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16 things to consider when planning your retirement abroad: An expat’s guide

If you are planning retirement abroad, it is important to prepare and plan ahead.

Some things may seem obvious, like learning the currency and finding out how to file taxes in your new country—but there are also more exciting things that come with planning for retirement abroad.

In this article, we will discuss how to plan your retirement abroad, alongside some things you might want to do to make your move a pleasant one.

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

What should you consider before you plan your retirement abroad?

The decision to retire abroad usually comes with a lot of questions.

You may be wondering what kind of lifestyle you can expect in your new country, or if the cost of living will be similar to what it is at home.

Perhaps you are concerned about finding the right kind of place for your family, working remotely or keeping up with friends back home.

Or perhaps you have already spent a significant amount of time in your desired retirement location and are simply tying up loose ends before you make the final move.

Whatever the case, there are still many things to consider before making this important life decision, but here are some questions that might help guide your way:

There are many things to consider when planning a retirement abroad
There are many things to consider when planning a retirement abroad. | Photo: Pexels

What is the climate like?

The climate you choose to retire in will be a factor in your decision. Temperature, rainfall, and humidity can all affect the quality of life for retirees.

For example: if you live in an area with hot summers and humid winters (such as Florida), then you may want to consider living somewhere that has cooler temperatures during those months — such as parts of Canada or New Zealand.

You should also consider the amount of rainfall each area gets. For example, if you live in an area that has a lot of snowfall during the winter months, then you may want to look for a place that experiences less snowfall or rain.

Keep in mind that the change in weather can have a big impact on your body, especially if you are at an advanced age.

There are many factors that affect our health, but one of the most important is climate. Living in a different climate than what we are used to can be challenging for our bodies, which typically adapts to the environment over time.

When you move to another country with a very different climate, it’s important to understand how your body will react and what kind of health issues might arise in the future.

For example, if you move to a country with a very warm climate, you may get sunburnt more easily than before because your skin is not used to the strong sunlight. If you move to a country with extremely cold weather, you may get sick because your body is not used to low temperatures.

A sudden change in temperature can cause colds and flu to flare up. And if you’re not used to higher altitudes (like those who move from sea level up into mountainous areas), you might experience headaches, fatigue and shortness of breath when you first settle at your destination.

How are healthcare options?

If you have chronic conditions, it is important to consider how easy it will be to get around if you need to see a doctor.

In some countries, public transportation is not as reliable and/or accessible as it is in other parts of the world. Many expats choose not to own a car because they do not want all the responsibilities that come with owning one–the cost of maintenance, insurance and taxes are just some of those responsibilities.

The availability of public healthcare is also something worth thinking about when choosing where you want your retirement abroad. Will you be able to avail of the public healthcare system should you need it? Or do you need a private policy?

Another thing worth considering when you plan your retirement abroad is how much money will be spent on life and health insurance while abroad.

This might not be much of a big deal for expats who are still decades away from retirement and are still planning for the long-term, but if you are about to retire soon then insurance premiums will be very costly, especially if you are getting a plan that has international coverage.

How safe is it in your new country?

It is also important to be aware of the risks associated with your new country.

Are there any violent conflicts or political instability? Does it have a history of violence, and how do people deal with conflict in general? Is there a high crime rate, or do people generally feel safe walking around at night in public places?

The Bureau of Consular Affairs at the United States Department of State is a reliable source for up-to-date information on the security and stability of countries around the world.

Occasionally, the United States government will issue travel advisories or ban its citizens from entering or remaining in a certain foreign country. The data is refreshed frequently or as required.

There are some countries that may refuse you entry if you are a foreign national. Always keep in mind that you are a guest in a foreign country and must abide by its laws.

There is also the Global Peace Index by the Institute for Economics and Peace (IEP). This index is the most widely used indicator of worldwide stability, providing in-depth, data-driven analysis of peace trends, the economic value of peace, and strategies for building peaceful societies.

The Global Peace Index assesses the state of peace in the world in terms of the three major domains—namely safety and security; extent of domestic and international conflict; and militarization.

The index includes data from 23 qualitative and quantitative indicators culled from authoritative sources, covering 99.7 percent of the world’s population.

This information can help you assess whether your new country is suitable for retirement.

What is the cost of living like?

The cost of living varies from country to country. In general, the more developed a nation is, the higher its cost of living will be.

This means that if you are retiring abroad and looking for an affordable place to live, it’s best to choose a developing country rather than a developed one—or at least one where you don’t plan on living in an urban center.

You might even be surprised, as some developing countries can offer excellent quality of life for a fraction of the price of what it would cost in developed nations.

