After three international moves across three continents with two kids, a dog, a turtle, a husband, and two businesses, I’ve learned a few things about relocating overseas. Here are 11 things you should consider when contemplating retirement abroad:
1. The first step to any move abroad is to set your priorities and to be honest in the process. Decide what matters to you most, and remember to include things like evenings at the theater, friends whose company you can enjoy in English, the cost of living, and a reliable Internet connection. And don't kid yourself about life overseas. If you can't imagine life without a Maytag washer and dryer, for example, you may need to rethink the entire proposition.
2. Make all decisions jointly with your significant other. Your spouse's ideas about what he or she wants and, as important, what he or she will not tolerate, may shock you and vice versa. It’s better to get them on the table sooner rather than later.
3. Recognize that no place is perfect. No climate is ideal. No city is 100 percent crime-free. Manage your expectations.
4. Understand that no other country on earth is going to seem as comfortable, convenient, or efficient to you as the U.S. In many places, shops, banks, dry cleaners, and government offices close for lunch and call it quits for the day by 5 p.m. You can't run errands on your lunch break or on Sundays. In some countries, you must pay utility bills in person. In the developing world (not only in Latin America and the Caribbean, but in emerging Europe, too), appointments and schedules are more like suggestions than commitments. And only a handful of real estate markets outside the U.S. operate with multiple listing services, meaning the search for your new home in paradise will likely be complicated and extended.
5. Rum and real estate don’t mix. I call it margarita madness. It's a syndrome that can set in shortly after your arrival in any sunny, sandy, tropical locale. The water is turquoise, the sand is soft, and the palms are swaying. A guy you just met and shared a few rum punches with in a bar downtown is now driving you along the beach road bordering his development, pointing out where the clubhouse and marina will go and where your new home could be positioned. Look at the view. Feel the breeze. It doesn't get better than this. And he has only two lots at this price remaining. Would you buy a piece of real estate under those circumstances back home? A piece of property you're seeing for the first time in a place where you've never been before from a guy you met in a bar? You need to do more due diligence when investing in a piece of property in another country, not less.
6. There's no such thing as the world's top retirement haven, and no one-size-fits-all Shangri-la. The only one who can determine the best place for you to retire is you. There are dozens of beautiful, affordable, friendly, safe, and charming places where you could choose to spend time in retirement. It's a question of what you're looking for and what's most important to you.
7. Your U.S. health insurance likely won't cover you once you leave U.S. soil. However, you have good options for both health insurance and health care overseas. Start by determining whether you’d like international health insurance. (The world’s biggest international health insurance carrier is Bupa International.) Local insurance in the country where you’ll be living can be very affordable (less than $100 per month), but it will cover you only in the country where you’re living, making it an unrealistic choice if you’ll be dividing your time in retirement or traveling regularly. Some people also choose to go without health insurance at all, which isn’t as crazy as it sounds. In some parts of the world, medical costs are so low that it can make more sense to cover them out of pocket instead of insuring against them.
8. Rent first. Don't buy a new home in paradise until you've tried that paradise on for size for several months. Even if the country turns out to be your ideal retirement haven, maybe the city, region, or neighborhood where you first land isn't where you ultimately want to be. Give yourself time to get the lay of the land before committing to a property purchase.
9. Get local tax advice in the country where you're planning to reside before you take up residence. When we moved to Ireland 15 years ago, we met with Ernst & Young in Dublin during one of our pre-move visits. This turned out to be one of the smartest things we did (though we didn't realize it at the time). In Ireland then (this is no longer true today, as the relevant tax legislation has been amended since), if you organized your financial affairs according to a certain strategy, you could reduce your annual Irish tax burden substantially. The strategy had to be employed before we had a physical address in Ireland. If we'd waited until we'd taken up residence on the Emerald Isle, our annual tax obligations would have been considerably greater. Understand the tax situation in the country where you’re intending to retire before making your move.
10. Pay attention to your gut. A place either feels right or it doesn't. All your research and planning in advance is important, but nothing substitutes for the feeling you get when you hit the ground.
11. Be prepared for panic. Over nearly 30 years of speaking with people who've made the move to another country, I've yet to meet one who didn't experience a moment of, "Oh, my gosh, what in the world have I done?" Expect to question your sanity for having ever considered the idea of moving so far from home and hearth. Prepare for it, and understand that it will pass. Everything you made the move for is waiting for you. You just need to give your perspective time to adjust.
Kathleen Peddicord is the founder of the Live and Invest Overseas publishing group. With more than 25 years experience covering this beat, Kathleen reports daily on current opportunities for living, retiring, and investing overseas in her free e-letter. Her book, How To Retire Overseas—Everything You Need To Know To Live Well Abroad For Less, was recently released by Penguin Books.