Retiring in Austria in 2022

Retiring in Austria in 2022

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Introduction

Retiring in Austria does offer a lot of things such as high quality of life, solid cultural scene, beautiful architecture, and idyllic nature.

The country is also home to legendary composers like Mozart and Beethoven, as well as renowned psychoanalyst Sigmund Freud. In terms of happiness Austria ranked 10th in the world, according to the 2021 Happiness Score from the World Happiness Report, while it ranked 4th among the safest countries in the world based on the Global Peace Index report from the Institute for Economics and Peace.

In this article, I will give some input on how retiring in Austria works, including the potential living costs.

Retiring in Austria: Visa

While a particular retirement visa is not available in Austria, it provides numerous visa, such as the settlement permit which retirees most frequently choose for residency. You must be able to demonstrate that you are financially stable, have health insurance, and have a place to live in order to be approved for such permit.

A language test to demonstrate your proficiency in German is additionally required for Austrian residency. For those who are self-sufficient and do not intend to work while in Austria, a settlement permit is available. You can submit an application while in the nation on a tourist visa or while still inside the US. Due to the lengthy application process and the fact that it is entirely in German, it is recommended to deal with an immigration attorney.

Retiring in Austria: Eligibility Criteria

A third-country citizen must fulfill the requirements listed below in order to be qualified to apply for a settlement permit in Austria:

• You need to be able to support yourself. People who are citizens of third countries must have a stable and consistent source of income so they do not have to rely on public assistance.
• You need to be insured for medical expenses. A health insurance plan that offers benefits in Austria and covers all risks is required for citizens of third-party nations.
• You must be provided with a standard form of lodging. The legality of a third-country national’s claim to a space must be established. For his or her family, the lodging must be sufficient.

Retiring in Austria: Residency

To apply for a residency permit, applicants must submit the following materials:

• a passport that has been signed and is in good standing
• birth certificate
• a current passport-size photo
• evidence of lodging in Austria
• proof of health insurance
• evidence of adequate financial resources

If you are an EU or EEA national, moving to Austria will be much simpler for you because you do not require either a visa or a work or residency permit to live there.

Retiring in Austria: The Good Side

Why is Austria a great place to settle in?

Here are several factors that make the European country a fantastic place to retire:

• Quality of Life. In terms of standard of living, Austria is ranked second based on the Quality of Life Index by Numbeo, a global cost of living data aggregator. The country is also renowned for providing its residents with a high-end lifestyle. Due to their freedom, respect for women’s and human rights, and abundance of green space, several Austrian cities are among the most livable in the world.
• Healthcare. Excellent free healthcare is available to Austrian citizens. Austria has made it possible for its inhabitants to access both public and private healthcare options based on their medical plan. Everyone has access to top-notch, reasonably priced healthcare throughout the nation.
• Safety. Austria has drawn a large number of expats to live there since it is frequently ranked as one of the safest nations in the world. Austria is the ideal location for people who want to live in a secure environment because of its low crime rate, with serious crimes like carjacking, robberies, and assaults happening infrequently.
• Nature. Austria is ideal for a calm and tranquil retirement because of the breathtaking Alps vistas and the pristine lakes that create a lovely landscape. The nation is home to a wide range of natural and distinctive attractions as well as a diverse geography.

Retiring in Austria: Cost of Living

Retiring in Austria would in general cost you less than if you would retire in the US. For comparison, Numbeo estimated that you must have about $3,983 in Austrian capital Vienna (as of the time of writing) so as to maintain the same standard of life that you can have with $6,900 in Washington, DC. These figures assume that you are renting in both cities.

Asset management firm Mercer also listed Vienna as the 21st most expensive city in the world for expats in its 2022 Cost of Living City Ranking. That’s way lower than New York at the 7th spot, Hong Kong at the top spot, and fellow European city Zurich at number two.

Renting a one-bedroom apartment within Austria’s city center costs 738 euros per month and 600 euros outside that area. The costs for buying apartment within and outside the city center can reach 5,304 euros and about 3,918 euros per square meter, respectively.

A meal at an inexpensive restaurant in Austria is estimated to cost 14 euros, while a mid-range restaurant can charge 60 euros for a three-course meal for two.

The overall cost of living in the country for a family of four can reach an estimated average of about 3,065 euros per month, while a single person can live off roughly 881 euros a month, both excluding rent.  

Retiring in Austria: Healthcare for Pensioners

According to German market and consumer data provider Statista, Austria’s health index score ranked 25th in the health and health systems ranking of countries across the world in 2021. For comparison, Austria even bested the US, which ranked 47th.

Austria offers cheap access to healthcare amenities of the highest caliber for the majority of its citizens, residents, and visitors. In essence, everyone living there has access to medical care, regardless of their financial situation or age. The country’s top-notch healthcare system is inexpensive and simple to use.

The majority of Austrians have access to public health insurance, which is deducted right from their paychecks. People who make less than a specific income, as well as those who are disabled, enrolled in school, or retired, can use it for free.

