How do you imagine retiring abroad? What’s it like? What does it entail? Does it sound as relaxing as films and television programmes show it to be? It probably does! A day spent on your front porch, overlooking the beach, sipping a drink now and then, enjoying the life. Sounds accurate? Well, perhaps it sounds good, but it isn’t quite so. There are several perks to retiring abroad but it has to be carefully planned, otherwise, the cons will outweigh the pros. What’s there first step to consider? Moving abroad. Secondly, having enough finances to be able to comfortably live the retired life.
Financing is the first big thing you’d have to think about – and this cannot be done in just a couple of years. A retirement fund is critical – as the amount that you’d decided to save will be the amount that you will have and use. That is why it is important to start saving money today! If you start saving early, you’ll be letting money, make money due to compound interest. If you start putting aside a small sum from your salary at a young age, the total sum will eventually be a much bigger one than if you had to start later in life. An individual retirement account (IRA) will be helpful to you in planning ahead.
Deciding the country
Retirement wishes would differ from one individual to another, therefore, there isn’t a perfect location for retiring. Same as every other big decision, this mustn’t be rushed. The great thing about retirement is that you’re not tied down to a particular country and you’re flexible to go wherever. However, there are several factors to consider when choosing where to retire. The cost of living, taxes, safety and the climate should all be on your mind. If you’re unsure of which country to retire in, check out the list of the best places to retire.
Cost of living
Expert estimate that around 55% to 80% of the current income is spent in retirement. Hence, you’ve had to save most of your income throughout the years. This will determine your lifestyle in your new home. Do you plan on buying a car abroad too or will you be walking or using public transportation? It is very important to research ahead of making a decision. Look into food costs and dining out to help you determine an idea how much it will cost to live there comfortably. This will also help in coming up with an answer to a question that you will to ask yourself before you leave: will you be renting a house or buying one?
This should be one of the critical deciding factors for your move. Health is wealth, and it’s particularly to know that your wellbeing is looked after in your later years. Look into the quality of hospitals and healthcare in the various countries that you’re considering to be your next home. Moreover, experts noted how the coronavirus pandemic illustrated the importance of how healthcare is run. It is not just the quality of the hospitals and medical attention that needs to be looked at, but also the way that local and state governments approach health threats.
As you grow older, you become more vulnerable. It’s important to take a look at any crime statistics of the countries that you’re considering. It goes without saying, if the particular country doesn’t have a low crime rate, perhaps you should look at other places.
Taxes do not just disappear in retirement! Which is why you need to know of the new country’s tax system. Check out state taxes and any taxes on retirement income. Taxes will vary from one place to another, therefore, learn more about how this would affect you.
Do you mind the cold and rainy weather? If not, start crossing those countries with low climates off your list. It’s important to know about the climate because as previously mentioned, you would want to have a comfortable life there. Shovelling snow may not be on your bucket list, so you may want to avoid countries where it snows.
Some of the mentioned aspects can act as advantages to retiring abroad. You are free to retire wherever you want – the options are endless. Of course, you have to find the right match for you. The right choice will allow you to move to a better living area, an improved healthcare system and perhaps, a more adventurous aspect. Retirement can be spent in various ways. Retiring abroad gives you the opportunity to make that time as close to your dreams as possible. Whether you are chasing a calm retirement or one full of adventure and travel, retiring abroad will make it easier for it to happen. Additionally, your new home will become a new travel destination for your family and friends. It will be a good reason for them to come over, catch up and get together.
On the other hand, the move may create some added expenses and stressing issues. You will need to decide whether you will be keeping your old home or selling or renting it. If so, you will need someone to look after the place whilst you’re away. The move itself can be quite costly as well. Moving countries will create a distance between you and your loved ones. You will need to be prepared to have such a long distance from those closest to you, even though technology makes it much easier to communicate with. Despite being away, it’s always a good thing to stay in touch. Lastly, especially if you’re moving to a completely different area from what you are used to, you may end up facing some culture shock. Don’t worry – you’ll get used to it soon enough!
If you’re thinking about retiring abroad and need more information, contact a financial adviser today.