For example: In Thailand or Mexico City (two places with high-quality healthcare), it’s easy enough to live comfortably on $1,000 per month; but if you’re moving somewhere like London or New York City (with excellent access to healthcare), then $1,000 won’t go far at all!

Are there opportunities for travel and adventure?

When thinking about the best places to retire abroad, it is important to consider whether there are opportunities for travel and adventure.

Retiring is often seen as an opportunity to do things you never had time for before, but it can also be an adjustment period where you may feel lonely or bored.

Boredom and loneliness are common complaints from retirees who have no hobbies or interests outside of work—especially for expats. Retirees can lose contact with friends and family very easily if they do not make an effort to stay connected after retirement when they are in another country.

This is why retirees should try to find clubs, volunteer organizations, hobbies, and new activities to stave off boredom by keeping busy with people who share common interests and goals.

Are there nearby national parks? Are there cultural festivals that you can attend? If you are looking for more excitement than being at home offers, it may be worth considering a country where these types of activities are readily available.

Does the quality of life meet your expectations?

Before you make the big decision to move abroad, it is important to think about what you want from your new country. Do you want to live somewhere tropical or somewhere more temperate? Do you want easy access to nature and outdoor activities, or do cities appeal more to your lifestyle?

How you measure quality of life will be different for you as these standards are different for everyone. What is important when considering where to retire depends on many factors: How long do I plan on staying in this country? Will I be able to learn some local languages?

How much time will I spend traveling around my new home country and visiting other countries nearby? How much money do I have available for travel and leisure activities while living abroad— and will these costs increase over time as inflation increases or decrease due to exchange rates shifting favorably against me?

The quality of life in your new country will directly affect your standard of living. A good quality of life means that you are happy and content with the environment you live in. If you’re moving abroad for work, the quality of life plays a big part in whether or not you’ll be able to adjust to your new location.

For example, if you are moving from a large city to a small town, it might be hard at first to adjust to the slower pace of life.

Vice versa, if you are moving from a small town to a big city like London, you might find it distressing being surrounded by lots of people and all the noise that a city typically produces.

Quality of life isn’t just about how nice your home is or how beautiful the countryside is – it’s about how safe and comfortable you feel where you live and how well integrated into society you are.

Standard of living is also worth considering. This refers to the level of wealth, comfort, material goods, and necessities available to an individual or group in a particular place. It can also be used to refer to the amount of money people earn and spend on essentials such as food and housing.

Living in a country is a totally different experience than visiting it. Stay in the areas and neighborhoods you are thinking about moving to so you can get a feel for what it’s like to live there—ideally years before you retire there.

Make sure to go in different times of year as well. In fact, you should try to pay your future home a visit at least once during the least pleasant weather season, such as the dry winds of the desert, the heavy rains of the monsoon, or the long, dark days of winter.

Start the transition by renting a place to make sure the area fits in with how you picture your retirement years. If that works out, you can start looking for a place to live.

These questions should help give an idea of what kind of lifestyle might be right for someone who is planning on retiring abroad.

How you spend your time is also equally important when planning a retirement abroad
How you spend your time is also equally important when planning a retirement abroad. | Photo: Pexels

Can you afford it?

Before you start packing your bags, one of the most important thing to ask yourself is: can I afford this?

This is an important question because even if you have a lot of money saved up when you plan your retirement abroad, it is still wise to make sure that your financial situation will allow for this lifestyle change.

If not, then perhaps it would be better to stay put at home or move somewhere else where the cost of living is more affordable.

To figure out whether or not moving abroad will work for your budget and lifestyle needs, take some time with either a cost-of-living calculator or consult a financial advisor who is well-versed with expat matters.

Retirement abroad is an exciting idea, but you should prepare and plan ahead.

What else should you consider when you plan your retirement abroad?

You should do research to ensure that you are making the right choice for yourself, your family and your finances. You should make a list of things to do before you retire abroad so that you can prepare yourself mentally as well as physically for this big change in lifestyle.

If something goes wrong while living abroad, having a contingency plan will help keep everyone calm during difficult times.

Aside from practicalities, it is also important to decide what kind of lifestyle you want before moving overseas.

Do you want to be close to family? Or do you prefer living in a big city with lots of amenities and entertainment options? Do you like the idea of living on an ocean or in the mountains? What type of climate are most comfortable for your health and happiness?

These factors will have an impact on where in the world is right for you.

Consider your health and any medical conditions that may affect your retirement abroad.

