How to retire abroad
The lure of low costs, better weather and adventure have many people considering retiring abroad. Retirement overseas can be an exciting new chapter in your life, as well as an overwhelming one. Here are some top tips for planning your retirement overseas.
Do you love nothing more than a quiet beach holiday, but in everyday life expect access to everything at your fingertips, like shopping malls, theatres, restaurants and bars? If so, moving to a small idyllic beach town where there is little to do other than swing in a hammock probably won’t be the way you want to spend your retirement.
Many people fall in love with a place they have visited once or twice on holiday, but taking a vacation is very different from living there full time.
Think long and hard about who you are, what you can and can’t live without and what makes you comfortable personally. A complete tree or sea change might sound like a wonderful idea but think hard whether it is really for you and choose where to retire wisely.
Understand Pension, Tax and Other Money Matters
The country you choose to live in could affect your pension pay out, so it’s a good idea to know what to expect. Countries in the European Economic Area (EEA) benefit from an agreement where your state pension rises with inflation. But where there is no agreement, such as Australia and Canada, your state pension will be frozen and won’t increase.
Becoming a resident of one country while still having financial commitments at home can cause tax complications, and some people end up paying twice – once in the UK and once in their new country, so get expert advice. Also consider the impact of foreign exchange rates on your money.
Can you afford it?
Many countries have a cheaper cost of living than the UK when you visit on holiday, like the price of food, drinks and entertainment.
But it’s not just these expenses you need to consider. Put together a budget listing the main things you spend money on and take into account certain essentials may cost more abroad.
Your budget should include everything you pay for at home, plus things like increased electrical costs in a hotter/colder climate, potentially higher gasoline costs, cost of public transport, and any extra expenses you might encounter in your new country such as waste disposal costs.
Understand the healthcare in the country you are thinking of moving to. For example, EU countries are free to establish their own rules on entitlement to benefits and services, and national healthcare systems differ greatly within Europe. If you apply for medical care in your new country, you probably won’t be entitled to exactly the same services for the same price as in your country of origin.
Consider taking out private medical cover if you want to ensure you receive the best care possible.