The decision to retire abroad is one being taken and embraced by increasing numbers of Britons who are all disillusioned with their country of domicile, and/or who want to see more of the world as soon as they have the time on their hands to do so.
If you’re actively considering making a new home from home abroad in retirement, this report will cover the key criteria you need to consider before you commit to the move overseas.
We’re going to cover all the key criteria you need to consider when retiring abroad, so that you don’t overlook any aspect of your planning that could be critical to your success as an expatriate. You can use this report as your checklist to a new life abroad in retirement!
What Are Your Reasons for Relocating in Retirement?
If you’re one half of a couple planning a move abroad then you both need to answer this question separately, and then compare and contrast your answers. You need to ensure that you’re both in agreement about this move, and that you both see it as the very best move you can make for your combined future happiness.
Conceivably you could have different key motivators driving your decision…but as long as you are both firmly committed to the move, that’s ok!
In terms of why you need to identify your reasons for relocating in retirement, it’s so that you can ensure your country choice matches up with your desires, and is a good choice to fulfil and meet your goals. Additionally and critically, you need to hold on to your positive reasons for relocating when you come across some hurdle or obstacle that makes you question your expatriation!
It’s inevitable that you will have some trying times when you turn everything upside down and make such a massive change to your life. If you have in mind your list of reasons for wanting to retire abroad and improve your life, these thoughts will carry you through.
Do You Have a Destination in Mind?
Very often it’s the case that would-be expat retirees have a country in mind for their relocation. Perhaps it’s a place where they have holidayed regularly and enjoyed themselves, or maybe it’s a nation where they have a second home already…
If this sounds like you, have you even considered that any other destinations could be suitable for you?
If you haven’t yet plumped for a given country, draw up a shortlist if you have one, and you can then assess your choice/s in relation to the following factors, or use the following factors as you do more research into the right country choice for you: -
The Weather - are you looking to live in a country where the weather’s better than you currently experience? If so, what constitutes ‘better?’ – usually for Britons this means living in a very hot country. However, a hot country can also suffer from humidity and even droughts.
These factors have to be taken into consideration and understood so that you’re at least forewarned and forearmed to cope. Consider also that you may need to live in an air-conditioned environment and this can increase your monthly electricity costs during the hottest months of the year.
Accessibility - despite the fact that you want to ‘escape’ abroad, there may be times in the future when you will want to return home, or have friends and family visit you. If you’re moving to the ends of the earth, this will be difficult and expensive…bear this in mind.
Personal Safety - in the UK we are well policed and we still have a fairly high crime rate, particularly in certain parts of the country. You will need to consider personal safety in your new nation – so where’s safe and where is there low crime - and therefore where is ideal for retirement?
Don’t underestimate this fact – and don’t believe the hype that some countries such as South Africa are really perfectly safe as long as you know where NOT to live! Just don’t take a risk…
Standard of Living - aspects and issues such as infrastructure, health care facilities, general amenities, shopping opportunities and culture can all contribute towards, or detract from, your standard of living. Think about the standard of living you really want – and/or what you can put up with and then ensure your country choice matches your criteria.
For example, if you couldn’t stand the thought of a power cut every time it rains, or you get really frustrated when things just don’t work, you need to live in a first world, Western nation in retirement! On the other hand, if you don’t mind dirt roads and basic infrastructure, your whole world of choice opens up a bit more.
Cost of Living - now more than perhaps ever before we’re all acutely aware of exchange rate fluctuations eroding the buying effect of a currency – and we’re also acutely aware that interest and annuity rates are at all time lows. These can all impact how much money you have to spend each month. When you’re moving abroad in retirement your monthly income may be fixed – where is it going to buy you the lifestyle you require. Do your homework carefully.
Integration Issues - some countries are easier to integrate into that others. For example, those where English is the mother tongue can present less of a challenge to retiring British expats than nations where you have to learn another language just to get by. However, look beyond just the language – where are Britons/foreigners/expats welcome, where have others made a successful home for themselves before you, where are you more likely to make friends and have a happy life.
Get Money Matters in Hand Before You Go
We’ve said it before and we’ll say it again now…the number one reason why expatriates fail is because they don’t sort their finances out realistically before they move abroad. For retirees this couldn’t be a more critical issue! You have to get your money matters organised properly before you go if you want to ensure a smooth transition abroad.
You need to get pension forecasts, you need to look at what money you will have coming in, you will need to consider whether the country you’re moving to is one affected by the state pension freezing debacle. And ultimately you will need to know how much you will have to live on each month, and what is in the pot for a rainy day.
Once you’re permanently settled abroad and therefore non-resident in the UK for tax purposes, conceivably you can access the opportunities available to you and your money offshore. For example QROPS (qualifying recognised overseas pension schemes) are very popular with those who know they’re going to retire abroad because these pension schemes can allow for an expat to have greater flexibility in terms of the management and enjoyment of their money.
You don’t have to buy an annuity with QROPS for example – meaning that any unspent pension can be left to your beneficiaries after your death rather than lost – and you have greater flexibility in terms of how your money is invested.
You will need to look at whether you can save tax on your pension income in your new nation in retirement – Cyprus is a low tax country for retirees for example, Malaysia and Belize can be tax-free for retirees, and other countries may only tax you on money you remit into that nation – making it important for you to know in advance so you can keep the bulk of your wealth offshore.
It’s critical that you understand your position and explore all your options with a qualified independent adviser.
Finally – Stop Thinking and Start Doing!
In other words, there will come a time when you need to put your plans into action and make the move abroad a reality. You will know when the time is right – but may we just say, the sooner you get organised and get going, the sooner you can begin enjoying your new life abroad!