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How to choose where to retire abroad: An expat’s guide

If you are thinking about where to retire abroad, there are many things to consider.

It is not a light decision. You will need to think about not only your own finances and your health, but your family’s as well. This is not to mention what kind of place will make you all comfortable.

If you are still not sure where to go and have no idea where to start looking for an affordable expat destination, here are some tips that can help guide your search.

If you want to invest as an expat or high-net-worth individual, which is what I specialize in, you can email me (advice@adamfayed.com) or use WhatsApp (+44-7393-450-837).

There are a lot of factors to consider when choosing where to retire abroad, such as cost of living, healthcare, and safety.
There are a lot of factors to consider when choosing where to retire abroad, such as cost of living, healthcare, and safety. | Photo: Pexels

Consult a professional who can help you plan your finances while living abroad.

Before you can decide where to retire abroad, it is important to consult a professional who can help you plan your finances while living there.

A financial advisor or estate planner can help find the place where you can live comfortably with equivalent or even better quality of living than in your home country.

You can work with a financial planner to develop a strategy centered on your own goals and objectives.

They can also direct clients to other experts if they need their opinion in a certain area. If you need tax professionals, asset managers, or retirement planners, a skilled financial planner has the resources to put you in touch with them. The finest ones can even offer you these services themselves.

They will also be able to assist in working out pensions or insurance concerns, with the best consultants even able to recommend the best schools for your children.

Figure out your tax situation before leaving the country.

If you are retiring abroad, among the very first things you should do is figure out how much tax you will pay in your new country.

In the United States, for instance, the process is relatively straightforward.

If you have a pension and don’t qualify for an exemption from paying taxes on it (which only applies if the majority of your income comes from Social Security), then all of your pension income will be taxed at whatever rate applies for ordinary income in your state–and that rate can vary widely between states.

Your pension and any tax-deferred assets, such as standard IRAs, 401(k)s, 403(b)s and similar retirement plans, as well as tax-deferred annuities, must be taxed in the year you withdraw the funds. The amount you have left over after taxes is reduced.

As you receive funds from pension annuities and recurring pension payments, you will be required to pay federal income tax at your standard rate.

But, if you choose to receive your pension as a straight lump sum payment instead, you must pay all taxes owed when you complete your tax return for the year in which you get the money.

In either scenario, your employer will deduct taxes from the payments when they are issued, resulting in at least a portion of what is owed being paid in advance. Taxes will not be due on a lump sum transfer made directly to an IRA until you begin taking withdrawals.

If this sounds complicated, don’t worry. There are plenty of tools online that can help calculate what percentage should go where.

This is also another scenario in which it is highly recommended that you consult a professional. Tax attorneys have a wealth of experience dealing with paying taxes, and they can help you with your tax obligations when you choose where to retire abroad.

If you’re from the US considering where to retire abroad, tax professionals can also help you navigate around the Foreign Account Tax Compliance Act or FATCA.

Enacted as part of the HIRE Act, FATCA requires U.S. citizens to disclose their international financial accounts and foreign assets, depending on their value.

Certain other non-financial foreign entities and foreign financial institutions are also generally required to report on the foreign assets held by their American account holders in order to avoid having withholding taxes on withdrawable funds imposed on them.

Tax professionals can also help offer you choices where to retire abroad with better tax treaties or even tax havens—places like Hong Kong or Singapore offer great deals on retirement visas specifically designed for retirees.

Consider your health needs before moving abroad.

When you are considering where to retire abroad, it is important that you think about your health needs.

Healthcare is expensive in most countries and most people will be required to pay out of pocket for their healthcare costs.

If you have a pre-existing condition, make sure it is covered by your health insurance.

If not, consider getting supplemental coverage that would cover those types of things or even see if there are alternatives like telemedicine or telehealth services available in the country where you plan on moving.

If there are medications that must be taken daily such as blood pressure medication, make sure they are available at pharmacies in the country where you plan on living so they can be filled easily when needed without having to order them from home.

When choosing where to retire abroad, you may also want to consider countries with free, or at least accessible, public healthcare.

According to research by Statista, Japan leads the world health index with a score of 86.6 in 2021, followed by Singapore and South Korea.

The health index evaluates the degree to which people are healthy and have access to the services required to maintain good health, including mortality rates, disease and risk factors, health outcomes, and health systems.

The statistic ranks all nations’ health and healthcare systems as of 2021 according to this score.

