10 Tips to Consider Before Retiring Abroad

Category: International Retirement

Nicaragua Coast

Nicaragua Coast

If you believe the marketing hype you can retire to any number of offshore paradises and live like a prince on social security – or less. In our opinion it certainly is possible, but there might be some important trade-offs along the way. Forbes just had a a great article, Americans Find a Retirement Haven in France, that raised several important things to consider about expatriate retirements. Here are our 10 tips to consider before you buy a one way ticket to paradise.

1. Investigate the crime rate. Places like Brazil and Mexico can be extremely dangerous. There are safe places in almost any country, but consider how much you might be restricted in your daily activities.
2. Can you take living far away from friends and family? Losing contact with these people is the number 1 reason why people return to the USA.
3. Consider what medical care is available, and at what cost. In many countries it’s a pleasant surprise that you can buy affordable insurance and quality care. In others you might be disappointed in the quality of care, and face an expensive medical evacuation back to the states. This is particularly true for some of the medical specialties Americans have come to expect.

4. Will you have to live in a gated enclave? For many folks, this is OK. For others, it might be too restricting a lifestyle.
5. Check out the tax situation. This is perhaps the most complex area to investigate. The Forbes article explained how living in France can be affordable from a tax standpoint, if you take the right steps like putting your assets into a trust and distributing money to yourself in a certain way. For the unwary, however, double taxation and steep inheritance taxes might take away the bargain status.
6. Evaluate the political situation. Some countries in Latin America have a changeable political environment. The situation might be peaceful one day, but a new dictator could change all of that. You don’t want to a resident on the day the government is overthrown.
7. Are you OK with widespread poverty. The reason why you can hire a maid for $50 a week in some countries is because of the grinding poverty in your new country. Some people find they are not comfortable living in a place feeling like they are the feudal barons among the serfs.
8. Will you be welcome as a resident? Some countries like Australia only want high asset or high income residents, so budget seekers might be unwelcome. Obtaining a visa might be harder than you think.
9. How will you get money sent to yourself. Forbes reports that the U.S. prohibits direct deposits into accounts in certain countries like Vietnam. As a result you must follow tight restrictions on how your social security payments are made to you, and processing fees can take a big hit of your income.
10. Just how adventurous are you. In our experience the happiest expatriates fall into 2 classes. Those who love immersing themselves in another culture, including learning the local language, make up the first group.The other group is very happy to live in a gated community and embrace the lifestyle there. Those who retire abroad just to save money are rarely the happiest.

Forbes also came up with its list of the friendliest countries for retiring abroad. Making the Forbes cut of the best places to retire in the world were Austria, Thailand, Italy, Panama, Ireland, Australia, France, Malaysia, Spain, and Canada.

Bottom line: Retirement abroad requires careful research. Talk with people who have done it. Read the books. Hire a tax expert. Determine your priorities and carefully investigate the places you are considering. Lastly, go ahead and visit your new paradise. If you like it, rent for a while. Ultimately that’s the only way to be sure.
For further reference:
Don’t miss our “Retiring in Mexico: The Good, the Bad, and the Ugly” article.

Posted by John Brady on October 27th, 2009

10 Comments »

  1. […] lots of places to live for expats. If you are thinking about the expat life, check out my 10 tips to consider before you retire abroad,which was inspired by the Fortune […]

    by Forbes Top Ten Foreign Retirement Destinations - City-Data Forum — October 27, 2009

  2. […] lots of places to live for expats. If you are thinking about the expat life, check out my 10 tips to consider before you retire abroad,which was inspired by the Fortune article You wrote that? Is that your website? Interesting. I […]

    by Forbes Top Ten Foreign Retirement Destinations - Page 2 - City-Data Forum — October 27, 2009

  3. Thanks for the informative article.

    by Doro — October 28, 2009

  4. These comments were made by Teak on City-Data forum about this list:
    “Using these 10 criteria, I can say that Malaysia is a plus in all columns except for #2: Living far away from friends and family. Any trip back to the USA will be expensive since it entails at least 5 flights, one-way, for me. Five airline tickets. Expensive.

    In Malaysia, there is no need to live in a gated enclave. Neither is there widespread poverty. One is not really welcome to become a Permanent Resident, but the government has made it fairly easy to obtain a retirement visa (good for up to 10 years at a time).”

    by Admin — October 28, 2009

  5. […] 2.The Best Places in the World to Retire. To each his own tastes. For most Americans, the good old USA is the place to retire. People in other countries probably feel the same way about their countries. But there is a certain percentage of the population for whom the allure of a foreign retirement is great. If you are one of those folks, you might want to look at these 2 articles: Top 10 International Places to Retire 10 Tips to Consider Before You Retire Abroad […]

    by » The Best of the Best Places to Retire Topretirements — May 18, 2010

  6. Good article on retiring abroad. While overseas retirement is the right choice for some, it’s not for everyone, and you should definitely do your homework before deciding it’s the right move for you.

    by Nick — July 20, 2010

  7. Great article. These are some good hard questions to ask for anyone contemplating retiring abroad.

    by Live abroad retire abroad — July 20, 2010

  8. After traveling to many countries I sometimes laugh at the articles posted about “Retire to Paradise”….the Fortune article has some good points…#1 being u must b the person who wants to absorb what the country has to offer…I see many expats and they r like” well..its not like that in the USA…Right !! Dont expect it…cos u r NOT in the USA…and if u cant…if u r “old” n set in ur ways…then dont even think about going to another country…U wont make it……Also…make sure U got something to do in ur new country….For instance…Ive been to Belize….n u had better like to Scuba Dive and Fish…cos if u dont ??? U will end up every day at the bar…like many others…then finally going back home….

    by scott lance — September 18, 2010

  9. Madeira island in Portugal
    Happy new year

    by Tony Nobrega — December 31, 2010

  10. This piece badly overstates the risk of Mexico. After 15 months of criss-crossing Mexico, my new book looks at Americans and Canadians who’ve chosen to avoid the big expat colonies in San Miguel de Allende and Lake Chapala. What they’ve found is both diverse and surprising. The book is called Into the Heart of Mexico: Expatriates Find Themselves Off the Beaten Path.

    by John Scherber — February 20, 2014

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