Do you dream of retiring abroad? Perhaps near the beach in a warm Caribbean or Central American country? Or in an entirely different culture, in Europe or Asia?
For many workers, retirement is a time to relax and enjoy the simple life. For others, it’s a time to launch a whole new adventure. If you’re in the latter group, an overseas retirement could be an ideal strategy.
Before you pack up and move, though, it’s important to take time and explore some difficult questions.
Retiring is always complicated, but even more so when you retire abroad. There are a number of complexities, ranging from the financial to the personal.
Ask yourself the questions below. If you don’t have an answer or a strategy for these questions, an overseas retirement may not be for you, at least right now. If you have good answers, you may be ready for an adventure abroad.
How will you handle the separation from family and friends?
This is an important question that you’ll want to consider before you commit to your move abroad. You may not have many friends or family in your new destination. Obviously, you’ll see them much less frequently, maybe only once or twice a year. How will you handle that separation?
Think about how you can connect with them. For example, you could do video chats online. Also, look into travel costs. Is it reasonable that they could visit you regularly? If you think the separation may cause emotional instability for you, an international retirement may not be the right fit.
What are the additional costs of living in your desired country?
Often, retirees focus on the cost savings they’ll realize by moving overseas. However, there are some additional costs you could face. For instance, as an American citizen you still have to pay taxes, but you may also have tax obligations in your new country. How will those taxes impact your budget?
Also, you may have to convert your income into the currency of your new country. What are exchange rates like? Will you lose purchasing power in the transaction? Also, how much money will you spend each year traveling home to see loved ones? Factor all of these costs into your decision.
How will you pay for health care?
Health care is often a primary reason for retiring abroad. Many countries have less expensive health care systems than the United States, and some even have government-provided health care that is available for new residents.
However, these rules can be complex. You may find that the government-provided care doesn’t meet your standards. Or the coverage may be less expensive, but not if you have to pay for it all out of pocket.
Do a thorough investigation of the country’s healthcare system and your options. Remember, Medicare generally doesn’t cover care provided overseas. You may need to consider a private health insurance policy to cover medical care in your new country.
Still planning for your retirement? Let’s talk about it. Contact us at J. Harris Financial today to schedule your consultation. We’re happy to review your needs, goals and concerns, and help you develop a plan for retirement income. Let’s connect soon.
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