Tips and tools for retiring abroad

Tips and tools for retiring abroad

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What are the key factors to consider when retiring abroad? My spouse and I will soon be retiring and are interested in moving outside the United States.

Whatever your reasons for aspiring to retire abroad – a lower cost of living, a better climate or a desire for adventure – it is important to do your research and learn everything you can about the country you are interested in. Here are some different tips and tools to help you make an informed decision.

Researching tools

If you are deciding where to retire, use your preferred online search engine to find websites that provide articles, information and the top retirement destinations abroad. Considerations to keep in mind when choosing your location include cost of living, climate, health care, housing, visas and infrastructure.

Once you pick a country or two that interests you, seek out a network with some others who have already made the move you are considering. They may give you tips and suggestions and explain the advantages and disadvantages of day-to-day living in a particular country. Social media platforms can be a good resource for locating expatriate groups.

Before committing, experts recommend visiting the desired country multiple times during different seasons to see whether you can envision yourself living there and not just exploring the place as a tourist. Here are some other factors to consider.

Cost of living 

Retiring abroad used to be seen as a way to stretch your retirement dollars, and in many countries it is still a possibility. Depending on where you move, the currency exchange may not be advantageous and the U.S. dollar may not stretch as far. You can compare the costs of living in hundreds of cities and countries by searching for key phrases like "costs of living" followed by the state or country you desire to compare.

Visa requirements

If you want to spend only part of the year living abroad or are willing to move from country to country, most countries offer an easily obtainable three- or six-month tourist visa. If you want to set up a more permanent residence abroad, you will need to determine the process depending on where you want to retire. To learn more about visa requirements in the countries that interest you, you may want to visit the website for the U.S. Department of State's Bureau of Consular Affairs, travel.state.gov, to get started.

Health care

Medicare and most U.S. health insurance companies do not provide coverage outside the United States. Check with the embassy (USembassy.gov) of your destination country to see how you can obtain coverage as a foreign resident. Many countries provide government-sponsored health care that is inexpensive, accessible and comparable to what you receive in the States.

Most people who retire abroad eventually return to the United States, so experts recommend paying your Medicare Part B premiums. If you drop and resume Part B or delay initial enrollment, you will pay a 10% premium penalty for every 12-month period you were not enrolled.

Housing

If you are interested in buying a home in a foreign country, it can be complicated. You should talk with your professional adviser or counsel to determine if it may be better to rent first until you are sure you want to permanently reside there.

Money matters

Opening or maintaining a bank account abroad can also be difficult. You may consider establishing a checking account with a financial institution that has international reach. Claiming your Social Security benefits should not be a problem, as they offer direct deposit to almost every country in the world. Visit SSA.gov/international/payments.html for more information.

Taxes

You should also research tax rules in your prospective countries and be aware that even if you are living abroad, as a U.S. citizen you will still most likely need to file an annual U.S. tax return – visit IRS.gov/pub/irs-pdf/p54.pdf.

[If you are going to move abroad, you may consider joining an American Legion post in your new country of abode. Learn about Foreign and Outlying Departments and Posts of the American Legion (FODPAL) here.

“Savvy Living” is written by Jim Miller, a regular contributor to NBC’s “Today Show.” The column, and others like it, is available to read via The American Legion’s Planned Giving program, a way of establishing your legacy of support for the organization while providing for your current financial needs. Learn more about the process, and the variety of charitable programs you can benefit, at legion.org/plannedgiving. Clicking on “Learn more” will bring up an “E-newsletter” button, where you can sign up for regular information from Planned Giving.