The coronavirus pandemic has impacted the plans of many people around the world, and retirees living overseas are feeling unique effects. The spread of the virus has led to quarantines, lifestyle changes and financial adjustments. Here’s a look at what senior expats are facing, and the steps they’re taking to cope and move forward.
Stimulus Check Challenges
The U.S. government sent out stimulus checks to some Americans, including retirees, during the spring of 2020. Expats who keep a U.S. mailing address and have a bank account at a U.S. bank may have received the stimulus check they were eligible for. Retirees living overseas may not have automatically received a payment. “For those who have not maintained a U.S. banking relationship or address of record, the IRS has no way of sending the money,” says Edd Staton, a retiree who lives with his wife Cynthia in Cuenca, Ecuador. “The agency isn’t wiring funds to foreign bank accounts, and mail service in many foreign countries is incredibly inefficient.” If you are an expat who is eligible for a stimulus check, you can submit your U.S. bank account information to the IRS online and ask for a direct deposit.
Global Stock Market Volatility
The pandemic has caused stock market upheaval and business closures, and expats may feel the ripple effects of that in their neighborhoods. “Worldwide financial volatility has likely given expats on a fixed income cause for concern,” Staton says. “Fluctuating currencies and shaky economies, especially in Mexico and the developing countries of Latin America, will continue long past herd immunity or the development of a vaccine.”
If a retirement account dips, it can be helpful to set up a new game plan. “It’s extremely easy to get panicky once you see your portfolio fluctuate in value, but making rash decisions will only hurt in the long run,” says Samantha Hawrylack, co-founder of How to FIRE, based in Coatesville, Pennsylvania. To adjust, reevaluate how much you need to live comfortably. Steering away from a renovation or reducing transportation costs could make it easier to spend less. “Saving money now and learning to live on less will only help in the future,” Hawrylack says.
If your funds are invested in U.S. dollars, keep an extra careful eye on currency fluctuations in the coming months. “Retirees living abroad should be mindful of exchange rates between the U.S. dollar and their retirement location’s local currency,” says Frederic Behrens, a wealth advisor at Round Table Wealth Management in New York who specializes in working with global families. If you’re used to a certain exchange rate, you may have to make some adjustments if the dollar or your current location’s currency changes significantly.
Retiree Health Coverage Overseas
Now is a good time to double check that your insurance plan will cover the health services you might need in retirement. “While Medicare is heavily relied on by people 65 and over in the U.S., that type of coverage will not be provided to American expats,” Hawrylack says. “Many Americans will have to look for national or private foreign plans to fulfill their needs.” Review your current policies and make sure you have the coverage you need, especially if you have a condition that makes you more vulnerable to COVID-19.
Those living in countries far from their loved ones may have to settle on video meetings to see them. “A planned trip in the spring was obviously canceled, and we’re currently trying to navigate travel and quarantine restrictions to reschedule a visit as soon as is practical and safe,” Staton says.
Many countries now have severe travel restrictions. Maya Frost, a semi-retiree originally from Portland, Oregon, moved to Buenos Aires, Argentina, in October 2019 with her husband. The couple planned to travel to California in April 2020, but COVID-19 changed their plans. “The lockdown hit hard here on March 19, including a ban on all travel in and out of Argentina,” Frost says. “We’ve spent the entire lockdown, which is still in effect, in a studio apartment.”
When looking at rescheduling, it’s important to check both the country you’ll be departing from and the country where you plan to arrive. By researching before buying tickets, you’ll know if you need to be tested for COVID-19 before traveling, if traveling is allowed and if you’ll need to quarantine upon arrival. “Many people are not traveling internally or internationally simply out of an abundance of caution,” says Raoul Rodriguez, a wealth manager with expertise in cross-border financial planning at Pinnacle Advisory Group in Miami. “Others can’t travel because of travel restrictions imposed by another country.”
Jonathan Look, an early retiree currently living in Malta, has followed travel protocol closely since the beginning of the virus. “If I want to travel in Europe, many countries are requiring a swab test before we can take a ferry or fly,” Look says. “The tests are readily available, and if I make an appointment in the morning, I can have my results by afternoon.”
Carrying On With Retirement Overseas
While some countries remain in lockdown, others are opening up. And many places are finding ways to cope that meet the needs of their residents. “After moving past initial lockdown precautions, our lifestyle has been unaffected by coronavirus, except for wearing masks everywhere outside of our home,” Staton says.
Many expats first moved abroad with an eagerness to learn about how to live in a different place, and that can-do attitude can make it easier to be positive. “Although frustrated about the limitations that the virus has put on their mobility, they understand the need to cooperate with local authorities and get this thing under control before life can return to normal,” Look says.
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