How to Prepare for Retirement Overseas

Relocating overseas

Moving overseas for retirement is an exciting opportunity to reinvent your life and potentially reduce the cost of retirement. But it’s a good idea to make sure another country will meet all of your retirement needs before you move there. Here are 10 ways to prepare for a move overseas in retirement.

Lower your cost of living.

One of the greatest advantages of retiring overseas can be a dramatically reduced cost of living. If your retirement budget is modest, your best options for enjoying a rich, full and comfortable retirement — and even a few luxuries you can’t afford in the U.S. — are likely to be overseas. Depending on where you settle, you may be able to cut out one of your biggest current expenses: the cost of owning a car. Many cities overseas have excellent public transportation that is far more efficient and cost-effective than driving your own car. In Europe especially, walking is an enjoyable way to experience a city.

Rent first.

If you’re considering retiring in a new country, it’s usually wise to rent a place to live at first. This will give you a chance to experience the area before committing, and you can move on easily if the country or part of town doesn’t meet your needs and preferences. Different neighborhoods of the same city may offer vastly different lifestyle opportunities. Consider visiting at different times of year as well. Test the atmosphere during peak tourist season and compare it to the lull of the low season. Make sure you see the place during winter or the rainy season, not only during spring and summer when the weather is beautiful.

Test out the amenities.

Appropriate medical care and transportation options are a necessity for retirement. Check out whether potential retirement spots provide all the amenities you need to enjoy your hobbies, perhaps including surfing, boating, fishing, diving, golf courses, restaurants, theaters, first-run movies, shopping malls, bridge clubs and tennis teams. You may not have had time to practice your hobbies often during your working years. Retirement is your opportunity to rediscover your passions, so make sure your destination of choice offers the things you like to do. Pursuing your hobbies is also a great way to meet new people and socialize overseas.

Purchase health insurance.

You typically can’t use Medicare benefits in a foreign country. A local insurance policy in the country where you relocate can be inexpensive, but coverage is sometimes limited to particular regions or facilities. An international insurance policy is more expensive, but it offers more geographic flexibility. Some people even opt out of insurance altogether and keep an emergency fund sufficient to cover the costs of even catastrophic care. Talk to expats living in the place that you’re considering, and ask about their experiences using the local medical facilities. In certain countries, you may be able to access the national facilities after a certain number of years as a resident.

Look for good weather.

Every person has a different definition of “perfect” weather. Identify your ideal climate, and retire to a place where you can enjoy that weather year-round. Climate can affect your ability to enjoy your hobbies if they are outdoors. It can also impact your cost of living in positive or negative ways. If you move to Cartagena, Colombia, for example, you will need air conditioning, which will add to your monthly utility bill. In Medellín, Colombia, the weather is mild enough that you won’t need heating or cooling in your home, saving you that expense. Also think about what scenery you would like to see from your bedroom window every morning, perhaps including the city, beach or mountains.

Learn the language.

Some people don’t feel comfortable retiring in a place that doesn’t have fellow English-speakers. Your first few months of getting settled in your new home will be a whirlwind. Not being able to communicate can be socially isolating and could make it difficult to accomplish basic tasks like setting up a new phone and internet plan, opening a bank account, conducting meetings and completing paperwork. Consider whether your foreign language skills are proficient enough to communicate, and if not, how willing you are to learn a new language. Learning at least a few words of the local language is always recommended.

Consider the transportation options.

If you plan to travel regularly in retirement, either back home to visit family or far and wide to take full advantage of the freedom this stage of life can afford, consider the distance to the nearest international airport before deciding where to relocate. Travel is an important factor to include in your monthly cost of living expenses as well. Southeast Asia is one of the most affordable places to live in the world, but trips to and from the U.S. will add up quickly. You should also consider how you will get around in your new life overseas and whether you will need to invest in owning a car.

Examine the exchange rate.

The rate of exchange between the local currency and the U.S. dollar could have a big impact on your retirement finances, and changes in the exchange rate could affect your spending power. You can avoid exchange rate problems by moving to a country that uses the U.S. dollar as its currency, such as Panama or Ecuador, or that pegs its currency to the dollar, such as Belize. The dollar’s current strength against currencies worldwide creates opportunities for American retirees to enjoy greatly enhanced purchasing power.

Get tax breaks for retirees.

Some countries roll out the welcome mat for foreign retirees, offering sometimes significant tax breaks, in-country discounts and other perks to resident retirees. Belize, Ecuador, Nicaragua and Panama are among the countries that offer a program of special benefits to attract foreign retirees. Look into your options before you make the move. In Belize, you can import household goods and vehicles duty-free. In Panama, as a resident above a certain age, you qualify for discounts on public transportation, hotel stays, museum entrance fees and even the ability to jump the line at the bank or post office.

Reinvent your life.

Retiring overseas means leaving behind your old life back home to start a new one, often in a different culture. You will need to strike a balance between adopting the customs of your new and exotic location overseas and keeping in touch with family and friends back in the U.S. Decide early on how much of an immersive experience you would like to have. You might be more comfortable in an established expat community where English is the spoken language, or you may prefer to go local and have a more culturally authentic experience. Your retirement overseas experience depends on your preferences and your appetite for change.

How to retire overseas:

— Lower your cost of living.

— Rent first.

— Test out the amenities.

— Purchase health insurance.

— Look for good weather.

— Learn the language.

— Consider the transportation options.

— Examine the exchange rate.

— Get tax breaks for retirees.

— Reinvent your life.

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How to Prepare for Retirement Overseas originally appeared on

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