You should also consider your health and any medical conditions that may affect your retirement abroad. If you have a medical condition that requires ongoing treatment, or if you take regular medication, then it is important to check whether this will be taken care of in your new country.

Will there be adequate access to healthcare? Do they have the same drugs as those available back home? If so, how much will they cost? Will they be covered by public or private health insurance?

If not–and especially if the answers are no on both accounts–consider how much money will need to be set aside each year for this purpose alone.

You will need to ensure that you have adequate health insurance. Your current provider may not offer coverage in your new country, so it is important to check with them first before making any plans.

It might also be worth looking into other policies offered by the same company or one of their competitors.

Understand the culture of your destination country.

When you’re planning to move abroad and retire, it’s important to understand the culture of your destination country.

You can learn about the people, language, and customs by reading about them on sites like Wikipedia. You can also search for videos on YouTube that show what life is like in that country—for example, if you’re thinking of moving to France or Italy, watch some videos that show how people live there.

You should also find out more about food customs: are there any special dishes? What kinds of ingredients do they use? Do they eat dairy products or not?

This will help you set expectations as to what kind of life you might experience in your new country.

Learn the currency.

If you are going to live in a country that uses a different currency, it is vital that you learn how to convert your money as quickly and easily as possible.

Most international banks will provide service for a fee, but there are also many services out there that can provide for your financial needs while abroad as well.

Learn how to spot extraordinarily high fees when buying or exchanging currency. Some services often charge customers fees when they purchase or exchange foreign currency because they see this as an opportunity to make money off their customers’ ignorance.

While those fees may seem small at first glance, they add up quickly over time—especially if you plan to live in a country for the long-term.

Find out how to file taxes in your new country.

Of course, you should understand the tax filing requirements and deadlines in your new country, while keeping tabs on your obligations from your home country. You may need to file an income tax return back home, even if you are already paying taxes where you are residing.

It is highly recommended to consult a tax attorney about filing your taxes in another country, especially if you come from a country like the United States.

A tax expert can help those who are worried about being in violation of the Foreign Account Tax Compliance Act (FATCA) when they retire abroad.

The Foreign Account Tax Compliance Act (FATCA) was passed as part of the HIRE Act and mandates that citizens of the United States disclose their foreign financial accounts and foreign assets of a certain value.

In order to avoid paying withholding taxes on withdrawable funds, American account holders of foreign financial institutions and certain other non-financial foreign entities are generally required to report on the foreign assets held by their accounts.

Find a way to stay connected with friends and family back home.

The absence of loved ones is often cited as one of the most challenging aspect of expatriate life, and this is true for retirees as well. Make preparations to stay in touch with the people who matter to you.

Staying in touch remotely is now easier than ever thanks to innovations like smartphones and online video conferencing software like Skype; however, a stable internet connection is still essential.

If you’ve been living abroad for a while, you may have lost touch with some of your closest loved ones. Make sure that you have access to the internet so that you can Skype or FaceTime them regularly–it will help keep your relationship strong.

It’s ideal to have access from your own home, but public places like libraries and cafes now offer internet access for those who don’t.

You can also explore options like virtual private networks or other technologies that allow you privacy when using social media sites like Facebook and Twitter. If this is not possible in your country of residence, consider using another platform like WhatsApp if it’s available there instead!

You should also have a backup plan in case something goes wrong while you are away. Give someone back home your contact details and a copy of your personal identification.

Plan your retirement at least a few years before you actually move.

Planning your retirement at least a few years before you actually move is critical to making sure that the transition goes smoothly and that all of your needs are met.

By planning ahead, you can make sure that everything is set up for when it is time for you to move out of the country and into an unfamiliar culture. Planning ahead will help keep costs down as well.

Keep in mind things like immigration and residency regulations that can change significantly between nations. Your passport usually determines whether or not a visa is required for entry and continued stay in the country of your choice.

There are also things like currency restrictions for entry and exit, recommended and required vaccinations, and passport validity dates to consider.

Many nations have laws dictating who can own land and under what conditions; some even forbid foreigners from ever buying property there.

Check the country’s regulations and make sure they fit into your budget and lifestyle goals before deciding to relocate there.

A real estate agent in the area is your best bet for obtaining relevant details. The International Consortium of Real Estate Associations is a great place to find such professionals (ICREA).

A country may have some say over what happens when a non-citizen sells property even if it does not limit who can buy it.

Make sure your legal rights to your property are secure as well. Buyers of residential real estate in the United States typically acquire marketable title to the property. In other countries, the rules may be murkier.

To make sure you know exactly what you’re getting into and that all paperwork is handled in accordance with local regulations, it’s a good idea to retain the services of a licensed real estate agent and an experienced local attorney.