Medical care will always be expensive, no matter where you work or reside. Although it does not necessarily go up, the chance of being hospitalized overseas does not go down to the point where it can be discounted either.

Overseas, you’ll encounter a lot of unforeseen events that could significantly increase your spending. For your peace of mind, it is therefore preferable to purchase international health insurance from a reputable insurer.

The best international health insurance for expats is the one that offers the broadest coverage and is recognized by the best hospitals in practically every nation.

But, the price of this can be out of your price range, so you need to look into your options to find the greatest bargain.

Check with your financial advisor for recommendations on good international health insurance policies with the coverage that you and your family need.

Properly research your options before making a decision about where to retire abroad

It is important to research the area you are considering for retirement. You want to make sure that the culture, politics, economy and healthcare system are all compatible with your own.

If possible, try visiting the country before deciding on where to move.

If you’re planning on living in an area where English isn’t spoken widely or at all, then it’s best to learn some basic phrases in that country’s official language so that locals can understand what you need from them when you need help with something.

You should also research local real estate markets by looking at recent sales prices and rental rates for homes similar in size and amenities as yours back home.

This will give you an idea of what kind of property values exist within certain neighborhoods versus others within similar cities, towns, or villages.

Consider cost of living when choosing where to retire abroad.

Another important step toward choosing where to retire abroad is to consider your budget.

How much money will you have available for living expenses, travel and entertainment, medical care and other necessities?

You will also want to take into account the cost of living in different countries.

There are dozens of wonderful places in the world where a couple, for instance, may live well for as little as $20,000 a year to as much as they choose to spend.

Choosing a place to retire is about more than just the weather. You also need to consider the costs of living in that country, as well as how you can afford those costs.

Which extreme do your financial circumstances fall on? Calculate your retirement budget first.

Based on your employment earnings, you can use services like the Social Security Administration’s Retirement Estimator calculates an estimate of your future Social Security payments.

You can have at least a general notion of how much money you have available to spend each month based on that number plus your savings (less your debt).

Another factor when considering affordability is purchasing real estate abroad.

This depends largely on whether you plan on renting or leasing vs owning your home outright since buying property can sometimes cost more than renting depending upon location.

Choose a place where you can afford to live comfortably.

While you are working, your expenses are likely limited by your salary and any loans or debts you have incurred.

When it comes time for retirement, though, these factors disappear–but new ones emerge: taxes including capital gains tax on investments, healthcare costs if applicable, and housing prices can all vary greatly depending on where in the world you decide to settle down.

With that taken care of, choosing where to retire abroad depends on factors like what environment you would like to live in.

Do you prefer countries with plenty of beaches, heat and sunlight? Do you prefer high altitude places with clear, refreshing mountain air?

Do you like how the seasons change or would you rather it were spring all year round?

All of those options are accessible for a variety of monthly income levels. Once you have established your spending limit, focus only on locations with the desired weather.

It is highly recommended to be familiar with your target destination before you decide where to reture abroad. At the very least, making a trip to your preferred country to ensure that you want to live there should be considered.

One thing to keep in mind when you do this is to make sure to experience the region’s worst seasons of the year so you can prepare for it in case you decide to relocate there. That way, it can only get better later on!

Consider the weather conditions in different places of interest.

If you are choosing where to retire abroad, it is important to consider the weather conditions in different places of interest. The climate can have a huge impact on your lifestyle and overall happiness.

The climate and weather patterns of a particular country are important to consider when choosing where to retire abroad.

For example, if you live in a place with high humidity or precipitation rates in the rainy season, then there may be times when it feels like it never stops raining.

This can make some people feel depressed because they do not have any sunlight or fresh air coming into their homes. This could also mean long stretches of time without opportunities for outdoor activities like hiking or cycling.

On the other hand, if you live somewhere where there are long stretches without rain or snowfall during winter months like Dubai, then this could mean higher temperatures and a dryer climate, which in turn could be bad for people with certain health conditions like asthma.

While you may think that the tropical climate of an island paradise sounds like the perfect place for your golden years, it is important to remember that heat can be dangerous for older people who may not be accustomed to high temperatures.

In addition to temperature and precipitation patterns being important considerations when choosing where to retire abroad, there are also factors like how prone a location is to natural disasters like earthquakes or tornadoes.

Find a place that offers access to healthcare, good schools, and other amenities.

We have already mentioned healthcare costs, but you should also consider access to other factors like good schools for your children or an international community of expats.

