About 10,000 baby boomers retire every day . Yet, according to a study by Northwestern Mutual, 45% think there’s a chance that they’ll outlive their savings. For many, the answer to this problem is to continue working long past the day they turn 65. But there’s another option to consider; retiring abroad.
Retiring abroad, specifically in a country where the cost of living is lower than that of the US, allows you to maintain the lifestyle you have with a smaller budget in addition to experiencing the adventure of exploring a new country and its culture.
Retiring abroad still isn’t a walk in the park however, so here’s what you need to do to start planning:
Decide when to retire
Do you want to? Retiring past 65 out of choice isn’t abnormal. You might enjoy your job and want to further your career or maybe you enjoy the social interaction it provides. Many retirees cite that they feel bored. Do you have enough money? Try speaking with a financial adviser. There’s also the less expensive option of using a retirement calculator. How much do you have in your personal savings? Do you receive a pension? Does your employer have a 401k plan? How much do you expect from Social Security? According to AARP, the average Social Security Benefit in 2019 was $1,461 which considerably less than the average wage of most Americans.
Consider Investing Overseas
If you realize you may not have as a big of a budget as you planned for, consider investing overseas. Many choose to put all their eggs in one basket by investing only in the US. But with overseas investments you take on less risk because you’re gaining income in different currencies. And with more countries switching to free-market economies, their growth rates can be up to three times faster than developed market economies.
Choose which country is the best place to retire
There are many important factors to consider. What type of climate do you enjoy? Are you interested in learning about the native culture? Is there a thriving expat community? How do the country’s citizens generally treat foreigners? But the most important question of all, is: does the cost of living fit within your budget?
With a budget of $1,000-$1,500 per month consider:
- Indonesia Indonesia boasts the 2nd largest tropical forest in the world, coral reefs to go snorkeling in, and volcanoes to hike on.
- Bolivia Bolivia offers a temperature climate, indigenous folk music, and beautiful tours through its salt flats.
- Armenia In Armenia, one can enjoy the view of Mt. Ararat, travelling via rope-way, and the medieval architecture.
- Fiji retiring in Fiji means, romantic getaways in bungalows, fresh seafood, snorkeling and diving, and an abundance of local culture to take part in.
- Grenada In Grenada, forests, mountains and tranquil beaches contribute to amazing scenery. It’s also known for it’s chocolate, friendly locals, and exquisite carnivals.
- Laos Laos is mostly known for its many rivers and cave systems. And with 130 ethnic groups there’s a vast amount of culture to learn and absorb.
- Montenegro Montenegro offers some of the best hiking in all of Europe, picturesque villages, and affordable yachting on the Adriatic sea.
- Nepal In Nepal, one can hike the Annapurna Circuit, go on safaris, and visit the many Buddhist and Hindu temples.
- Nicaragua Known for its colonial architecture, wildlife, lakes and volcanoes, Nicaragua is a great place to dive and hike.
- Zimbabwe Zimbabwe boasts quality safaris, national parks, waterfalls, and plenty of archaeological ruins to explore.
With a budget of $2,000-$2,500 per month consider:
- Panama With its primary currency being the US dollar, Panama is very familiar for US retirees. It’s also known for its canal, the biodiversity within its islands, and excellent coffee.
- Costa Rica Costa Rica is known for its beaches, rivers, rain forest, exotic crops,and abundance of turtles.
- Mexico Mexico boasts amazing food, live music, and art, along with beautiful beaches and plenty of colonial towns to explore.
- Ecuador In Ecuador, you can soak in natural hot springs, ride the Devil’s Nose through the Andes, and sleep in an Amazon rainforest lodge.
- Malaysia Malaysia home to a vast number of caves, beaches, and islands. It’s also known for it’s tea, hiking, and chinatowns.
- Columbia Whale-watching, snorkeling, and journeying through the amazon are just a few of the many activities Columbia has to offer.
- Portugal In Portugal, you can take gondola rides, visit castles, whale-watch, ride through the Rio Douro Valley , and much more.
- Thailand Thailand boasts year-round sunshine, friendly people, and amazing food and culture.
- Spain In Spain, you can visit beautiful churches, delectable wine, plenty of history and art, as well as great food.
- Italy Italy is home to Vatican City, the Colosseum, amazing food, fashion, and extensive history.
With a budget of $2,500+:
You could live almost everywhere comfortably; Another option available for you would be to aim for a more luxurious lifestyle. Gated Communities in foreign countries not only have spectacular views and actives at lower prices, but also give you a chance to mingle with fellow expats while exploring the surrounding area. For example, Vista Encantada is a gated community consisting of lots, homes, and condos just north of Puerto Vallarta, Mexico. You can get to know your neighbors at the common area pool, BBQ’s, or the botanical gardens; Take a hike or morning walk through the jungles that surround both sides and enjoy spectacular ocean views; or pay a visit to Costa Nueva, the popular new tourist destination only a few minutes away with 5 diamond restaurants, hotels, and a magnificent golf course. At a place like Vista Encantada, you can retire in paradise. To reach out to them, check out their official website or Facebook.
Apply for Residency
If you’re planning to spend the rest of your retirement in one country you’ll need to apply for residency. Some countries are eager for overseas retirees and even offer benefits and special retiree visa programs. To qualify, they typically have you meet a minimum monthly income, a certain amount of money deposited in a local bank, or invest in a business.
Medicare doesn’t apply overseas and it’s unlikely your private insurance will as well. You’ll need to explore either getting an insurance plan in your new country, buying an international health insurance policy, or paying out-of-pocket for every medical expense. Paying out-of-pocket can sound expensive but the cost of medical care is different in every country. Depending on where you go, routine care can be significantly cheaper.
Tax and Legal Obligations
Retiring abroad can mean additional reporting and filing. And if you plan on working as a resident in another country, you should seek legal advice. If you’re planning on living in Portugal , Gil Figueira & Devillet Lima Advogados, or GFDL, is a Portuguese law firm that focuses on representing foreign clients in Portuguese speaking jurisdictions as well as Portuguese clients worldwide. They’re experienced in real estate, construction & private equity,
Lastly, there’s the question of how to receive your mail. Whether you’re planning to travel to many different countries or retiring abroad in one country, this is extremely important. Bank Statements, IRS notices, and Voter Registration all require a mailing address. The solution to this problem is to get a virtual mailbox. A virtual mailbox is a service that offers a permanent US street address. With US Global Mail, the exterior of your mail is scanned and uploaded as soon as it arrives. Then, you decide whether to have it opened and scanned, shredded, or forwarded to a different address. You can have access to your mail within minutes no matter where you are.