Everything You Ought to Know Before You Retire Abroad

Summary: Some hard facts, realities and solid advice for you to get to grips with before you think about retiring abroad

According to figures collated and a survey conducted by the Institute for Public Policy Research, in 1981 there were a quarter of a million British retirees living abroad, in 2005 there were a million living abroad and by 2050 there will be a staggering three million British retirees enjoying their retirement overseas.

This means it’s entirely possible that you’re one of an increasing number considering your retirement options and if the thought of a place in the sun or just a new life somewhere abroad appeals, this article will tell you everything you ought to know before you retire abroad so you can ensure the path is right for you and that you can succeed in realising your own personal dreams.

Your Family & Friends

While it may be your dream to retire abroad have you thought about whether your spouse shares those dreams as intensely as you do?  As you approach retirement there is every possibility that you and your spouse will have spent a good few years together and know each other well…but such a life changing decision as selling up and starting again somewhere foreign will test any relationship, therefore before you go ahead you need to know you’re both pulling in the same direction.

It is imperative that you speak to your nearest and dearest about your plans from the outset to make sure you both want the same thing - and going forward if you make all decisions together one cannot blame the other if it all goes wrong!  More importantly, you will have both done all you can to ensure the new life abroad that you build is perfectly aligned with both your dreams.

When it comes to children, grandchildren and extended family it is also best if they are onside and supporting you.  If you can, speak openly and frankly about why you want to make the move and try and get them to understand.  Sometimes it’s the case that children won’t want to see you go and they will try and persuade you to stay…but don’t be swayed if this is really what you want to do. 

Some (un)lucky (?!) retirees on the other hand paint such a perfect picture of living overseas that their entire family packs up and makes the move with them!  The usual situation is that as long as you move to an accessible location and have enough room for visitors, you’ll receive plenty of visits from family and friends over the years.

Taking that fact on board is important when considering where to live, because you will need to be in a location that is at least relatively easily and affordably accessible to enable friends and family to visit.

When it comes to retiring abroad and friends, there are those you’ll leave behind with whom you can hopefully keep in touch via email, conventional mail, phone calls and visits – and then there are those you have yet to meet.  When you relocate you will need to make an effort to get out and about and meet people and build new friendships.  Having said that, don’t be too tempted to rush into a strong bond with the first people you meet just out of a sense of needing to belong - be friendly, be approachable but also be selective because quite often the first people you fall in with don’t become your life long friends…these usually take a while longer to find.

Your Finances

Moving abroad is a very expensive undertaking and you must not underestimate just how expensive it will be if you are to survive the move.  For the majority of people it involves a house sale in the UK and a house purchase abroad - or at least a re-mortgage and finding tenants for the UK house and then buying or renting overseas.  It involves relocating furniture, possibly relocating pets, relocating or buying a car and it certainly involves relocating yourself.  Then there are the additional hidden and unknown expenses – you’ll suddenly find you have to pay up front for an annual essential service, or you’ll discover the oven in the new house doesn’t work or you’ll want to add fly screens or air-conditioning to the new property you’ve just bought for example.  For some things you can budget and for others you just can’t.

To financially cope when you retire abroad you need to have an incredibly good understanding of your finances, what’s where, how much you can spend, and what the day to day cost of living will likely be.  Ideally you’ll have enough in the bank to make the move, you’ll have a regular income to cover day to day living and you’ll have a lump sum tucked away for unforeseen expenses.

Do not underestimate how much it’ll cost to retire abroad – money is the number one reason why people fail when they move overseas, resulting in them falling on hard times and/or having to return home; and so if you’re going to do this properly you should really save hard, understand your financial commitments and income and also have a certain amount set aside in case of a rainy day or a day when you decide you want to move on elsewhere or even move back to Blighty.

Your Home

One of the reasons why so many of us can consider retiring abroad is because we have accrued impressive amounts of equity in our principal residence that will allow us to sell up, buy a property in a cheaper location and also have enough money left in the bank to supplement our retirement income.

