Should I Retire Overseas?

Do your research carefully before deciding to retire abroad. (Creative Commons Licensed Image)People entering retirement are increasingly choosing to spend part or all of their time in other countries. Lower cost of living, great weather, beautiful scenery and great food can make the idea of retiring abroad very attractive. But there are some difficulties associated with an overseas retirement, including tricky tax, medical and legal issues. In this article we look at some of the good points and tough points of retiring abroad.

Why Retire Abroad?

Many countries have a lower cost of living than the US. This includes developed countries such as New Zealand and Spain, as well as countries in South America and Asia. And when these countries also feature great food, friendly people and beautiful scenery, it's not hard to see why people would consider packing up and living overseas.

Financial Considerations

Tax can be a tricky proposition when you live abroad. You'll need to do your research to determine what taxation laws exist in the country you're planning to live in. If you're a US citizen residing permanently in another country, you can earn up to $87,600 per year without paying double taxes, but after that you'll be slogged by both the US and local governments. Many countries have tax treaties with the US, but make sure you're across the specifics before you make a decision.

Banking can also be tricky. If you're receiving money from the US, you'll have to factor in the cost of transferring money into your local bank account. The most economical way to do this is generally via wire transfer - try to do this in large blocks when the exchange rate is strong to make the most of your cash and avoid excessive fees.

Speaking of which, currency fluctuations are another important consideration. As the financial crisis at the end of 2008 showed us, currency values can swing wildly. Make sure you factor in the chance of higher living costs when deciding if you can afford the move abroad.

Owning Property

You'll need to be aware of local laws regarding foreigners owning property. In some countries, foreigners aren't allowed to own property at all, or are restricted to buying land in certain areas. How clear is the title? How strong are individual property ownership laws? You don't want to buy a piece of land, only to have the government take it off you on a whim at a later date.


This is a big one. If you're a US citizen, Medicare will not cover you in a foreign country. That means you'll need to be able to pay for either health insurance, or for the cost of medical bills in the country. Otherwise you'll need to travel back to the US for medical treatment - a very important consideration for someone in their retirement years.

You also need to consider the standard of health care. While the US health system has come under attack, the standard of care is very high. The same can't be said of a lot of countries where the cost of living is much cheaper. Be aware that the health care in these countries may not be comparable to what you're used to receiving at home and make sure you can live with that.

If you're taking prescription medicines of some kind, check out the country's pharmaceutical laws to make sure you can legally possess these drugs. Drug laws differ quite markedly from country to country, and you don't want to end up with a legal problem over a simple misunderstanding.  Also examine whether it will be possible to buy the drugs you need in the country, or if you need to ship them from home.


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