Decide if you want to apply for citizenship in your new country.

You may be able to apply for citizenship in your new country. This can be a good option if you want to live there permanently, but it is not the only way to gain legal status abroad.

If you are married to a citizen of the country, then you might be eligible for citizenship based on marriage. In some cases, this process is automatic if you have been living in the country for a specified amount of time; other times it requires an application and review process.

Some countries make it tougher than others with onerous requirements and plenty of paperwork. For many, the process is relatively straightforward for retirees, provided they do not wish to take a job and can demonstrate that they have a steady income.

This, of course, begs the question of whether you prefer the status of permanent resident or that of full citizen of your adopted nation.

Each country has its own unique set of advantages and disadvantages. For example, being a citizen of any European Union member state entitles you to certain benefits if you hold citizenship in any European Union member country.

For retirees who wish to live abroad, the most common options are permanent residency and dual citizenship.

If you have dual citizenship, you will be able to move freely between both countries and enjoy the benefits of both passports within certain limits.

Keep in mind that for Americans, a U.S. tax return must be filed annually regardless of citizenship or residency status.

Many expat financial advisors specialize in helping clients plan their retirement abroad
Many expat financial advisors specialize in helping clients plan their retirement abroad. | Photo: Pexels

Find a financial advisor who can help you plan for your retirement abroad.

Finding a financial advisor who can help you plan for your retirement abroad is crucial. You want to make sure that they are well-versed in retirement planning and know how to navigate the laws of your new country.

Additionally, they should be familiar with the local tax laws of your new country as well as any other factors that may impact or affect your finances during this time period such as healthcare, insurance, and taxes.

To help manage your tax burden, it’s important to find a tax advisor who understands the implications of living abroad and can advise you on how best to file your taxes in your new country.

A financial planner is a versatile option that can help you create a plan tailored to your specific needs. If a client requires a second opinion on a matter, they can refer them to the appropriate specialist.

A competent financial planner can connect you with the appropriate tax specialists, asset managers, and retirement savings experts. The best ones can even perform these tasks for you.

The best consultants can also provide advice on where to send your kids to school and help you sort out your pension and insurance needs.

Plan out your estate in case the worst happens while you are abroad.

If the worst happens while you are abroad, you should also have a plan for what will happen to your estate.

The purpose of estate planning is to organize the safekeeping, administration, and distribution of one’s assets after death. Consideration is also given to the administration of a person’s assets and debts in the event of incapacity.

This isn’t something reserved for the super-rich only, despite popular belief. Anyone can and should make plans for their estate—especially expats who are in another country.

Real estate, vehicles, stocks, artwork, life insurance, pensions, and even debt can all be part of a person’s estate. Reasons for estate planning range from ensuring the financial security of a surviving spouse and children to leaving a charitable legacy and providing for future generations.

Creating a will is the first and most fundamental step in estate planning. Other important components of estate planning include:

  • Reducing the size of an estate tax bill by naming beneficiaries on trust accounts.
  • Appointing a legal representative to look out for minors
  • Having a designated person carry out the wishes of the will
  • Setting up or changing beneficiaries on retirement and savings accounts
  • Making funeral preparations
  • In order to reduce their taxable estate, many people have begun making annual gifts to various charitable organizations.
  • Creating a power of attorney (POA) to manage financial resources

Organizing your assets and debts in preparation for your death is an important part of estate planning. In addition to outlining your wishes for your funeral and favorite charities, estate planning is a great way to provide for the care of your minor children and pets.

However, you should not conflate the act of writing a will with the process of estate planning as a whole. While you’re at it, choose an honest executor and check in on your finances frequently to make sure you’re not wasting money, especially if you plan your retirement abroad.

Now that you know the basics of planning a retirement abroad, all that is left is to get started. There are many factors to consider when planning a move like this, so it may seem overwhelming at first.

We’ve created this guide with everything you need in order to make an informed decision about where and how best to retire abroad.

Keep in mind that you should always seek the advice of a professional for the best possible experience during your retirement.

Pained by financial indecision? Want to invest with Adam?

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Adam is an internationally recognised author on financial matters, with over 760.2 million answer views on Quora.com, a widely sold book on Amazon, and a contributor on Forbes.

This website is not designed for American resident readers, or for people from any country where buying investments or distributing such information is illegal. This website is not a solicitation to invest, nor tax, legal, financial or investment advice. We only deal with investors who are expats or high-net-worth/self-certified  individuals, on a non-solicitation basis. Not for the retail market.

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