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Five things to consider when retiring abroad

Updated 14 Feb 2020

In search of a more relaxed lifestyle, sunny skies and a lower cost of living, many retirees are now looking abroad. But retiring overseas requires careful planning and there are many things to consider if wanting to ensure that the move is a successful one. 

Here are five important factors to consider when retiring abroad:

1) Visa requirements

Regulations vary with regards to retirement abroad and each country differs when it comes to allowing foreigners to live out their golden years on their shores. Expats therefore need to research carefully what the visa requirements for their new destination are before making the big move.

Some countries encourage foreigners to settle there by offering special retirement visas. These include Malaysia, Australia, Mexico and Ireland, among many others. The requirements for these differ, but are usually based on an expats’ financial means and proof of adequate funds to retire in the destination. Other factors may include an expat’s health and language ability, and most of these visas place restrictions on employment. 

2) Healthcare

Having access to affordable high-quality healthcare is paramount when considering a move abroad. It’s imperative for retirees to have comprehensive health insurance to ensure that they’re covered for any eventuality.

Some expats may be covered under local healthcare, such as in Costa Rica and Mexico, where foreigners are allowed to buy into their national health plans if they are there on a retirement visa. However, the standards of healthcare might be well below what an expat is used to and they may need to travel home or elsewhere for serious medical attention.

If requiring chronic medication, expats should check whether it is easily available in their destination or whether it can easily be imported.

Other health considerations include the climate, air pollution, humidity and altitude – especially if having any preconditions that may be adversely affected by any of these.

3) Financial management

Retirees often find that their pensions go a lot further abroad, allowing them to live a far more luxurious life than they might have back home. The lower costs also mean for some that they can retire earlier than they expected. But managing one’s finances when living abroad can be complicated at the best of times, and when one is retired this could add an extra element of difficulty. 

While the cost of living might be lower, tight restrictions on money transfers and taxes may affect this. Some governments also place restrictions on paying pensions to non-residents, so expats who have a government pension from their home country need to research the viability of receiving their pension if living abroad. In other cases, the cost of living may be far higher than back home, and this might make a move abroad financially unviable.

Retirees should consider whether it’s worth opening a local bank account, and if needing to transfer money from abroad, they need to keep an eye on exchange rate fluctuations.

Taxes are another important financial consideration. Depending on your home country and any tax agreements they have with your new country, expat retirees may still be liable for paying taxes back home as well as in their new country. It’s a good idea to speak with a tax consultant who is familiar with such matters early on in the planning stages of a move.

4) Culture shock

Moving to a new country may come with a fair share of culture shock, which may require some adjustment. While the new customs and traditions might have been exciting and fascinating when visiting there on holiday, these may end up becoming an annoyance further down the line if having to deal with them on a permanent basis. 

Expats need to research the local customs and laws carefully before settling in a country as what might be legal in one country may be illegal or highly regulated in another. Depending on one’s lifestyle and preferences, some questions would be: Does the country have freedom of religion? Do I need to learn the local language? Is the local language easy to learn? Are there restrictions on personal freedoms? Is homosexuality legal? Is the consumption of alcohol legal? Am I able to purchase property?

Many expat retirees get by quite well without ever learning the local language. In countries such as Spain, for example, this is often because they live in quite insular expat groups, where exposure to the local language and culture is not an issue. However, other destinations might not be as easy to integrate into without a firm grasp of the language. Expats should at least attempt to learn enough of the language for day-to-day interactions like going to the shops or visiting a doctor.

5) Day-to-day living

Retirees need to consider the general livability of a destination. There are some things that they may not be able to do without and those that are certainly important to make life in a new home more comfortable – having access to reliable electricity and water supply, getting internet, and setting up basic utilities, a phone account and cable television. 

Transport is another important matter that can add to the comfort or frustrations of your new destination. Retirees will need to consider whether they can import their own vehicle or will need to purchase a new one, or whether the local public transport is adequate for their needs.

From their favourite foods to clothing labels, with global expansion of shopping chains and brands, many expats are now able to enjoy all the familiar luxuries they had back home, making the transition easier to manage. But in some destinations, there may be little to no access to these typically Western delights, and expats may have to get used to life without their favourite maple syrup or preferred brand of shampoo.

Expats may find that it is often more affordable to hire household help and home carers in their new country. Having someone to do the laundry, cook and clean can certainly go a long way to making life as a retiree much more comfortable.

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