If you have kids, this might mean finding somewhere with good schools and even universities nearby.

And if you are married or partnered with someone who still wants to work, it can be helpful if there are opportunities for them as well.

Once you have established your criteria for choosing where to retire abroad, you can check out some of our lists about the world’s most livable cities, the best cities for education, or the smartest cities in the world.

Making sure your family and loved ones are taken care of is an important aspect of retirement
Making sure your family and loved ones are taken care of is an important aspect of retirement. | Photo: Pexels

Avoid unstable environments.

Another thing to consider when choosing where to retire abroad is the stability of the environment. As you get older, it is important that your health and safety are protected by stable conditions.

Obviously, you should avoid unstable environments like countries where there is war or unrest, high crime rates, poor health care systems and infrastructure including roads, or other factors that could potentially put your life at risk.

The Institute for Economics & Peace publishes the Global Peace Index, a survey that ranks the peacefulness of various countries and regions. You can check this to see how your preferred locations ranks.

The GPI rates the peacefulness of 163 independent states and territories, which together account for 99.7% of the world’s population.

The safety of a nation is influenced by a variety of things. The extremely low crime rate, notably violent crime, the excellent healthcare system, and the accessibility of emergency services are a few of the most significant.

The Global Peace Index also pays attention to a wide range of other aspects, such as sustainable development, environmental quality, food security, equal pay, and personal safety.

The absence of a terrorist strike, the amount of money the nation spends on its military, and ties with its neighbors are all important factors. The European Union’s Nordic nations consistently rank at the top of the ranking.

As of 2022, the top countries on the index are Iceland, New Zealand, Ireland, Denmark, and Austria.

Make sure the place fits with your interests and hobbies.

One of the most important things to consider when choosing where to retire is whether or not you will be able to find things to do there.

In 2019, the National Citizens Service, a British organization, commissioned researchers who found that the most frequent drawbacks of retirement were not making enough money, boredom, and a lack of social engagement.

One in four respondents claimed that after retiring, every day has felt the same. Yet while the majority of retirees experienced boredom after a year, 1 in 10 respondents reported having trouble finding anything to do on a regular basis after only five months.

Only one third of respondents stated they are seriously considering working part-time, despite the fact that about two-thirds of them felt that doing so would improve their feeling of purpose.

In addition to meeting new people, 40% of retirees indicate that their main motivation for working part-time again is to just get out of the house.

It was also noted that most people would choose to explore a new activity over going back to their previous job.

If you love hiking, it is worth checking out how many trails are nearby and if there are any opportunities for mountain climbing when choosing where to retire abroad.

If cooking is one of your passions and you want a country with fresh ingredients and an unfamiliar cuisine, look at what kind of markets exist in those areas.

If you enjoy reading books and learning about different cultures, ensure that public libraries are available nearby.

Whether you are looking for a place where you can walk to the beach or enjoy the mountains, it’s important that you have plenty of things to do.

If possible, find out if there are any clubs or groups in the area that interest you—and if not, start one yourself!

You can also meet new friends who share similar interests and hobbies as well as make new connections around town through classes or volunteer opportunities offered by local organizations such as churches or local government groups.

Consider all the factors when buying real estate abroad.

There are many factors to consider when buying real estate abroad. When it comes down to it, though, you need to be patient and flexible.

You also need to do your research before making any decisions about what country or region you want to live in. This will help ensure that your investment is worthwhile.

You should also be financially prepared for the purchase of an overseas property–and that means having enough money saved up so that if anything goes wrong during the process, then there will not be any problems with covering unexpected costs like legal fees or taxes on foreign land ownership.

Remember that the space you buy might not be what you pictured in your head.

It is important to remember that the space you buy might not be what you pictured in your head. You might have to compromise on certain things, or accept that the perfect place does not exist.

Remember: the more flexible you are, the more likely it is that you will be happy with your choice!

Conclusion

We hope that this article has given you some insight into how to choose where to retire abroad. There are so many factors to consider, but with the right planning and research it’s possible to find a place that will feel like home.

Remember that while your new home may not be exactly what was pictured in your head, it will still be an exciting adventure full of new experiences!

Pained by financial indecision? Want to invest with Adam?

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Adam is an internationally recognised author on financial matters, with over 739.2 million answer views on Quora.com, a widely sold book on Amazon, and a contributor on Forbes.

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How to choose where to retire abroad: An expat’s guide
How to choose where to retire abroad: An expat’s guide

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