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Retiring Abroad: Does Your Wanderlust Make Financial Sense?

Retiring Abroad May be Better When You’re Older, Wiser- and Richer

While in college, did you ever dream of spending a year abroad? You might have hoped to study Spanish in Mexico, or perhaps you wanted to master art and architecture in Italy, or maybe you even considered college in China to learn engineering. Perhaps you thought about teaching English in Japan. Maybe you just wanted to take a year off of everyday life and backpack around Europe. Retiring abroad seemed too far off, you were ready to do it all while you were young. Sound familiar?

More than likely, you instead ended up getting caught in the bustle of credit hours and majors, and then your career and job search. Maybe you eventually had a family and their demands turned your dreams into fantasies that had to be pushed to the back burner. Fast forward through your many years of employment, a.k.a. the daily grind, to retirement.

Your future now stretches in front of you once again, like a blank canvas, waiting to be painted with your new plans. Retiring abroad? It might actually work.

Your future now stretches in front of you once again, like a blank canvas, waiting to be painted with your new plans. Retiring abroad? It might actually work. You revisit your bucket list and unearth your unrequited dreams of the past. You evaluate your finances. Could relocating overseas actually be a solid financial decision that secures an exciting and maybe even economically sound thereafter? It could be, depending on what international abode you select.

If you are on the cusp of retirement (but not quite there yet) and want to maximize your investments so you can eventually retire abroad, you may like Life After Bonds: Non-Traditional Investing Advice for Boomers.

Retiring Abroad: An Economical Vacation That Never Ends?

When thinking about retiring abroad, the information overload can be overwhelming. Internet articles abound. Your adult children may have opinions. Expat friends may have strong ideas about where you should go. Visions of caldo verde, pho or ceviche may be dancing in your head as you visualize life on a beach blanket.

However, you cannot wholly choose your haven for retiring abroad based on its appealing climate nor its tasty food. Your planning process should begin with the U.S. Department of State’s Travel.State.Gov site which identifies some crucial considerations (yes, following your youthful dreams does require some adulting) for planning your international golden years.

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Their list recommends looking at visa and residency requirements as well as local laws. Also, medical costs, finances and Social Security benefits should be investigated. Examine accessibility and accommodations available in the countries you are considering. Evaluate any security concerns. Do your due diligence.

Now, make your own list and prioritize your retirement needs. Do your health concerns require you to be in a country where you have easy access to treatment and where medical costs will be manageable? Is a low cost of living important? Can you physically tolerate a colder climate or are you hoping for year-round sunshine? Where do your retirement dollars stretch the furthest? Is proximity to friends and family a high priority?  Is retiring abroad a viable option for you/your spouse?

Armed with the knowledge of your needs, wants, finances and the requirements of retiring abroad, you may then begin to explore your international destiny. 

For a lineup of the countries that will help you make the most of your retirement dollars, read on.

A Sunny Retirement in Mexico

In 2017, International Living ranked Mexico as the world’s best place to retire. Your U.S. dollars will go far in Mexico. International Living found that “the cost of living is great — expats report living well for as little as $1,200 a month—and has gotten even better with the weakening of the peso against the dollar in recent years.” Additionally, their findings indicate that Mexico offers high quality healthcare for half to a third of the cost of health insurance in the U.S. The icing on the cake: We all know that Mexico’s climate is mild and pleasant. Margaritas and mariachis are also quite nice.

In 2017, International Living ranked Mexico as the world’s best place to retire.

On top of the dreamy weather, low cost of living, and incredible health benefits, what more could a retiree ask for? How about an opportunity to save even MORE money? A very popular benefit offered by the Mexican government to individuals over age 60 (Mexicans and foreign residents alike) is the INAPAM (Instituto Nacional para las Personas Adultas Mayores) discount card. Mexperience explains that this card is, “offered to all Mexicans and foreign residents who are 60 years of age or older and enables them to enjoy worthwhile discounts on a whole range of goods and services including food, medicines, transport, clothing, as well as recreation and leisure activities.” These savings are comprehensive and the pesos you will save by using this card add up quickly.

As with any country, there are some downsides to living in Mexico. As reported often in the news, drug-related crime has caused an uptick in violence in Mexico. Americans are often targeted for crimes. Take into consideration the U.S. Department of State’s travel advisory and advice when considering Mexico. These concerns should be weighed and compared to the many advantages of a Mexican retirement.

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Don’t forget: The geographical proximity of Mexico to the U.S., a multitude of superb tourist attractions, and a resort-like climate practically guarantees visits from American grandkids family and friends. While Spanish is the national language, English is widely spoken as well. The advantages of retiring to Mexico are many.

But maybe Mexico is not far (or exotic!) enough. No problem; there are other options.

An Asian Adventure: Retiring Abroad in Vietnam

If a low cost of living is a top priority for you, you may want to consider living in Vietnam. Live and Invest Overseas has declared one particular city (Hoi An) to be a “true cost of living juggernaut,” because of the $774.40/ month cost that a retired couple would need to live there comfortably.

