When you’re scouring the internet for helpful information on overseas retirement options, it’s very easy to find “top 10” of great places to live, or list of places to go and things to see. It’s a bit harder to find some sound financial advice, so we’ve begun to collect a few resources on this page for your perusal.
Retiring Abroad? Financial Facts You Need to Know
In recent years, many U.S. retirees have headed abroad. In 2013, approximately 400,000 Americans received their Social Security checks overseas—an 11% increase from 2008. The exotic locales and a luxe standard of living for less are enticing. But as idyllic as the dream may be, managing your money in another country can be complex, notes Rande Spiegelman, vice president of financial planning at the Schwab Center for Financial Research.
Investigate your new address – Before buying real estate, consider renting for a year to get oriented. Be sure to research forms of ownership and property titling for the country you’re interested in.
You still have to file from foreign soil – Even if you’re no longer earning or living in the U.S., as a U.S. citizen you’re still required to file an annual tax return.
Avoid being taxed twice – You’ll likely have to file a tax return in your country of residence as well. How can you avoid being taxed twice?
Manage your Medicare benefits – Retirees living abroad are not eligible for Medicare. But what if you visit the U.S. or decide to return permanently, as many retired expats eventually do?
Get health care coverage overseas – Health care options are often cheaper abroad—indeed, so affordable that some expats opt to simply pay out of pocket. Still, you might want to purchase an international health plan through an American insurer or a private company with a large global network.
Set up your banking with care – The Foreign Account Tax Compliance Act of 2010 requires foreign banks to report all accounts held by U.S. citizens with balances of $10,000 or more to the federal government.
Prepare to adjust your estate plan – This may come as a surprise, but your estate plan and other documents (wills, powers of attorney, health care directives) may not be valid abroad.
How will your income translate into local currency? – Most of your retirement income will likely be in dollars that are then converted to local currency, so you’ll be more vulnerable to fluctuations in currency markets.
The Expat.HSBC website has a wealth of information and online tools for your use and general education on finances overseas. Everything from online financial calcuators, financial advice and information and financial planning resources are available at this great site:
Retirement planning for Expats – Retiring abroad with HSBC Expat: HSBC Expat
Most expats hope to retire early. To make sure you can afford to stop working when you want, here’s some useful information about retirement planning – including the main points to consider from an expat’s perspective.
If you’ve stopped paying into your personal pension back home, do you need to find an alternative solution? And how can you protect your wealth if you retire abroad?
Exchange rates, tax regimes and the country you retire to can all affect your income in retirement – what can you do to reduce the impact?
Whether you want to travel the world or move back home, find out if your savings and investments will give you enough income to enjoy life when you retire.
In retirement you’ll not only need to think about your personal income but how your retirement could affect your spouse and children. How could family life influence your retirement plans? Full text here expat.hsbc.com
As miraculous as the internet can often seem when searching for relevant, quality content on any topic, there are many times when the web just isn’t enough to satisfy your craving for quality. At times like these a good strategy is to go “old school” and pick up a good book. Here are a couple of good choices: Getting Out, by Mark Ehrman, isn’t specifically oriented toward retirement aged folks, but it does offer a comprehensive overview of just about any country you’re likely to move to. Secondly, Freedom Without Borders by Hoyt L. Barber, has more financial tilt to its perspective which makes it a great read for those facing a future abroad in their retirement years:
Getting Out: Your Guide to Leaving America
One of the most popular titles in Process’ Self-Reliance series, Getting Out is a smartly designed and easy-to-navigate compendium about your best options for a new homeland, and how to navigate a myriad of hurdles before and after you get there.
Here are the rules, resources, and experiences of dozens of expat Americans on every continent, including author Mark Ehrman, who moved from Los Angeles to Berlin after publishing Getting Out. The updated and expanded edition contains new information on taxes, healthcare, food, drink, drugs, security, and suggestions about how to start a business or make a living in foreign lands. Check it out at Amazon here.
Freedom Without Borders: How to Invest, Expatriate, and Retire Overseas for Personal and Financial Success
The idea of moving to a new country has always been of interest to adventurous beings who relish the notion of basking in a beautiful place where one can live like a king for dimes on the dollar. The dreamis achievable, but only if you first safely move your assets. That is what Freedom Without Borders: How to Invest, Expatriate, and Retire Overseas for Personal and Financial Success is all about.
Written for anyone seriously concerned about strategies for protecting assets, as well as lifestyle, this comprehensive guide covers everything one needs to know to do that successfully outside of the United States. The book focuses on personal finance considerations for those contemplating moving or investing abroad, rather than on culture aspects of such a decision. It presents specific alternatives for finding—and shifting assets to—an ideal haven, showing readers how to protect personal wealth even as they discover a freer, more peaceful way to live, invest, and/or retire. Check it out at Amazon here.
All the information in the world won’t do you any good if you’re not willing to put the advice into action, so we offer up a positive story of life overseas here from and article at Time’s money section. Kate Holmes reports on the Bowman’s, who made a successful transition overseas, and mixes in a healthy does of practical finance advice to boot:
Early Retirement Overseas: How One Couple Made it Happen
So they took drastic steps to create a whole new life they love.
“We have got to come up with a better word for retirement; there is such a stigma to it,” she says.
I myself have made a few bold changes in my life, and people often comment that I managed it because I’m unencumbered.
They sold their business, rented out their house, pulled the kids out of school, and moved with the family dog to Spain!
They had to focus on the positive to convince their young children that the move away from friends, schools, and the only world they ever knew was good.
They are going to be resilient and learn what money is about.”
The Bowmans had built up a nest egg mostly comprising the property they purchased over the years. read more time.com
A worthy goal to aim for in your overseas retirement planning should be to find a state of investment independence that you achieve sooner rather than later. Its all too easy to get sidetracked and lose site of the long terms goals that you’ve set for yourself. Remember, you’re about to step off the beaten path and make some pretty exciting and courageous life adjustments, so keep your eye on the prize, and best of luck to you in the future!