For some people, retirement is a time for new beginnings and doing things they always wished they could do – like living somewhere new.
Back in November, we offered suggestions for finding a new place in the U.S. to call home during retirement. But some retirees’ desire for something completely new finds them craving something a bit more exotic – namely a retirement destination in another country.
There are as many reasons to retire abroad as there are retirees: better climate, a lower cost of living or a desire to live somewhere you’ve always dreamed about. Gabrielle Redford, editorial projects manager for AARP The Magazine, has tackled the topic extensively, and says the key to successfully retiring abroad is choosing a destination based on your personal needs and wants.
Best Destinations for Retiring Abroad
In a recent interview with us, Redford says, “If you’re simply looking to save money, you can definitely retire a lot less expensively in another country – specifically countries in Latin America.”
Redford points out that Panama, Mexico, Portugal, Spain and Belize are all great countries for those looking to retire abroad, thanks to quality health care, thriving expat scenes and good weather. She also says that Buenos Aires, Argentina, and Granada, Nicaragua, are great cities for retirees.
Kiplinger also lists its picks for best places to retire abroad, including: Colombia (great hospitals and low cost of living); Croatia (great climate and low cost of living); Malaysia (affordable, quality healthcare and a third-place ranking in the Global Retirement Index for living costs); and Ireland (low cost of living and highly affordable real estate).
Save Money on Health Care
Moving to another country doesn’t necessarily mean losing access to decent health care – and sometimes it’s cheaper than what you’d find in the States.
Bankrate notes that in the U.S., the typical couple with average drug expenses would need roughly $270,000 to cover medical costs throughout retirement. But MSN Money reveals that while your health insurance won’t cover you once you leave the U.S., some popular non-U.S. retirement destinations offer extremely affordable options. In fact, the site points out, some countries offer health care for as low as $100 a month.
“Health care in other countries is surprisingly good, for the most part,” Redford says. “You just have to be a little bit savvy when looking. It’s definitely something you’ll want to investigate ahead of time.”
Keep Your Taxes in Mind
You’ll also want to make sure you’re aware of the tax implications of moving abroad. Redford notes that the U.S. is one of the few countries that taxes its citizens no matter where in the world they live, and that you’ll be subject to U.S. tax laws as long as you’re a U.S. citizen. However, she notes, there can be some tax breaks.
“For instance, if you move and do some consulting work, then there are some exemptions from the IRS for money that you earn abroad,” she says. “But it’s complicated and will depend on your individual circumstances, so it’s best to consult a tax attorney.”
Give Your New Destination a Test Run
Before you sell your home and pack your belongings, Redford suggests making sure your new destination is a good fit. She points out that you never know when certain aspects of a country – like an unreliable transportation system or a language barrier – will be more of a nuisance than you’d expected.
“Spend a month there, or a couple of months if you can,” she says. “You really need to find out if it’s someplace you can live for a long period of time.”
Still not sure what country is right for your retirement? The AARP offers an Expat Starter Kit that offers guidance from the State Department and the IRS, as well as links to other organizations that can help you choose the right retirement destination for you.
Have you have considered retiring abroad? What destinations look the most appealing to you?