Going abroad for retirement has become increasingly popular for several reasons. First, retirees that go abroad can increase their purchasing power by moving to a country with a lower cost of living index.
Why you should rent before buying When moving abroad, buying a house imposes high risks for retirees. When you don’t know a culture or language, you might be surprised by cultural differences and language barriers that can significantly slow down building and buying processes.
Renting also offers the flexibility to explore your new home. Perhaps you’ve visited your dream destination multiple times for your annual holiday but living somewhere can feel different. It can be difficult to predict your exact needs and wants.
What about currency risk? When you are stilling receive income in dollars or euros in retirement, you might experience currency risks. Currency fluctuations against the dollar or euro can often be volatile. In addition, when retirees must exchange retirement income salary from dollars or euros to another currency, retirees can experience fluctuations in the cost of living. A volatile cost of living is not reliable and can cause stress for retirees, causing some retirees to choose a country with the same currency as their social security pays.
You can get tax breaks. Some countries go above and beyond by offering tax advantages or special discount schemes to foreign retirees. Most demand a guaranteed monthly income, such as Social Security or a pension, while others require property assets. For example, in Portugal, you are only required to have a minimal income. Some countries also offer visas when you decide to invest in a property in the designated country.
How much money do I need per month? Decide what you need per month. It’s essential to look at your previous expenses and evaluate the impact of your current spending when you retire abroad. For example, some countries are cheaper to live in, but maybe you wish to live your retirement in luxury, resulting in higher monthly costs than anticipated.
One of the most significant advantages of retiring abroad is a significantly lower cost of living. So if your retirement budget is limited, your best options for an excellent retirement are likely to be overseas.
Should I retire abroad? Research as much as you can in advance, but keep in mind that you might experience a learning curve. For example, creating a bank account may involve paperwork in the native language spoken and documentation of the domicile of your funds. Also, assessing the longevity of your investments for retirement can be difficult, but you can embrace the challenge if you have prepared sufficiently.