expat

7 Smart Reasons to Retire Abroad

Nick Wharton — Tue, 05 Dec 2017 09:30:10 +0000

For some people retirement is a time to slow down, take stock, and simply enjoy not having to suffer the nine-to-five grind every day. For others it's an opportunity to fulfill long held ambitions and head overseas on a great adventure. If you're caught in two minds about what sort of life you want when you wave goodbye to your work commitments, here are seven reasons to retire abroad. (See also: 9 Things to Know Before Retiring Abroad)

1. Reduced cost of living

The U.S. is ranked by Numbeo.com as one of the top 25 most expensive countries in the world in terms of cost of living. That means there is a huge number of alternative countries where you could potentially reduce your living costs, and in many instances quite drastically. A 2015 report by the U.S. Government Accountability Office says that "most households approaching retirement have low savings," meaning that many Americans could struggle in retirement.

Perhaps you're among those concerned about the level of your savings as you head into retirement. But even if you're not, moving abroad to a country with a lower cost of living could be a good way to make your savings stretch. For as little as $1,000 a month you could afford a comfortable retirement in a number of exciting countries. (See also: 5 Countries Where You Can Retire for $1,000 a Month)

2. Higher standard of living

Along with a decrease in expenses, moving abroad could also bring you a higher standard of living than you'd achieve by staying in the U.S. Perhaps you dream of living by the beach, having help around the house, pursuing a pricey hobby, or being able to afford private nursing as you grow older. These may not necessarily be things you'd be able to afford at home, but could well be within your reach by moving abroad.

Getting more for less is one of the main reasons many retirees decide to take the plunge and emigrate. Depending on the country you choose, things you might otherwise consider to be luxuries could become part of your everyday life. (See also: Retire for Half the Cost in These 5 Countries)

As an example, I'm currently living in Koh Samui, Thailand. Just the other day I spent $10 on a wonderful one-hour massage on the beach and I had a delicious organic meal at a beautiful yoga retreat for just $11. These types of experiences would have cost me a lot more in the U.S.

3. Better weather

A driving factor for a lot of retirees who decide to settle abroad is the promise of better weather in other countries. For many, people a cold climate and dreary weather are harder to cope with as they get older. There are plenty of places with tropical climates where you can expect blue skies and consistent heat, regardless of the month.

Being able to say goodbye to long, hard winters and swap heavy overcoats for shorts and T-shirts is a fantasy that appeals to many of us. More sunshine doesn't just mean a permanent tan; it can also have a positive effect on your quality of life by allowing you to do more outdoor activities throughout the year. (See also: How to Choose the Perfect Country to Retire In)

4. Cheaper health care

As we get older, the price and quality of medical services available to us naturally becomes a bigger concern. The cost of health care in the U.S. can be so expensive, it can drive you into medical debt. Many overseas retirement hot spots have excellent, affordable health care systems that are easily accessible. There are various options for how to pay for health care when you're abroad, and, depending on your circumstances, each has benefits and drawbacks.

An international medical insurance policy is often the safest bet, as it provides comprehensive international coverage. This is ideal if you plan to travel. However, be aware that these policies often don't include treatments back in the U.S. so it's unlikely you'll be covered during visits home. Single country medical policies are available for if you're planning on staying solely in your chosen country and not traveling abroad.

5. To avoid regrets

Nobody wants to look back on their life and have regrets over the things they wish they had done, but never managed to. As a retiree you've most likely worked hard over the course of your career and potentially even sacrificed some of the aspirations that you had when you were younger.

It's never too late to build the life of your dreams, and rest assured you won't be alone in heading overseas to do just that. Don't let fear of the unknown stop you from fulfilling those objectives in your golden years. (See also: 6 Ways Travel in Retirement Keeps You Young)

6. To slow down the aging process

Retirement abroad is the perfect time to welcome new challenges and take advantage of the exciting opportunities that come your way. The Alzheimer's Association suggests that mental stimulation can help stave off mental decline associated with aging and help build new brain cells in the process. Learning about a new culture, exposing yourself to different experiences, and taking up a new language are all great ways to exercise the brain. (See also: 5 Ways Science Says Travel is Good For Your Health)

7. For the adventure

No one knows exactly how retiring abroad will turn out, but one thing is for sure: It will be a great adventure. It will give you the opportunity to start afresh and live the life that you've always dreamed of. With all of the free time you'll have, the opportunities to travel, explore, and meet new people from a new culture are endless.

