Your health
Unlike your Social Security checks, Medicare coverage stops at the border. Few U.S. employers offer health care coverage to expat retirees, and U.S. carriers typically don't provide individual coverage to Americans living abroad.
Although some countries offer world-class medical facilities, as well as government-sponsored health care so affordable that it can make sense to go without health insurance, there are some countries where the quality of health care is questionable. Also keep in mind that if you plan to return to the United States and sign up for Medicare later, your premium will be 10% higher for each 12-month period you could have been enrolled but were not.
Your cost of living
Although many countries around the world have a significantly lower cost of living than Western countries do, many places that once were havens for cheap retirement living are not nearly as cheap as they used to be. Some retirees end up losing money rather than enjoying the savings they had anticipated, thanks to a weakening dollar. A long-term decline in the U.S. currency means a downward adjustment in income for those living abroad. Further, Americans feeling the pinch of inflation at home might be shocked to find even higher inflation, sometimes in double digits, in less-developed countries.
It is important to figure inflation and exchange-rate fluctuations into your retirement budget.
Barriers to entry
While rules vary from country to country, many expatriates need to obtain a visa and have it renewed periodically for a fee, which requires some proof of income as a way of showing that you will not become a financial burden on the government. Some countries, Canada included, require a clean bill of health to gain permanent residency.
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Complicated tax issues can also make it difficult to buy property abroad. For example, buying property in Switzerland is harder than in many other European nations because of rules imposed more than 30 years ago limiting what most foreigners can buy and where they can buy it. Foreigners who want to buy real estate near Mexico's coasts or borders need to lease the property from a bank trust.
But if the idea of retirement abroad still appeals, know this: Countries that are among the most popular retirement destinations -- based on tax burden and cost of living advantages -- include Mexico, Panama and Portugal.
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