However, is it always necessary and even right to sell the principal residence or would it be more advisable to re-mortgage it and use the money to fund a retirement overseas whilst letting out the UK property to pay the UK re-mortgage?

There are a number of options to consider such as those above…in addition should one buy a property abroad or rent a home overseas?  You need to think long and hard about your options – while you may be adamant today that once you’ve made the move you’ll never return, but you should keep in mind the fact that an awful lot of those who do make the break for the sun one day decide of their own free accord to return ‘home’. 

Also, when it comes to finding a new home, while you may be certain of the location you want to live in in a given country now, you may change your mind somewhere down the line.  In so many countries it has been said by expatriates that the first home a foreigner buys costs twice as much and is half the size of the second home!  Remember, when it comes to profiting from property the main money is made at the point of purchase!  So you don’t want to rush your buying decision…meaning you may want to rent first or at least spend a while before you retire house hunting abroad – which is, after all a great excuse for regular holidays.

Your Health

This point may be tucked towards the bottom of this article but that does not mean it is unimportant…in fact, this point could be the most important point of all.  You need to think long and hard and long term about your physical and mental health and be realistic and know that when you start to age you start to become more susceptible to ailments, illnesses and medical problems…it’s a sad fact upon which none of us wish to dwell, but it is a fact nonetheless…

So – on the one hand ask yourself this - how are you going to afford medical treatment in the likely event that you will need a certain amount of it at some point during your retirement abroad?  And on the other hand you need to think long and hard about the type of care you will be able to get in the country you’re thinking of moving to. 

However idyllic a certain country is today – how idyllic will it look when you need an ambulance, you need home care, you need an extended stay in hospital with round the clock nursing care or you need essential drugs or complicated treatment? 

Take off your rose coloured glasses now and take a reality check please - the author of this article (that’s me) lives abroad in a location where there are an awful lot of international retirees and in a location where health care is pretty rudimentary.

I have seen, heard and witnessed with my own eyes what happens to people when they slip and break a limb, when they fall ill with an unknown serious ailment and even when they have a bad accident and require long term care…and it’s not good.  For those without private health insurance or without the means to afford a private hospital the level of care is basic, family and friends are essential to assist with nursing and long term care and what’s more, poor medical treatment can make a less serious problem into a malingering issue which can bring with it additional problems such as depression for example.

I’m sorry to be so negative at this point - but so few people thinking of retiring abroad ever seems to take enough time thinking about how they are going to be able to afford health care or even get decent health care.  Suggestions for tackling this issue head on include finding out about getting private insurance and ensuring this covers you for critical and long term care as well as major and minor ailments, having enough in the bank to be medically evacuated ‘back home’ and learning more about the levels and availability of health care in your preferred country.

Okay, lecture over!

Your Happiness

And finally – your dream may be to retire abroad, have a villa in the sun, sit on your terrace with a glass of something cool to hand and a sunset to watch over the beautiful sea…but what about when you’ve done that every night for a week, a month, a year?  Do you think you might start to get a little bored with a routine filled with doing nothing but sitting with your feet up?!  Don’t get me wrong, everyone deserves a peaceful retirement, but the vast majority of people need something in the way of mental stimulation to stay happy…so, start thinking about how you’ll fill your days. 

You could cultivate a hobby that you now only have a little time to enjoy, you could take on new pursuits, develop new interests, have new experiences…

If you prepare for the fact that sitting about all day will become boring you’ll never get fed up with having retired abroad, you’ll appreciate the beauty of your new surroundings for far longer and you won’t become one of those winging expats who start drinking at noon and wish their lives away in retirement.

So, good luck with your plans, make sure every decision you take is based on facts and hard evidence rather than just dreams, assumptions and hearsay and you will have the most perfect and idyllic retirement abroad and you really will be able to say ‘I’m living the dream!’

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