Experience the different cuisine, take in unfamiliar scenery, and welcome the chances that arise with open arms. You might find your entire outlook on life changed, your opinions challenged, and preconceptions dashed. Retiring abroad could be the best thing you ever do. (See also: 5 Countries That Welcome American Retirees)

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This article is from Nick Wharton of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 Countries That Welcome American Retirees

Nick Wharton — Wed, 08 Feb 2017 11:00:15 +0000

Retiring abroad can be a great way to secure a fun and affordable lifestyle for years to come. Of course, you'll need to plan out some important logistics if you think retiring overseas might be right for you. It helps that some countries have very welcoming policies for U.S. retirees who are looking to relocate.

Some things to consider when choosing a location include residency requirements, taxes, property ownership laws, and health care options. You'll also want to choose a place that allows you to do the activities you're interested in and offers you the quality of life you're looking for. (See also: Retire for Half the Cost in These 5 Countries)

Here are five excellent countries for Americans to retire in.

1. Mexico

Mexico has many advantages going for it, which might explain why there are already a million U.S. citizens retired there. In fact, it has the largest established American expat community of anywhere in the world.

Its proximity to the United States makes it easy to visit home. There's no shortage of direct flights to the U.S., and airfare is generally affordable. You can enter the country on a tourist visa that lasts for six months and then later apply for a temporary or permanent retiree visa. You will have to meet certain income or asset requirements to get one of these visas.

Mexico offers a vibrant culture, sun-soaked beaches, scenic highlands, delicious cuisine, and beautiful colonial architecture that all contribute to an enjoyable retirement here. Depending on what kind of community and lifestyle you choose, Mexico's cost of living can be a fraction of that north of the border.

While relocating to Mexico is the perfect opportunity to brush up on your Spanish skills, you should also know that there are many English speakers that can help make your transition as smooth as possible.

2. Cambodia

If you're trying to get the most bang for your buck, you may want to look to Cambodia, which has the best cost of living for U.S. expats, according to InternationalLiving.com. You can find a rental apartment for as little as $250 a month and eat out at a restaurant for under $5.

The weather is warm year-round and there is an abundance of cultural sites to visit, such as the temples of Angkor Wat located on the site of the ancient capital of the Khmer Empire.

Some challenges might include learning the local language, although there is a significant expat community and many locals speak English as well.

And while buying a condo above the ground floor is much easier for expats these days, thanks to a 2010 law, foreigners looking to buy land will encounter more restrictions. If you specifically want to buy property abroad you might be better off looking elsewhere.

3. Spain

If you want a European lifestyle without the hefty price tag, Spain may be the perfect option for you. With the greenback doing well, European destinations are becoming more affordable for retirees with dollars. Rent is variable but you can find a place for as little as $500, and a dollar can often buy you a beer at a local bar.

Spain offers a temperate Mediterranean climate in the winter, although summer can be hot, with temperatures rising to over 100 degrees Fahrenheit.

To move to Spain permanently, you'll need a residence visa for retirees, which requires you have a certain level of income, among other things. (See related: Don't Let These Expenses Spoil Your Retirement Abroad)

4. Colombia

Colombia is an attractive place for retirees for a few reasons, including the warm climate and affordable high-quality health care.

Plus, there are many direct flights to and from the U.S. for reasonable fares. For instance, you can find a round-trip ticket from Medellín to the states for as little as $350, which is less than some domestic tickets can cost.

Medellin has changed dramatically since it was dubbed the most dangerous city on earth in the early 1990s. The colonial town is now charming, with parks, museums, and plenty of other cultural activities to keep retirees busy and entertained.

5. South Africa

South Africa is a country of stunning beauty and diversity for retirees, with both an expansive coast and mountainous landscape offering many opportunities for outdoor recreation. The country's crown jewel is Cape Town, but Johannesburg is also a cosmopolitan city with many cultural offerings.

Rural areas offer ample opportunities to see exotic wildlife and experience diverse ecosystems. The temperate weather is another great draw for people who are considering moving here.

The cost of living is attractive, too. According to Numbeo, consumer prices are 44% lower in South Africa than in the United States and rent is nearly 50% less expensive, so your retirement funds will go much further here.

While crime is still high in the country, if you stick to the right neighborhoods and take precautions, you can stay safer. English is the language used for business, politics and the media, so it's easy enough for Americans to get around.

