Many people retire in the U.S., but an increasing number of Americans uproot and relocate to foreign lands. Whether you dream of soaking up the sun in a Mexican villa or sipping wine in the south of France, consider the following before you make the big move.
Culture, Climate and Community
Enjoying new experiences and cultures can be an intriguing factor to retiring abroad. Research has even shown such stimulation may enhance your mental and physical health. Choose a retirement destination with a climate, landscape, community and lifestyle that suits your preferences.
On the down side, a different way of life can also be stressful. If you need to learn a new language and adapt to different ways of obtaining basic goods and services, you may find the transition harder. Being far removed from an established social network of friends and family may also make it more difficult for you to feel comfortable and could cause a sense of isolation.
Potential financial advantages draw many people to a foreign retirement. A lower cost of living could help your savings last longer or allow you to live more comfortably abroad than stateside. Some countries actually provide financial incentives to certain immigrating retirees. The cost of living tends to be higher in European cities and lower in Asia, and South and Central America.
Healthcare costs may also be lower in some other countries, and you won’t necessarily sacrifice quality. In some areas, you may be able to participate in socialized or government-supported healthcare programs.
If you hope to own a home in your new country, you may face challenges. In some countries, foreigners can’t own land; in others, complex regulations make it very difficult. Keep in mind, due to U.S.-based pensions and 401(k)s , you may end up paying taxes in two countries.1
Help and Homework
It’s important to bear in mind living in another country is a different experience from vacationing there. To better understand the realities of day-to-day life, visit the location for an extended stay and try to emulate your expected retirement lifestyle.
You can also find a wealth of helpful insights and information online from resources like these:
To make sure that you’re on track to financially achieve the retirement of your dreams, at home or abroad, contact a Fifth Third Bank advisor for a personal review of your portfolio and retirement plan.