In addition to the cost of living, there are many other advantages to retiring abroad in Vietnam. Blogger Shannon O’Donnell of “a little adrift” notes that it is generally safe from violent crime, provides an interesting cultural atmosphere, and offers some excellent cuisine. While the Vietnam War will always remain a tragic chapter in American history, some Americans who fought in that war are choosing to retire there, and many Vietnamese have relatives living in the U.S., according to O’Donnell. As a result, relations between relocated Americans and the Vietnamese are amicable.

It’s never too late to chase those long-gone dreams.

And if you can’t sit still during retirement and want to work some, there are well paid teaching jobs available in Vietnam. World of TEFL recognizes Vietnam as a great option for the mature teacher. Amusingly, teaching overseas is something many college grads do once they graduate. It’s never too late to chase those long-gone dreams.

What about medical care? International Living notes that the best medical care is found in Ho Chi Minh, followed by Hanoi, and that “both cities have internationally accredited hospitals and medical care is competent and affordable.” Keep in mind, good healthcare might be more difficult to find outside of a big city.

Keep in mind, good healthcare might be more difficult to find outside of a big city.

Another drawback of retiring to Vietnam, as noted by Asia Life Magazine, is that long term visas are not granted without a work permit. The need to routinely navigate the visa renewal process could put off many retirees. Another con: homesickness. Distance-wise, Vietnam is far from the U.S. Consider whether you can go long periods of time without a “grandchild fix.” On the other hand, you may have family and friends flocking to visit your exotic retirement locale.

Retirement with a European Flair: Spain

If a European retirement is your dream, you may want to brush up on your Spanish language skills. Retiring abroad in Spain will allow you to live out your days amongst castles, intriguing culture, and tapas. And the cost of living fits many retirement budgets. According to International Living, “a couple can comfortably get by in smaller cities from as little as $1,900 a month, including rent. Small one- and two-bedroom apartments can be rented from as little as $500 a month, and can be bought from about $70,000.”

Expat Info Desk offers the Spanish healthcare system as a pro: They have a national healthcare system that is available to all, even those from other countries. Spain offers a straightforward residence visa for retirees, which requires proof of permanent retirement income. The minimum income required is 25,560 Euros annually plus 6,390 Euros for each additional family member.

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But before you don some sunglasses and purchase the Spanish edition of Rosetta Stone, pull out your reading glasses for the “fine print.” Expat Info Desk notes that there are some limitations to healthcare for those who come from abroad. Long waiting periods for some forms of treatment means Spain may not be an option for some retirees with chronic health concerns.

They have a national healthcare system that is available to all, even those from other countries.

While easily accessible by plane, Spain is quite a distance from the U.S. and it just might be too far for retirees who want to visit with grandkids regularly. Although, with sites like Expedia advertising round-trip tickets as low as $156.51 (of course, fares will vary when considering departure city and time of year), the miles between Spain and the U.S. might be meaningless.

If you are a retiree who wants to relax but still enjoy life, Spain’s beaches, historic cities, and laid back lifestyle may be for you.

Panama: Where Newcomers Are VIPs

Can’t decide between a mountain chateau or beachfront cottage? Both are options in if retiring abroad in Panama. In 2017, Panama was ranked by International Living as the second-best place in the world to retire. Some advantages include Panama’s proximity to the U.S., its modern infrastructure and its affinity for foreigners.

But that is not all! The Embassy of Panama provides comprehensive information for retirees. The Panama Pensionado Program is considered one of the best retirement programs in the world and is open to expats. Pensionado Program benefits include: an import tax exemption for household goods, discounts on utility bills and airline tickets and other transportation. Also included are significant discounts on loan fees, doctor and hospital services, dental and eye exams, and medicine. The Program also provides for a discount on professional and technical services, movie tickets, cultural and sporting events, and even reduced hotel rates.

The Panama Pensionado Program is considered one of the best retirement programs in the world and is open to expats.

Sounds perfect, right? There are some downsides to retiring in Panama. Michael Long of Panama for Beginners explains that in order to live cheaply there, you may have to give up some basic luxuries, like air conditioning, because of the high cost of electricity. Of course, this is not as much of a concern in the mountain regions, but it is definitely something to factor in to your decision. Long also notes that while English is spoken by many, you should be prepared to learn Spanish if you don’t know it already. Depending on your perspective, you might also consider this an upside to retiring abroad in Panama.

Retiring Abroad: Choose your Own Adventure

If none of these options reflect your ideal vision for retiring abroad, take a good look at your world map and make your own plan. The internet is exploding with resources as more and more retirees embark on their overseas adventures.

While retirement marks an ending, your journey is just beginning.

Talk to your financial advisor. Research your options. Check out Numbeo to evaluate the cost of living in your city of choice. Then use Expatistan to compare costs of living between cities as well as calculate the amount of income you need to live there comfortably. Don’t forget to consult the Global Peace Index to help you identify safety concerns of the country you select. Then, visit the local consulate of the country you choose and begin the residency process. While retirement marks an ending, your journey is just beginning.

About Cristina Nolan

Cristina Nolan, Director of Webinar Services at Financial Poise, earned her law degree in 1997. Cristina has worked in online education since 2004 and has significant experience in the design, development and execution of online curriculum at the college and graduate school level. She is also an experienced legal editor. Courses she has taught include…

Read Full Bio »   •   View all articles by Cristina »

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