There are two visa options: a retired person's permit, available on both a temporary (four-year) and permanent basis; and an independent financial person's permit. The main qualifying criteria for both of these options is that the applicant is able to support themselves financially.

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This article is from Nick Wharton of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

4 Keys to an Early Retirement

Nick Wharton — Fri, 03 Feb 2017 10:00:09 +0000

Does it seem like retirement can't come soon enough? Are you tired of feeling like you're wasting time at a job you no longer enjoy, daydreaming about the day you won't have to come in anymore?

The good news is there are several steps that you can take if retiring early is your goal. Retiring early will mean setting clear priorities and goals that you can meet, but it doesn't have to be out of reach. Consider these four tips to get there faster. (See also: 9 Things People Who Retire Early Do)

1. Slash Costs Now

It's easy to go on autopilot with monthly costs, but they can add up fast, especially if you're spending more than you should. By switching providers for home or car insurance, Internet, phone, and cable TV, you could save thousands a year. In fact, do you even need cable TV? What about that gym membership — are you using it enough to justify the cost?

Could you trim expenses even further by downsizing your home or getting by with one car? Leave no monthly cost unexamined.

While you're at it, look at the fees you're paying on your investments. Because of compounding, investment fees that seem small can eat a big chunk out of your retirement savings over time.

All of these cost savings won't be enough on their own to ensure your early retirement, but over the course of a few years they can add up and enable you to retire comfortably earlier than you may have thought. (See also: 14 Things to Do to Retire Early)

2. Look for Tax Advantages

When planning for retirement, it's important to consider the taxes you will have to pay once you stop working. While you can contribute now to 401K or regular IRA accounts using pretax income, you'll have to pay taxes on the distributions once you start to draw down the accounts.

On the other hand, you contribute to a Roth IRA with money that's already been taxed, but then it grows tax-free and you'll pay no taxes when you withdraw the money. Often it's good to have a combination of both types of retirement accounts. A financial adviser can help you decide. But keep in mind that withdrawing from either of these accounts before you hit age 59-1/2 usually incurs a tax penalty.

Taxes on Social Security are another expense to keep in mind for when you hit official retirement age. Social Security benefits may be taxed at the federal level, depending on what your total income is. But the IRS won't tax more than 85% of your benefits. Thirteen states tax Social Security benefits, while other states have low or no taxes for retirees.

3. Retire Abroad Full Time

Retiring early means figuring out a way to live on what you save during a shortened working career. You can lower your needs drastically by changing your country code.

If you've been working and saving in U.S. dollars, you can make that money go much further in a country where the cost of living is lower than in the United States. Many destinations in Central and South America, as well as many parts of Asia and even Europe, are much less expensive for Americans to retire to — and if you're looking for a warmer climate, you can find that too.

Of course, there are some logistics that you should take into consideration when retiring abroad.

Taxes

The U.S. taxes citizens or resident aliens living abroad on worldwide income, including Social Security, other retirement income and any earnings you may get from working in your new country. However, you may be eligible for the Foreign Earned Income Exclusion, which allows you to exclude foreign earnings — up to a certain amount — from your taxable income. The exclusion is adjusted annually for inflation. For 2017 it is $102,100.

You may also be subject to income taxes in the country where you retire, though many countries have treaties with the U.S. that make sure you are not double taxed. You'll need to research local tax laws to make sure you're in compliance.

Logistics

There are a lot of logistics involved in moving to a foreign country. You'll need to research the appropriate visa for the country you'll be living in. Many desirable locations for Americans have special visas for retirees. Generally, you'll need to show you have a certain amount of retirement income and you will not be allowed to work for a local employer on these visas.

Think too about whether you want to sell your home in the U.S. You may want to get rid of furniture and other belongings as well, though retirement havens such as Panama and Nicaragua allow you to import a certain amount of household goods duty-free.

Banking is another consideration. Many expats continue to hold a U.S. bank account and to transfer money between it and an account in the country where they live. If you've got a U.S. account it's also a good idea to have a U.S. travel credit card that charges no foreign transaction fees. A U.S. card can help you purchase from U.S. websites more easily and comes in handy during trips back home.

Health

In some countries, quality health care is so cheap that expats choose to pay out of pocket for treatment and medications. In other cases, you will need to research local health insurance options or make sure your U.S. insurance covers care abroad. Medicare is not available for health care outside of the U.S.

Other expats can be a great resource as you try to find doctors that speak English and have a good reputation.

The U.S. State Department has more resources for planning to retire abroad.

