6 Things To Know If You Want To Retire Abroad
I was recently speaking with a couple about what they imagine their retirement would look like.
“We’d love to purchase a property in Italy and retire there,” they said.
More and more, I’ve heard people say that they would like to retire outside of the United States, citing costs of living and access to medical care. In fact, Americans drawing their Social Security benefits abroad increased 84% from 2020 to 2023.
Here are six things you need to know if you’d like to retire abroad someday.
Cost Of Living
Realistically, not every destination abroad will be cheaper than where you live in the United States. You should not assume you can get by with less without first doing your research. Understanding the country’s cost of living index could be a first step in discovering affordability.
To take it further, you will want to realistically look at your personal budget and priorities compared to costs in your destination of choice. One major budget item that many of my clients living abroad weren’t prepared for is the cost of seeing family. If you have family remaining in the United States that you’d like to visit, this may add a significant annual expenditure.
Visas And Paths To Citizenship
Many countries may be generous with visas for young working families but more hesitant with an aging population that can’t prove much earned income. It’s crucial to do your research to make sure you’ll be able to stay in your chosen country for retirement.
Here are 13 countries with relatively low income requirements that offer paths to citizenship for retirees:
Argentina
Bulgaria
Colombia
Portugal
Philippines
Costa Rica
Panama
Nicaragua
France
Ecuador
Mexico
Chile
Mauritius
Housing
For some countries, like Thailand, non-citizens generally are not eligible to purchase property. But in others, like Spain, purchasing properties can offer a path to citizenship. If you plan to purchase abroad but cannot buy a property outright, you may have some difficulty qualifying for a mortgage.
If you are choosing to rent instead of buying a home, make sure you understand all your costs, inflation, and if there are rent-stabilization options available.
Social Security And Pension
To be eligible for Social Security payments, you must have worked and paid into Social Security in the United States for at least 40 quarters, or 10 years. Even if you are entitled to Social Security, you will not receive payments if you move to a country where payments cannot be sent. You can find the list of eligible countries on the Social Security website.
Some families I’ve spoken with have expressed that they may want to move to the country where they’d like to retire before official retirement so that they can work to qualify for that country’s pension. This is a unique circumstance and could result in a reduction in your Social Security payments if you have less than 30 qualifying working years in the United States. I would advise researching the windfall elimination provisions in each country to see if you may be damaging your future pension income with this strategy.
Medical Care
When you age, your needs for medical care may increase significantly. You will need to ensure that you are moving to a country where you have access to the medical care you’ll need and that you have the financial resources to afford care. As an expat without residency status, you can gain global health insurance coverage through several programs.
If you can gain residency status and your country of choice offers free universal healthcare, you may be able to access care at no cost to you.
Elder Care
On top of medical care, you may have other needs arise. Traditionally, when people need assistance with activities of daily living or require memory care, it is categorized separately from many diseases and injuries. In the United States, this is known as long term care and it can be expensive, potentially adding more than $100,000 to your annual expenses.
Some countries with universal healthcare also offer complimentary elder care, like the United Kingdom and Australia. Unfortunately, these are some of the more difficult countries to gain access to, often requiring expensive investor visas for retirees.
Conclusion
Retiring abroad can be an exciting and rewarding venture, but it requires thorough planning and consideration of these six critical factors. From understanding the cost of living and housing options to navigating visa requirements and ensuring access to medical and elder care, prospective retirees must be well-prepared to make informed decisions.
Additionally, securing Social Security or pension benefits and evaluating the financial implications of long-term healthcare are essential steps in the process. By carefully researching and planning, individuals can create a fulfilling and sustainable retirement experience in their chosen destination.
This article was originally published by me on Forbes.com.
This informational and educational article does not offer or constitute, and should not be relied upon as, tax or financial advice. Your unique needs, goals and circumstances require the individualized attention of your own tax and financial professionals whose advice and services will prevail over any information provided in this article. Equitable Advisors, LLC and its associates and affiliates do not provide tax or legal advice or services. Equitable Advisors, LLC (Equitable Financial Advisors in MI and TN) and its affiliates do not endorse, approve or make any representations as to the accuracy, completeness or appropriateness of any part of any content linked to from this article.
Cicely Jones (CA Insurance Lic. #: 0K81625) offers securities through Equitable Advisors, LLC (NY, NY 212-314-4600), member FINRA, SIPC (Equitable Financial Advisors in MI & TN) and offers annuity and insurance products through Equitable Network, LLC, which conducts business in California as Equitable Network Insurance Agency of California, LLC). Financial Professionals may transact business and/or respond to inquiries only in state(s) in which they are properly qualified. Any compensation that Ms. Jones may receive for the publication of this article is earned separate from, and entirely outside of her capacities with, Equitable Advisors, LLC and Equitable Network, LLC (Equitable Network Insurance Agency of California, LLC). AGE-6858774.1 (8/24)(exp. 8/26)
