Retiring outside the U.S. is an increasingly popular choice. Today’s retirees are more active than those in the past. They are looking for new adventures in their twilight years and a retirement overseas may be just the thing they are looking for.
Whether you are well-traveled or just beginning to explore areas farther afield, retirement in someplace other than your home country can present both opportunities and some challenges. From choosing the place to deciding how to fund your retirement there, careful choices now mean a better time later. We’ve compiled some of the basics for people who are considering retiring abroad. These topics and resources can form the first step of your research so that you can get closer to the right retirement destination for you.
Funding Your Overseas Retirement
Most Americans qualify for and receive Social Security during their retirement. The average couple, assuming their earnings were similar through their working years, receives roughly $2,600 per month. This amount, especially if augmented with savings, investments and a pension, is more than adequate in a wide range of destinations. Kiplinger says that the Social Security Administration sent retirement benefits to 346,000 Americans living abroad in 2011, the last year for which stats are available.
In some cases, working during your retirement can help sustain you and stretch your pension or Social Security income. Japan offers a number of working and entrepreneur visas to people who wish to work while they are in the country.
No matter the source of your income when you are living abroad, maximizing your money is always wise. Choosing the right company to handle currency conversions and transfers is a part of that. Handling these transactions through WorldFirst allows you to ensure that you are getting a great exchange rate. Most people maintain bank accounts in their home countries, then transfer money once a month. This can be valuable, as it allows you to choose the right time to make a transfer for a competitive exchange rate while also avoiding costly fees associated with depositing foreign checks in your new home country.
If you intend to work or run a business during retirement, you’ll have to investigate the laws that govern the country where you intend to live. In many countries, potential employers cannot hire expats unless they have shown that there is not a citizen available who can do the job. Rules are often looser if you plan to run your own business. If you plan to continue to work remotely for a company in your home country, often there are no restrictions at all.
Most countries have financial requirements for residency.
You can learn more about the laws governing work and immigration on your destination country’s website. This information will often be available on pages that deal with visas and residency.
How Do You Learn Which Places Are Safe?
When you tell friends and relatives that you are planning to retire abroad, the first question they often ask is: Is it safe? If your only exposure to foreign places is the news, the world outside your home country can indeed seem like a scary place.
However, most of the places where aspiring expats look are as safe or safer than comparable places in your home country. Rates of most violent crimes are lower in both the UK and Japan than they are in the United States in most comparable parts of the country. In countries that have higher crime rates, dangers are often limited to specific cities or regions.
To put your loved ones’ and your own mind at ease, take some time to research the safety of the area you are considering. The Global Peace Index is compiled annually to assess the relative peacefulness of countries all over the world. It combines indicators that range from the homicide rate to how rare or pervasive bribery of government officials is to how safe residents feel walking alone in their area.
The U.S. State Department also provides country specific information to inform the public about conditions that affect the safety of both tourists and Americans living abroad. The detailed information that they provide can help you understand everything from health and medical considerations to how local law enforcement handles drug penalties. Their Retirement Abroad advisory gives additional information about natural disasters, road conditions and more.
Learning About Healthcare in Your Destination Country
As we get older, many of us find that we need more medical care than we did as younger adults. Because of this, access to quality healthcare is an important consideration for many retirees. The good news is that many of the countries and regions that are popular with expats have medical care that is as good as what you can expect in the United States and often less costly.
Research the requirements for access to health care in your new host country. Plans will vary greatly. In Malta, for instance, you will need to pay into the national insurance system in order to get health coverage. In Spain, you are covered if you are from a European Union country, but will need additional coverage if you are from a country outside the EU. People who live in Japan can join either the National Health Insurance or Employees’ Health Insurance programs to get access to Japan’s excellent medical care.
Medicare, for the most part, does not cover the medical costs of Americans living abroad. In some cases, you may be entitled to care under your new home country’s residency laws. In others, you may be required to purchase insurance in order to get coverage for medical care. The U.S. State Department has information about the healthcare systems in countries throughout the world. You can also research on expat-oriented message boards to learn more about others’ experiences with medical care.