4. Move Abroad Part Time

You can also considerably lower your retirement expenses just by spending a portion of the year abroad, without the commitment of leaving the U.S. entirely.

Different people choose to set up this arrangement differently. Some will return to the same place every year, while others may prefer to try out somewhere new.

Taxes

As with moving abroad full time, you will still be responsible for paying U.S. income taxes on worldwide income, and you may be subject to local taxes as well. Many tax breaks in the U.S. and abroad are dependent on how many days per year you spend in the foreign country, so you'll need to research those requirements.

Logistics

The most important consideration when you'll be spending your time in multiple locations is your accommodations. Will you rent your home while you're away? Will you hire a property manager to make sure that everything is running smoothly in your absence?

Consider home or apartment exchanges if you are going to be overseas for a shorter period of time.

Health

For health insurance, you may want to consider purchasing travel insurance for the part of the year that you'll be out of the country to supplement your plan back home.

Early retirement doesn't have to be an unattainable goal. Focus on setting your priorities and using creative thinking to be able to retire when you want.

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This article is from Nick Wharton of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 Incredible Places to Retire Abroad That Anyone Can Afford

Chris McMurphy — Mon, 19 May 2014 08:12:20 +0000

The idea of retiring to some far-flung locale replete with warm weather, ample shoreline, and a favorable exchange rate is an attractive notion to many people. Indeed, searching for the hot new country in which to buy retirement property has become something of a sport for many folks in their golden years. It seems that on an almost annual basis, some previously unheralded nation pops up that looks like an attractive option to relocate to. And with the economy squeezing the retirement dollar of a large portion of the U.S. middle-class, there are many who simply have no other option than to retire in another country.

So for those intrepid retirees looking to plant the flag abroad, here are five attractive nations in which to do so. (See also: Best Travel Rewards Credit Cards)

Turkey

This picturesque Mediterranean country sits on the doorstep to Asia and provides many of the features expats look for in a new home, namely a rich culture, beautiful beaches, stunning landscapes, and that aforementioned attractive exchange rate. The Turkish currency remains the lira, and those from the U.S. can enjoy a nearly 2-1 exchange rate. Some estimates even place the cost of living for those from the U.S. at one-third of what it is back home. (See also: 5 Amazing, Cheap Places to Live as an Expat)

This translates into low prices on real estate as well. Even in the capital city of Istanbul, it is possible to find an apartment for sale between $20,000-$40,000 and a house for between $100,000-$200,000 dollars. Prices are often even less in the smaller towns and villages that dot Turkey's landscape. So between the cost of living, a favorable exchange rate, and bargain real estate prices, many retirees should be able to purchase a home in Turkey.

Ecuador

For the last few years, Panama has been on many older folks' radar as a retirement destination. But what it has in terms of natural beauty and a low cost of living is at least matched in Ecuador. This South American gem offers everything from volcanoes and jungles to beaches and even the Galapagos Islands (although you can't actually retire there). From the capital city of Quito to the expansive beaches of Guayaquil, there are a number of prime spots in which to find retirement property in this little country.

As for the economy, Ecuador adopted the U.S. dollar as its official currency, so expats needn't worry about currency exchange issues. And with estimates putting Ecuador's inflation below 4%, things should remain stable for the foreseeable future. Those who do relocate here will find that they can live on a pittance, often finding that their budget doesn't need to exceed $300-$400 per week.

Thailand

Those who don't mind a bit of a jaunt to their retirement destination (Thailand is about an 18-hour flight from New York) can choose this country to kick back in. Visitors from Europe and Australia have long touted the affordability of this Southeast Asian hotspot, and it's about time Americans learned about these virtues, too. A person (or even a couple) can get by on a budget of about $1,800 per month including rent, and that even allows for splurging and the occasional beach getaway.

There are a number of destinations within Thailand, but most folks choose to hang their hats in either the capital city of Bangkok or the more relaxed environs of Chiang Mi. In Bangkok, residents can take advantage of rich street food for less than $1 or dine at many four-star restaurants even while adhering to a strict budget. Those with medical needs can rest easy knowing that the country has a superb health care system that is also inexpensive, and folks here can see a specialist for about $50 per visit. On the other hand, Chiang Mai is only a few hours drive from the capital, but it may as well be a different world. Noted for its lush mountainous landscapes peppered with the occasional Buddhist temple, residents can take advantage of the temperate climate and laid-back lifestyle while still enjoying cheap prices.

