3 Things you need to know before packing your bags
Have you always dreamed of retiring abroad? Do the white sand beaches of an island nation or cobblestone streets of a foreign city call your name every night? If they do, you are not alone. Overseas retirement has grown by 17% between 2010 and 2015. Many people find that it is an excellent way to spend their retirement, especially if the nation has a lower cost of living than the United States. That doesn’t mean you should just pack your bags and take off, though. Retiring abroad can be complicated, so make sure you have your ducks in a row before buying your tickets.
Renting vs. Buying Property in a Foreign Country
Before you pack your bags and skip the country, you’ll want to consider what living situation will work best for you. According to experts, it is best to rent a home in a foreign country, even if you plan to reside there full-time.
Buying property in another country can be complicated if you are not a citizen, and in most cases, you’ll need to pay cash. It is financially risky to tie up a large sum of money in a home outside of the United States if you are not a citizen of that country, advise financial planners. Renting is especially beneficial if you plan to return stateside at some point.
Don’t Forget Your Taxes
Before you head for the border, make sure you understand the ramifications of living abroad. The United States is one of the few countries that base their taxation on citizenship rather than residency. That means, even if you are living in another country, you may still owe Uncle Sam money each year. Work with a certified public accountant who has experience with expatriate tax issues. You’ll want to start early with a CPA, so you understand what you’ll owe each year and how it will impact your retirement budget.
Remember, you may also need to pay taxes in the country you are residing in, too. This issue can change your budget, so it is best to prepare in advance.
Pick the Right Cash Situation
Advisers have long suggested expatriates keep their money in United States bank accounts. While you may want to open a local account for day-to-day spending, the bulk of your money should remain in a US account, according to experts well-versed in banking issues. Because US banks are insured, you can feel secure that your money will be safe. You should have no problem accessing ATMs in most countries, but do be mindful of conversion fees and rates.
Do your due diligence and research the economy and traditions of the nation you plan on moving to. A cash-only society means you’ll be better off opening a small account in your new country of residence. If the nation accepts credit cards regularly, it may be wise to open a credit card account that does not charge additional fees for international usage.
Look into Visa Requirements
You can only be a tourist for so long. Many countries require visas if you plan to stay for more than 90 days, and the process can be complicated. Speak with an immigration lawyer to understand what type of visa you may qualify for and the best way to go about obtaining it. A great deal of information is available online, but an immigration lawyer can walk you through the process more efficiently.
Retiring abroad might be your dream, and it’s a great dream, but being prepared for the pitfalls of a complicated move is necessary. It is the only way to ensure everything will go smoothly as you pack up, and once you are settled into your new home.
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