Other Budgeting Concerns
While some costs will be lower, others may be far higher in other parts of the world. Most countries, including the UK, have more expensive gas prices than in the U.S. In many urban areas, you will also find that a parking spot for your car is an excessive expense. However, depending on the quality and cost of public transportation, you may find that you do not lose any convenience by giving up your car.
Internet may be metered in ways that you are not accustomed to. Some areas offer monthly plans that are similar to what you find in the states. Others may charge by the gigabyte. Phone plans are different than what you find in the states, as well. In some areas, mobile phones are paid for by the minute, allowing you to choose from multiple carriers at any given time so that you get the best price.
While household help is costly in the U.S., it is far less expensive in parts of the world that include Spain, Portugal, and parts of Eastern Europe. You may find that you have room in your budget for a housekeeper, a gardener, a cook or other help that would be a luxury back home.
Giving a Country a Test Drive
Experts recommend a trial run in your chosen country before making your move. Try renting a property before you buy so that you can gauge how well not just a country but a specific region there works for you. WorldFirst makes it easy for you to transfer funds on a regular basis to cover expenses both during your initial visit and your full-time residency.
Temporary or part-time visits allow you to get comfortable and see what works well for you. For instance, while most Americans consider air conditioning an essential, it is not common in most parts of the world. You may find, after spending time in an apartment where it’s not a feature, that you are just as comfortable without it, allowing you to save on that expense. By taking the time to try out a lifestyle different from what you enjoy back home, you can make the best decisions for your happiness and your wallet.
Best Places to Retire Overseas
The choice of where to retire is, of course, highly personal. Preferences when it comes to rural versus city life, the type of climate you prefer, your flexibility when it comes to acquiring new languages and more should all play a part in your decisions. While U.S. retirees have often looked most at central and South America, more are looking at far-flung parts of Asia and even spots in Western Europe that were previously considered out of reach. There are a number of countries that attract large numbers of expats. We’ve assembled a few of the most popular below:
The UK is an attractive retirement destination for Americans because of our shared common language. However, many people find that the culture there is, in many ways, dramatically different from the U.S. Americans can visit the UK for up to six months as a tourist with no visa. After that, you can get visas for extended visits if you have established business connections in the country or if you have family links to the UK or Canada. While the “retired persons of independent means” visa program has been discontinued, you can still renew an existing visa under this program.
The UK also offers a range of environments and price points. London’s city center offers excitement, but average rent on a one-bedroom apartment is around $2,100. Areas like Edinburgh are less expensive.
This country offers island life at a cost that is affordable for most. International Living reports that expats in Malta can live comfortably for as little as $2,600 a month. A one-bedroom apartment close to the water averages between $750 and $800. With 3,000 sunny days a year, the climate in Malta is warm and agreeable.
Japan is made up of nearly 7,000 islands between the Pacific and the Sea of Japan. People from all over choose to retire here because of the land’s natural beauty, the ancient and stunning architecture and the traditional cuisine.
While Japan lacks a formal retirement visa plan, there are 24 different types of long-term visas available that can allow people to spend long periods of time here. A permanent resident visa can be acquired after three one-year visits. You can also visit for 90 consecutive days without a visa.
Spain has long been a popular retirement destination with people from the UK; recent financial conditions have made the area more affordable than ever for people from the U.S. and Canada, as well.
According to AARP, a couple can live comfortably on $25,000 a year in Spain. The national average cost for a rental property is $675 a month.
As many as 3,000 American expats make Portugal their home, with thousands more expats from the UK and other European countries. Rents are inexpensive, with many nice apartments available for under $650 per month. It is also very affordable to buy here, with real estate prices typically under $150,000 for a two-bedroom home in Lagos.
By examining the many options available for retirees, you can find parts of the world that offer excellent amenities, opportunities for local travel and high-quality healthcare at prices that are far lower than you will find in the U.S. Take the time to research a range of places to find the one that fits your lifestyle, hobbies, and the things that you want most from your golden years.