Three Steps to Planning Your Retirement Abroad

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Three Steps to Planning Your Retirement Abroad

Millions of Americans have retired to other countries in recent years, and more are choosing to retire overseas all the time. While the change can be a drastic one, the benefits include warmer weather, reduced living costs and a more relaxed lifestyle.

Winters are getting harsher here in the United States, with many looking to spend their golden years in warmth and relaxation overseas. Initially not having the money you need is no reason not to retire to the location of your dreams! Here are 3 ways to help get you to that retirement you’ve always wanted…

1. Determine your budget

The first step is to calculate how much money you have to live on in retirement. Remember to include what your retirement income amounts to on a monthly basis, including pension, Social Security, investments and any other income you have. After you have determined how much you’ll have to spend you can start to research locations you can comfortably afford with that budget. Don’t forget the small bills that all add up, including:

  • Taxes: If you continue having income as a U.S. citizen, the IRS still expects you to pay U.S. taxes, no matter where you live.
  • Rent
  • Energy bills/Phone/Internet
  • Food/drink
  • Transportation
  • Healthcare
  • Leisurely activities

2. Choose Your Destination

Once you have your budget determined, you can start exploring your destination options. Tools like Numbeo and Expatistan are great for estimating the cost of living in different countries. Cross out the places you can’t afford. This will naturally narrow down which countries are realistic to put on your short list.

Once you’ve picked your top 3, check out what amenities each destination has for your specific needs.  Appropriate medical care and transportation options are a necessity for retirement. Also, check out whether potential retirement spots provide all the amenities you need to enjoy your hobbies, perhaps including boating, fishing, golf courses, restaurants, shopping malls, bridge clubs and tennis teams.

3. Supplement your income for ultimate peace-of-mind

Last, but certainly not least, finances will play a huge role into your retirement abroad plans. Even if you’ve saved enough for retirement and expect to be able to afford the cost of living when moving abroad, living the expat life can still turn out to be more expensive than planned. Having a secondary income is a great option to keep the finances topped up. Ideas for working abroad include teaching English, freelance writing, online coaching and managing rental properties.

Are you confident your retirement savings are being utilized to the fullest?  In today′s world, the importance of a well-executed retirement plan cannot be underestimated, so speaking with a retirement income specialist could open your eyes to fresh new ideas on how to make your savings go the extra mile abroad. Questions to ask your advisor should include:

  1. How could the tax situation in the country where I want to live affect my portfolio?
  2. Will I be able to afford my current lifestyle there on the retirement income I’m likely to have?
  3. What is the best way for me to manage my financial needs from afar?

Final Thoughts

Retiring overseas is a lifelong dream for many. If you’ve contributed enough to a retirement account for most of your working life, the dream can turn into reality.

Give yourself enough time to experience different seasons, get to know a few people, and see if your monthly budget will really work. And if in doubt, always speak to a financial advisor that specializes in retirement income solutions.