Retire Abroad
According to the Social Security Administration, the number of retirees who drew Social Security outside the U.S. jumped 40% from 2007 to 2017. While the COVID-19 pandemic has put the brakes on Americans’ plans to more aboard, once the crisis is over there’s likely to be an explosion of retirees choosing to live outside the U.S. part of the year or permanently. While it’s fun to dream about spending your retirement years in Europe or in a tropical paradise, there are many issues you need to think about before making such a life-changing decision. If you’re on Medicare, your plan will provide limited coverage in foreign countries. Even if the nation you’re considering offers free or low-cost government-subsidized healthcare, you may not be eligible for it as a non-citizen. And the quality of physicians and facilities in most nations is likely to be inferior to those in the U.S. If you plan to earn income while living aboard, you’ll probably have to pay taxes to both your adopted country and to the U.S. Banks and financial institutions in developing nations may charge higher fees and have lax standards for protecting against fraud. And if you give up your U.S. citizenship, you’ll be taxed on the value of the remaining assets in your estate. If you’re still committed to retiring abroad after the pandemic subsides, now is a good time to start researching the financial, healthcare, and lifestyle pros and cons of the countries you’re considering. And even if you find what seems to be the perfect location, consider renting first before you make a permanent investment in your new home.
