Returning home from an international vacation can leave us feeling saddened and missing the sunny skies, white beaches, or cultural city centers. It’s easy for our minds to start wondering “what if”…? What if I were to retire abroad? Would I be able to retire earlier? Would I be able to afford the healthcare? Will my Social Security benefit be enough to cover all my monthly expenses?
As the retirement savings crisis continues to increase, the number of Americans choosing to retire abroad also increases. According to the Social Security Administration, the number of Americans collecting their benefit while living outside of the U.S. is now almost at 700,000 people. This figure has continued to grow since the Great Recession. If all of the stars align, this could be an attractive and viable option for retiring Baby Boomers.
International Living has assembled a list of the “Best Countries to Retire”, which includes Mexico, Panama, Ecuador, Costa Rica, Colombia, Malaysia, Spain, Nicaragua, Portugal, and Malta. The list dives into the pros and cons of living (rather than simply vacationing) in each country. However, in reality, Americans who are retiring abroad are more likely to live in Canada, Japan, Germany, Mexico, and the U.K. The reasons for choosing a country vary widely amongst retiree.
The Travel Department of the U.S. Government gives you an itemized bullet point list of important planning steps before you choose or move to a different country during retirement. Some of these items include visa/residency requirements, exchange rates, and emergencies. Two items that top the list are taxes and healthcare. How will your various sources of income be taxed and what are your options for healthcare?
Are you considering retiring abroad? Contact Sharkey, Howes & Javer to speak with a CERTIFIED FINANCIAL PLANNER™ to determine how this may fit in to your retirement plan and what you may need to consider before making the move.
