Fund Your Life Overseas

There’s a pretty good chance you’ve thought about your retirement quite a bit for many years, whether you’ve imagined about how you’ll spend time or worried about your 401(k). If you’re like a lot of people, you may be a little unclear about what your retirement plan will look like. Careful thinking about what the future will bring can help you prepare for the best and worst that life will throw your way once you’ve retired overseas. Fidelity has a very thoughtful “countdown” list of topics to consider starting about 5 years out from your retirement:

Retirement countdown some point, however, you’ll need to bring your retirement into focus. Ideally, that’s about five—or more—years before you hope to retire, Retirement is close enough to know what you want it to look like, and yet far enough away that there’s still time to hone your strategy to help meet those goals or alter your plans.

“Assessing your retirement—especially years before you actually retire—is not unlike going to the doctor when you suspect a problem,” says John Sweeney, executive vice president of retirement and investing strategies at Fidelity. “You may be afraid and procrastinate. But waiting can make the ultimate fix more painful. Better to act early. Take it a step at a time.”

Here are five questions to ask—and begin answering—before you start planning your retirement party.

1. What are your expectations?
It seems like a simple question. But a 2013 Fidelity surveyOpens in a new window. of 808 couples showed that 38% of pre-retiree couples don’t agree on their anticipated retirement ages, and 35% have different lifestyle expectations once they are no longer working. Where do you plan to live? What do you want to do? How will you pay for health care?

2. Will you have enough?
This question nags many preretirees. According to the Fidelity Investments Retirement Savings Assessment (RSA),3 the median baby boomer is on track to meet 81% of estimated retirement expenses, enough to cover the basics but not sufficient to cover discretionary expenses, like travel.

3. Are you invested properly?
As you round the bend toward retirement, you may not want to take on any more investment risk than necessary. But the consequences of being too conservative can be just as worrisome when you account for inflation and the possibility that you could outlive your savings. Part of the solution is an appropriate asset mix.

4. Where will your retirement cash come from?
You need to begin thinking about how you’ll convert some of your savings into income. For many people, it’s helpful to start by grouping potential sources of income into three or four categories, such as income from a part-time job, current investment income, pension income (from a defined benefit plan or Social Security), annuity income, and income from any other assets, such as rental real estate.

5. How does your home factor into your retirement?
Don’t neglect what is likely one of your largest assets: your home. If either downsizing or relocating is in your plans, you may want to start plotting the move. With home prices in many parts of the country still depressed and mortgage rates near historic lows, it may behoove you to consider getting your foot in the door of your retirement home sooner than you might have otherwise.

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The ExpatInfoDesk site has an excellent guide called the Expat’s Manual that has plentiful advice for those headed overseas – both for those near retirement age as well as younger folks.  Here’s a few thoughts to keep in mind when you’re planning that all-important next phase in life:

Retirement Finances. Things to Consider – Expat Info Desk

There are a number of key areas pertaining to retirement finances and banking that you should consider when you move abroad. It is crucial that you fully research the following areas.

  • The cost of living in your current location and how that compares with the cost of living in your home country.
  • The cost of property in comparison to what you pay in your home country.
  • The exchange rate that is in place between your home country and that of your intended destination. What will the impact of any major fluctuations be upon your ability to survive?
  • The benefits and pensions that you currently receive or are entitled to in your home country and how these may be impacted by a move abroad. Things such as retirement pension, housing benefit, carer’s allowances and incapacity benefits should all be considered.
  • The frequency with which you will want to return home and how you will fund this.


Rachael L. Sheedy of the well-known Kiplinger published a well researched article “How to manage your money if you retire abroad“. The article doesn’t go into great depth, but does outline the major touch-points of retirement planning abroad. We’ve synopsized the basic points below in the article which was republished on the website. Definitely check the main article and bookmark it for the future: manage your money, you will need to understand how the U.S. tax laws interact with taxes in your new overseas home. You also must figure out how you will handle your banking and investments, including your IRA, while you’re abroad.

One of your first steps is to establish online access to your investments, bank accounts and other financial resources in the U.S. “Simplify your financial life as much as possible before leaving and perform all of your transactions online,” says Edd Staton, 66, who retired to Cuenca, Ecuador, five years ago with his wife, Cynthia, 62.

Get in touch with expats who moved to your destination country within the past year or two. Dan Prescher, a senior editor of who lives in Cotacachi, Ecuador, suggests looking for expat-related bulletin boards and Facebook pages. These Internet resources can help you find professional tax help, for example. “There’s no equivalent of the Better Business Bureau,” he says. “Word of mouth is important, and reputation is important.”

Also, Prescher says, prepare for large costs when you first arrive. “You can live on $1,500 or $2,000 a month, but it doesn’t start when you get off the plane,” he says. You might have to put down several months’ rent as a deposit. “It’s a good idea to have $5,000 or $6,000 squirreled away,” says Prescher, who, with his wife, Suzan Haskins, wrote The International Living Guide to Retiring Overseas on a Budget.

It’s a good idea to seek expert help. American Citizens Abroad has an online directory of tax preparers (, which lists preparers based in the U.S. and in some foreign countries.

Credit history generally doesn’t travel across borders, which means you will need to build up a local credit history to conduct certain transactions, such as getting a cell phone plan. Lachowitz advises keeping at least two U.S. credit cards. The cards will keep your U.S. credit history alive, and you also can use your U.S. cards to buy products online, such as airplane tickets.

It’s best to keep most of your investment accounts in the U.S., Lachowitz says. You’ll have more investment choices, tax reporting is more efficient, and U.S. accounts aren’t subject to FATCA reporting forms. read more

When you’re finally ready to make that final push and get ready for your new life, here’s a handy resource that will help you pinch pennies where you can yet still live comfortably on the income you’ve secured for yourself. Author Suzan Haskins lives in Ecuador and has also lived abroad in Mexico, Panama and Nicaragua.

retiring_overseas_on_a_budgetThe International Living Guide to Retiring Overseas on a Budget: How to Live Well on $25, 000 a Year – Kindle edition by Suzan Haskins, Dan Prescher. Download it once and read it on your Kindle device, PC, phones or tablets. The International Living Guide to Retiring Overseas on a Budget: How to Live Well on $25,000 a Year eBook: Suzan Haskins, Dan Prescher: Kindle Store

Remember that you may feel a little bit like a stranger in a strange land in your new overseas country – so take advantage of your unique situation and play both against the other, so to speak. If you have the right mindset, your situation may allow you to capitalize on the the advantages of both your host country and your native country. If you’re looking for retirement income opportunities that “travel well” you should visit our home page and investigate the safe-money investment alternative called secondary market annuities.