ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Five Important Considerations in Choosing International Retirement Destinations

Updated on May 14, 2012

Having a second home, vacation retreat, or retiring to another country is alluring for a variety of reasons. To name a few of these attractive considerations:

  • A lower cost of living;
  • Advantageous exchange rates;
  • Climate;
  • Cultural experiences; and
  • Adventure

A couple of years ago we vacationed in Belize. While there, we had the privilege of staying with a couple from the U.S. who had sold everything they owned to buy their "dream home" in this country. The husband was clearly enjoying his "ideal" retirement, but the wife was terribly lonely, mostly missing her grown daughters and grandchildren.

Therefore, if you are married, it seems very logical that first you both must answer the question of "Is this the right move for both of us?" before making such a drastic move.

However, if after much research and soul searching, you've decided on a specific glamorous locale and found it to be the ideal place to spend your golden years -- then, you will need to dig deeper into the realities. If this is your heart's desire, there are many things to consider. It's a lot more than finding the perfect spot, ordering the language tapes, and breaking the news to your children, friends, and other family members.

Now, it the time to get down to the essentials of truly retiring abroad. The following five key considerations, are but a few of the things you need to give serious thought to:

International Moving
International Moving

Renting Compared to Buying

Experts counsel that the newly internationally relocated spend at least one year renting before on taking the enormous step of buy a home. Spending time in a rental can give you perspective. You'll have time to discover what neighborhoods are the greatest and which are the pits. It's also easier to beat a fast flight back to the United States, if you find moving there was a big mistake.

Home ownership in another country can be a complicated thing. Some countries won't allow foreigners to purchase property. Others may, but some Americans have been cheated. They found that their property rights weren't what they were led to believe they were. Another concern, is that in the end, your heirs will have to worry about the disposal of the property or finding a way to manage it from abroad. Additionally, in some countries, the rights of heirs do not exist if the property is foreign owned.

Do Your Financial Homework!
Do Your Financial Homework!

Estate Issues

Regardless of whether you move to a foreign country forever, or just for a few years --- be sure to have your estate in order prior to the move. Estate law varies by country, so once there, also have a local attorney, as well as your American lawyer, review your options.

Just as you need to attend to this same reality here in the states, it is even more important if you move overseas. This isn't a do-it-yourself topic, get professional advice.

Popular International Retirement Destinations

With fears of extreme poverty in retirement years, many Americans are considering international retirement destinations. In fact, over one million U.S. retirees are already living in other countries.

The attraction to these international destinations are obvious, with retirees seeking:

  • Lower cost of living
  • Hopes for a more adventuresome life
  • A better climate
  • Stretching a retirement income to include some sense of luxury

Some of the more popular international retirement destinations are:

  • Asia
  • Australia
  • Costa Rica
  • Ecuador
  • France
  • Malta
  • Malaysia
  • Mexico
  • Panama
  • South Africa
  • Spain
  • Thailand
  • Venezuela

Some of these international retirement destinations are being sweetened by the government of those countries, offering special deals with respect to visas, resident status, tax reductions or no tax if retirement income is verifiable, duty free importing of your personal belongings, including vehicles.

Many of them offer good medical care and reasonable rates on health insurance.

Banking Overseas

Gaining access to your money is an enormous factor that you need to get right from the start. While you should have a local bank account, it should be in addition to your American based checking account and/or savings account.

Additionally, make sure you use a large U.S. bank -- a bank with many offices. The bank needs to have a large distribution -- where you can have 24 hour availability on the phone and Internet access. Also, make sure it is a bank that is used to dealing with foreign transactions.

Remember, prior to your move to establish a good working relationship with your American bank. Find a bank, preferably where you have a contact person within the bank that you can call personally, should you have any problems. You should also set up a direct wire transfer authorization from your U.S. bank account into your foreign account for emergency purposes.

Keeping some accounts in the United States makes a lot of sense. First of all, access is easy -- just use your ATM card. In addition to be uncomplicated, it also sometimes affords you a great exchange rate, the same one your bank receives. However, just like here in the U.S. -- be extremely careful where you use your ATM card.

Prior to your relocation, set up an automatic deposit of any Social Security benefits, monthly pension, or 401(k) check. While you can actually receive your Social Security dollars overseas and have it mailed to a foreign location, generally that is not recommended.

Likewise, use your U.S. bank's electronic withdrawal services to guarantee that any bills for which you still may be responsible for, back in the states, are paid on time.

Having your major account in the U.S. can also guard you from overseas currency fluctuations. The dollar tends to be more stable, but it largely depends on the country you are living in.

Also, be aware that these are very shaky times for the American dollar overseas.

Tax Realities

Retiring overseas requires some tax and pre-move tax planning. Just because you reside outside of the United States does not mean that you do not have to worry about taxes. The government will be keen to find out whether your move has anything to do with dodging taxes, rather than evading severe winters, or trying to live more abundantly on a fixed income.

Additionally, because each country is governed by its own tax system, residency and ownership laws -- it's impossible to know what other tax issues you will face in your new retirement country. Retirees should be extremely careful to do their research in this area before deciding on moving.

Just in case, you are thinking that renouncing your citizenship would simply eliminate the problem -- be aware that too, may not negate your tax liabilities. The government presumes that wealthy Americans who renounce their citizenship are doing so, just to dodge taxes. Since 1996, anyone earning over $124,000 or more a year -- or who has a net worth of $622,000 or more -- who renounces citizenship, must continue to pay taxes in the U.S. for ten more years, unless they can prove that they should be exempt from the law.

The IRS takes renouncing your citizenship very seriously. If it suspects you of suspicious motives of moving just to evade taxes, you could be banned from returning to the U.S.

Health Care

When you retire, health and health care become more important as you age. Certainly, it presents some issues to consider if moving to a foreign country. Definitely check out the local rules on health care, to see what your obligations are there.

Also, there may be something in your retirement plan that allows your health care benefits to continue during retirement -- but it may not cover you in a foreign country. Remember, you are not eligible for Medicare while you are overseas.

In conclusion, don't let all of the above considerations deter you if international retirement is your hearts desire -- just make informed decisions.

Medical Tourism

So, maybe you're not ready to make the leap of faith and decide to retire permanently overseas, there is an alternative to moving from the United States. As retirees, you can take advantage of lower costs for one of our biggest retirement financial realities -- medical procedures. Medical tourism is rapidly becoming one of the top determiners of retired couples.

What is medical tourism? Retirees are opting to travel to foreign countries to get high quality affordable health care, while combining the experience with a vacation.

Perhaps surprising to many is the fact that India, has become one of the most preferred medical tourism destinations. They have world class hospitals, very qualified physicians, and care is very inexpensive compared to the United States.

Many of these medical tourism facilities in India are combined with five star hotels. If you think about, you are being seen by many physicians already from India, here in the U.S.

Some of the more popular medical tourism procedures in India are:

  • Open heart surgery
  • Hip replacement
  • Knee replacement
  • Eye surgery
  • Dentistry
  • Gastric bypass
  • Spine surgery
  • Cochlear implant
  • Liver transplant
  • Bone marrow transplants
  • Cancer therapy

International Panama Retirement Facts

This article is for information, inspiration, and support and not a substitute for professional tax, legal, or financial advice.

Comments

    0 of 8192 characters used
    Post Comment

    No comments yet.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)