{"id":21516,"date":"2018-09-17T01:28:56","date_gmt":"2018-09-17T05:28:56","guid":{"rendered":"http:\/\/www.escapeartist.com\/?p=21516"},"modified":"2020-09-18T16:39:21","modified_gmt":"2020-09-18T21:39:21","slug":"the-financial-nuts-and-bolts-of-retiring-abroad-what-do-you-need-to-know","status":"publish","type":"post","link":"https:\/\/www.escapeartist.com\/blog\/the-financial-nuts-and-bolts-of-retiring-abroad-what-do-you-need-to-know\/","title":{"rendered":"The Financial Nuts and Bolts of Retiring Abroad \u2013 What Do You Need to Know?"},"content":{"rendered":"
Thousands of US retirees are waving off traditional retirement plans and embracing the golden sunsets of countries abroad. Goodbye Florida, hello world! Over <\/span>400,000<\/span><\/a> of them have already settled in greener pastures synonymous with affordable living, travel, hiking, and days spent on pristine white beaches sipping pina Coladas. \u00a0<\/span><\/p>\n There are similar ongoing retirement plans by over 3 million baby boomers who are set to retire in less than a decade. The opportunity to stretch their retirement dollar while seeing the world cannot have come at a better time.<\/span><\/p>\n <\/p>\n The rising worldwide adoption of technology and the fantastic bargain power of the dollar have played a huge role too. Add that to the rapidly falling costs of international travel and the great retiree migration is all but set to bloom.<\/span><\/p>\n Great article on retiring Overseas: How to Save For Retirement Overseas<\/a><\/strong><\/p>\n <\/p>\n American economist <\/span>Dr. Olivia Mitchell<\/span><\/a> of the <\/span>International Foundation of Employee Benefit Plans <\/span><\/i>defines retirement as “a great insecurity that we face rather than retirement security.” Retirement packages are no longer what they used to be. \u00a0Being abroad without proper financial planning can aggravate this distress further.<\/span><\/p>\n In <\/span>this<\/span> article, they<\/span> caution against romanticizing the idea. Retiring abroad can get pretty hard once you make the move. An overseas retiree needs to embrace a brand-new set of financial rules to enjoy their sunset years.<\/span><\/p>\n Moving Overseas: Demand True Community<\/a><\/strong><\/p>\n <\/p>\n Yes, you can collect your social security checks while abroad<\/span> There is a caveat though. A US retiree who has settled in North Korea, Cuba or any country under U. S sanctions cannot collect their dues. The funds are withheld till they move to politically favorable climates.<\/span><\/p>\n The good news is that your social security check or deposit can afford you a modest life in many parts of Asia and Latin America. \u00a0The standard of living is not off the roof unlike that of cities like London. In London for example, you will need more supplemental income from a good retirement account to live modestly. <\/span><\/p>\n You social security deposits will be availed to you through;<\/span><\/p>\n <\/p>\n A US citizen is taxed on the basis of citizenship rather than residency, so your tax obligations will follow you to paradise. The key is to file in with the IRS annually. If you land a job as an expat remember that your income will be taxed over the US foreign earned income tax credit of $103,800.<\/span><\/p>\n You are also expected to file paperwork on your foreign accounts that hold more than $10,000. A financial expert should help you out with the additional reporting requirements where necessary.<\/span><\/p>\n Ensure too that your tax obligations to your country of residence are met since some base their taxes on residency rather than citizenship. The US has varied tax treaties with some countries that ensure that residents get tax breaks or exemptions. Your financial advisor should advise you if such advantages are accrued to you in your chosen country of residency.<\/b><\/span><\/p>\n <\/p>\n One of the perks of retiring abroad is that medical care is more affordable than it is in the US. Which is a good thing because Medicare is not recognized outside of the US borders. If your chosen country of residence has a national health program, take steps to enroll as a resident. If not, purchase a health insurance coverage for treatment and possible evacuation to the US.<\/span><\/p>\n <\/p>\n Your plastic wallet could incur between 1-3% foreign transaction fees on all purchases made. This is a ghastly amount one you can escape if you settle on the right credit card facility.<\/span><\/p>\n <\/p>\n Where possible avoid the purchase of real estate overseas because a mortgage will be difficult to come by. You do not want a large amount of your savings tied up there impeding your flexibility. Rent your home for a time before purchasing it to ensure that you have some roots there and pay a local attorney for the paperwork and title deed to your property.<\/span><\/p>\nThe Unending Perks of Retiring Overseas<\/b><\/h2>\n
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The Big Picture on Retirement Abroad<\/b><\/h2>\n
Financial Rules for the Retiree Abroad<\/b><\/h2>\n
\n<\/span>Soaking up the sun is fun if you are doing it without any financial worries and a social security check can go a long way in alleviating that worry. An eligible retiree living abroad will enjoy this benefit depending on the number of work credits they have amassed over the years as well as their retirement age. <\/span><\/p>\n\n
Yes, the Tax Man Will Still Come Calling<\/b><\/h2>\n
Medicare Will Not Work Abroad<\/b><\/h2>\n
A Good Credit Card is a Gem<\/b><\/h2>\n
On Real Estate Purchasing<\/b><\/h2>\n