You must initially register as a resident in Austria if you are a retiree and are not already employed. A voluntary insurance policy will thereafter be required of you. Your insurance policy can also include your dependents.

A European Health Insurance Card (E-card) will be provided to you once you have registered. Each time you see a doctor, you will need to take this. It’s noteworthy that all EU citizens can use the E-card. You can also receive publicly funded healthcare in any of the 27 EU nations.

The E-card grants you access to online services in addition to doctors. Look for a medical facility that reads Kassenarzt (contracted doctor) or Alle Kassen (all insurers). These doctors are free to see; however, a private physician will cost money. Your insurer should pay for the remaining 80% of the cost.

Retiring in Austria: Private Healthcare

Those who want not to use the public healthcare system can access private medical care in Austria, wherein a broader selection of doctors, clinics, and hospitals are typically available, and there are usually no waiting times. When people get private health insurance, they also normally do so to augment their public insurance.

In Austria, a doctor’s appointment can cost up to $70 and private health insurance runs roughly $240 a month. You can buy health insurance coverage for expats from American or Austrian companies, and you must have health insurance to acquire a residence visa or settlement permit.

Retiring in Austria: Safety

Retiring in Austria shouldn’t be a problem when it comes to security because it is one of the safest countries in the world.

In fact, the country placed fourth (along with Taiwan, Slovenia, and Portugal) in terms of countries/areas with the highest law and order index scores as per the 2021 Law and Order report of analytics and advisory firm Gallup that was based on a 2020 global survey for perceptions of law and order. Austria also ranked seventh in regard to countries/areas where people feel safest walking alone, according to Gallup.

On the other hand, the US Department of State reported that Austria is one of the least violent nations in Europe with minimal crime concerns. According to the State Department, wallet and purse snatching, which frequently occurs in crowded public spaces, is the most frequent crime faced by US citizens. Other crimes of opportunity take place in crowded tourist destinations, restaurants, shopping malls, and trains where a victim is usually not directly in possession of valuables.

Road safety is not a major issue in general. However, the threat of terrorism is currently rated as Medium when it affects or is directed against official US government interests. The fact that crimes can occur anywhere must always be kept in mind, though. Retiring in Austria is generally safe, and there are no locations you should skip seeing even while on a mere vacation.

Retiring in Austria: Taxes

Every year, regardless of whether they are present in the nation or not, all US citizens are normally mandated to file a tax return. Based on how much time a person spends outside of the nation, the foreign earned income exclusion (FEIE) may apply.

If you earn money while you’re in Austria, your income could be subject to up to 55% in taxes. Austria won’t tax your income earned abroad, though. As a result, the tax you pay on your retirement income will be the same as it would be if you were living in the US, and the tax you pay on any income you generate in Austria would be different. You can check our article titled 24 Vital Things on American Expat Tax You Should Know for more details (if you are a US citizen).

Pay-as-you-go taxes are the norm in Austria. This means that tax brackets are determined by how much is earned in a year before unique circumstances are taken into account. The investment income generated by employer or employee contributions is not taxable to the pension fund. Investment income is thus exempt from taxes.

Retiring in Austria: Employment

Will you be allowed to work with a settlement permit in the country?

Sad to say, you are not able to work with the settlement permit. This kind of residency visa permits its holder to remain in the country without seeking gainful employment. As a result, engaging in any profitable activity is prohibited when retiring in Austria.

Retiring in Austria: International Pension Transfer

Your current state pension can be paid immediately into your new Austrian bank account if you’re retiring in Austria from another EU country or the UK. You are still able to receive yearly increases from the UK at this time. However, because of Brexit, there could be changes in the UK.

You can transfer your UK pension entitlements to a qualifying recognized overseas pension scheme (QROPS), which is an overseas pension plan. Importantly, it enables you to pass down your residual assets to your heirs without deducting any UK taxes when you pass away.

The QROPS program does provide you the choice of where to invest your pension money, though. In most cases, Malta is the preferred jurisdiction for Austrian citizens. This is mostly because it is an integral member of the EU and has a highly sophisticated and regulated tax structure.

Austria has social security deals with a number of nations that are not members of the EU. As an illustration, particular pension insurance deals exist between Canada and the US.

Retiring in Austria: The Caveat

If you’re set on retiring in Austria, do note that among the major reasons Austria ranks so poorly in this category include the impression that residents are unfriendly, so you’ll probably be faced with the difficulty of making friends on top of the challenge of learning the native tongue. All of these makes life in Austria challenging for foreign nationals.

Retiring in Austria: Final Thoughts

Regardless of the area you select, retiring in Austria will give you access to a location that is almost crime-free and housing that is widely affordable. Furthermore, there is nothing that prevents you from packing up your possessions and leaving if you decide it is not the right place for you.

When deciding where to settle in, you should ultimately consider your unique needs and preferences. Prior to making a decision, weigh the advantages and disadvantages; take some time to give it some thought.

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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.