Retiring Abroad
Imagine walking on a Panamanian beach every day. Or tasting fresh pasta in your Italian neighborhood; Trattoria. Or even strolling ancient Spanish cobbled streets on your way to the market. Can senior living get any better than this?
For many seniors expat living is heaven on earth. Retiring abroad can be both romantic and fulfilling. But, before you say “yes!” to a different country code, first consider these factors:
Get your feet wet! Those two weeks you spent in a Honduras resort may well have been blissful. However, actually living in country will almost certainly be different. Before you move somewhere, rent a place in the area you think you want to live. Then, seriously live there for a few months. This way, you can experience daily life more closely.
Go shopping. Explore different housing options. Research medical care. Talk to the locals. Does it feel like a place that you’ll want to call home? How well do you cope with the cultural barriers now that you’re immersed? Are you willing to learn the language? You’ll need health insurance in your new country! It’s an important component of senior living. Medicare doesn’t typically cover you outside of the U.S. and most U.S. companies don’t provide coverage if you live abroad.
Fortunately, the quality of care is good in many countries. It’s usually less expensive than in the U.S. for example, if you have a permanent residence visa in Mexico, you can get coverage with prescription care for about $300 a year. Under a private plan in Costa Rica, you can expect to pay about $40 for an office visit. However, wait times, like with any nationalized system, can be long.
Some expats will return to the States using the hospital insurance part of Medicare. But premiums are 10% higher for each year you were not (but could have been) enrolled.The health insurer Cigna is now offering health, vision and dental coverage to retired workers formerly under their plans. The plan now covers expats in 200 countries, so that is something else to consider!
Consider taxes. Unfortunately, Uncle Sam’s tax arms extend everywhere in the world. So if you’re a U.S. citizen or resident alien, you have to file taxes whether you live in Belgium or Belize. Luckily, many countries won’t tax your Social Security.Some residents of other countries are taxed at reduced rates. Some are allowed to exempt certain kinds of income. It all really depends on the country. You may also be taxed (or exempt) on “certain items of income [you] receive from sources within foreign countries.” In this case, you’d have to file a foreign tax return in addition to a U.S. return.
Banking. Seniors retiring abroad should consider opening a bank account in that country. Do this to avoid currency exchange fees and ATM charges. Use this local account to pay bills.
Apply for a local Visa or MasterCard. You’ll avoid exchange rate differences and conversion fees. You can keep your banking account in the States open and have your Social Security check deposited there. This way you can use it to pay bills at home like your federal taxes. You can always transfer money from the U.S. into your account abroad if needs be.
Adjusting to Differences. Some of the most popular retirement abroad destinations are in Central American and Mexico. This is because the cost of living is low, the health care is inexpensive and the climate is more appealing. But with these amenities, there naturally come some cultural differences.Perhaps everything will move a little slower. If you’re used to keeping tight schedules, you’ll have to learn adjust. The sofa you were expecting to be delivered Monday maybe won’t show up until Thursday. It’s all part of a new pace of life.
…So if you’re ready to relax. Be prepared to relax your mind, not just your body. Not only this, but prepare to embrace the differences. Otherwise, your new life abroad could be more stressful than you thought! Retiring abroad can be a wonderful experience for many people but, before you make the leap, take a test drive. Follow the advice above in order to have a smoother ride, because, having a solid grasp on these details before you leave will make your senior living abroad stress free and rewarding!
http://seniorliving.org/travel/retiring-abroad/
Celeste Duckworth
