biggest tax that will impact you is VAT. You can get around that some by shopping at the open air markets on the weekends.
7. You do have to be aware of any crime problem. Do not travel to any area of the country where there is a serious crime problem.
8. One thing not mention, are the legal requirements for living in the country. You go to rent anything or sign up for services, generally you must have legal residency in the country. Be sure to check.
9. Driving in the country, you had better check to make sure you do not need an international drivers license.
10. Learn about the creepy crawless. From Southern Mexico through S. America you must be aware that any location below 3,000 feet in elevation can be dangerous due to chagas disease. There are also risks for many diseases, typhoid, maleria, cholera, yellow fever, and others.
11. Single man or woman, be aware of the cultural relationships between men and women. DO NOT go on rumor or what you read on the internet. Talk to people who actually live in the country.
If you can go it, then you will do just fine.
Warm most of the year does require some level of A/C expense, but almost no heating.
NO STATE INCOME TAX should be a biggy.
Inexpensive housing and at least average if not cheaper food and it should be on an interstate freeway, that means easy escape for vacations and at least reasonable amenities along that corridor, an international airport is a nice feature.
Suggestion, south Texas.
The most important aspect was not covered, visas. You need permission to live in a foreign country which requires providing financial information and often purchase of property to stay any length of time in a foreign country. The other aspect that may be less important is critical, you need to have at least a working knowledge of the language and culture if you are to have any success living abroad.
As an aside, the incompetence in our news is monumental, especially our wasteful, distorted and often ineffective foreign policy by these two political parties, which by the way are making life harder for us all, including the recent devaluation of housing caused by the financial bailout of Wall Street where no one was indicted let alone jailed for corruption.
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