Colombia

Right next door to Ecuador sits this lush Caribbean country, and more and more foreigners are discovering it each and every year. That's because Colombia no longer enjoys the reputation for violence that plagued it in decades past. That's good news for tourists and retirees alike. Those who want a second home here have many attractive real estate options to choose from. And considering the average monthly salary in the country is around US $300, expats can easily get by on less than $2,000 per month and live high on the hog in doing so.

Malaysia

If Thailand doesn't strike a chord, retirees can opt for another Southeast Asian expat haven — Malaysia. Consistently ranked in International Living's annual Global Retirement Index, this country offers the affordability of Thailand (folks can live a pseudo-luxurious lifestyle for around $1,700 per month) as well as the stellar health care system. And since the most of the country's doctors have studied in Europe, England, or the States, it's no problem finding an English-speaking physician. Emigres can even import their vehicles and furniture into the country duty free. One other incentive to move here is called Malaysia My Second Home, a 10-year resident visa that can be acquired by making a down payment and proving a certain income per month.

Have you considering retiring abroad? Where?

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This article is from Chris McMurphy of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 Amazing, Cheap Places to Live as an Expat

Nicholas Pell — Thu, 27 Feb 2014 11:24:27 +0000

After you finish college and work for a couple years but before you settle down and have kids, you might succumb to the wanderlust that makes people go expat. Maybe you have friends who have gone abroad. Maybe you were just too busy to do any traveling in college. No matter what the reason, living abroad is an amazing experience. Far more than just tourism, living abroad allows you to immerse yourself in another culture while also getting the keen view of an outsider. It can also make you highly attractive to prospective employers when you return to the states.

But where should you go? Here are five amazing places where you can live on the cheap as an American abroad. (See also: International Cities That Boost Your Standard of Living for Less)

1. Chile

Chile is quickly becoming one of the hot spots for Americans living abroad. It offers a semi-tropical climate not unlike that of Los Angeles, but at a fraction of the price. It's also one of the few countries in the world where personal liberty is on the increase, rather than the decline. The BBC called it one of Latin America's most stable and prosperous countries. What's more, there are communities and communes of expat Americans cropping up down there as we speak. Bottom line? You can live in Chile for less than $1,000 per month, a bargain compared to basically any American city. (See also: Best Travel Reward Credit Cards)

2. Thailand

Thailand might be the Chile of the east (or is Chile the Thailand of South America?). It's a reasonably stable and prosperous country with a low cost of living. Your grocery bill can come in at under $50 a month… if you're not one of those people who just ends up eating out at every single meal. What's more, medical care is modern, professional, and very inexpensive: Many expats give up their health insurance when living in Thailand, because routine medical care costs so little. It was also ranked as one of the best countries for foreign workers by expats.

3. Argentina

Before there was Chile, Argentina was the hot place for young expats to get their wanderlust out. The reason being, the American dollar goes a long way there. Thus, if you're one of the increasing numbers of Americans who work from home, and you will continue to get paid in American dollars, you can live the high life in Argentina. For people wanting to live in Europe without having to pay the high European cost of living, Argentina is also the place. It's got the feel of Spain, Portugal, France, or Italy, but with rents half those of the United States. One thing you should know before you pack up, however; if you live in Buenos Aires, your high school Spanish isn't going to help much, so study the local dialect before you take off. (See also: How to Make Money While You Travel)

4. China

China is another great place to live and work in Asia for Americans. There's plenty of work to be had teaching English, both as a tutor and as a teacher. Even in the larger cities, housing is affordable by American standards. Heading out to dinner is going to cost you about a third what it does in the United States. Get ready for a true cultural immersion, as there are very few English speakers comparatively, and Chinese is a very difficult language to acquire later in life, as it is tonal. (See also: Ways to Learn a Language)

5. Bahrain

Here's one you'd probably never think of. However, it came in second, behind Thailand, in the HSBC poll of the best place for expats to live and work abroad. Here's something you probably didn't know: Bahrain is one of the most Westernized countries in the Arab world. This makes it the ideal destination for Americans and other Westerners who want to observe an Arab country up close. There are also copious jobs in the IT and technology sector, so if that's your gig, start looking for one in Bahrain. The cost of living isn't quite as radically lower as in some of the other choices, but it is cheaper than the United States.

Are you an expat living abroad — if so, where? If you're considering living abroad, where have to considered living?

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This article is from Nicholas Pell of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread: