Top tips for retiring abroad
Posted by Heath Robinson on September 18th, 2024.
Deciding to retire overseas can offer the adventure of a lifetime. The chance to experience new cultures, beautiful landscapes and a lower cost of living can be very alluring. However, this major life change requires careful planning and consideration. Below are some key tips to help make the transition as smooth as possible, so you can enjoy this new chapter in your life to the fullest.
Why retire abroad?
There are many reasons to move overseas in retirement. Some expats move to live out long-cherished dreams, while others are persuaded by practical considerations such as healthcare, living costs, climate, or family connections.
Adventure is often given as a reason for retiring abroad. After a life of full-time employment, plenty of retirees are simply ready to decamp somewhere away from the hustle and bustle.
For practical-minded pensioners, the cost of retirement may be a factor in their decision. Many countries around the world offer low- or no-cost healthcare to residents, regardless of where they’re from.
Where to retire
It’s important to do your research before deciding where to go, as different places suit different lifestyles. Below are a few of the top-rated destinations according to International Living’s 2024 global retirement index:
Costa Rica
Costa Rica takes first place in the index, which takes into account housing, visas, living costs, climate and healthcare. Expats appreciate the weather and natural beauty of the country, as well as the high quality of life afforded by relatively low living costs.
Portugal
Portugal is another expat hotspot. The visa process is straightforward. Healthcare is affordable and good quality; moreover, a mild all-year-round climate means residents can make the most of the country’s glorious beaches.
Spain
Spain is a long-time favourite, as one of the sunniest countries in Europe. In addition to the weather, expats rate cultural opportunities and a high quality of life supported by a world-renowned healthcare system.
Visa requirements
While sorting a visa may not seem as attractive as scouting out possible retirement locations, it’s one of the most important parts of the emigration process.
Recognising residency requirements early on can save time when it comes to narrowing down your options. As Kathleen Evans, an employee at International Living, remarks, ‘Not every country is looking to woo foreign residents.’
It’s also worth noting that residency is not the same as citizenship; while residents can work in their host country and have access to healthcare, they can’t generally vote in elections, while citizens can. You may be eligible for citizenship of a country where your parents or grandparents were born without needing to give up citizenship in your home country.
Otherwise, you’ll need to investigate the types of residency available: from temporary to long-term and permanent. Temporary permits can be either limited or renewable, while you may need to meet income criteria or spend a certain amount on real estate to qualify for permanent residency.
Securing housing
Some countries have restrictions on foreigners buying real estate, including Greece, Denmark, and Singapore; others have complex rules for obtaining a mortgage. To get a full idea of the best places for foreign nationals to purchase property, speak to a consultant.
Budgeting & finances
Cost of living
The most obvious financial consideration to be made is whether the cost of living in the host country is significantly more or less than in your home country. The cost of housing, transport, healthcare, food and entertainment all add up, even if individually they are only marginally higher.
Healthcare
Healthcare in particular can cost a lot of money and is an expense you won’t want to scrimp on as you age. Before making any commitments, compare eligibility for local healthcare against the cost of private provisions. If you have healthcare insurance already, check and see whether it gives you any overseas coverage.
Transferring funds
Retiring abroad also requires some thought into how you will transfer funds to and from your new country of residence. From buying a home to accessing your pension, your transfer options can have a major impact on how much you receive when moving money overseas.
Taxes
It’s important to research taxation laws in whichever country you’re thinking of moving to, in order to avoid being charged more than you should. Some countries have double taxation agreements so that funds moving between countries aren’t taxed twice.
Pensions
If you are eligible for a pension from your home country, consider if or how it will be taxed, whether the money will be deposited into your foreign bank account, and whether you need to report the income.
Settling in
Other financial considerations include estate planning and social security benefits, however, there are equally important social aspects to moving abroad that are crucial for a smooth transition. Learning the local language is highly recommended for expats moving to a foreign-speaking country, while establishing a support network will help you feel at home. Where possible, invest in digital technology to stay in touch with loved ones – but don’t forget to seek out friends in the neighbourhood, via social groups or expat forums.
In summary – creating a successful life for yourself in a new country requires research and organisation, as well as a sense of adventure. To make the most of your next chapter, remember to consult the experts, and use a trusted currency exchange provider such as TorFX to ensure you’re not losing money on transfers.
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