Where To? The Realities of Retiring Abroad
Many retirees dream of retiring to a tropical paradise or meandering around the globe. Whether it’s a classical villa in a remote village or an adventure over rugged terrain, there’s an expat retiree daydream to suit nearly all of us.
But while the dream is fantastic, moving abroad is a serious undertaking, and there are a number of financial and practical issues that you need to take into account before committing to a move.
In this article, we’ll touch on some of the most basic mistakes and oversights that expat retirees make in choosing a new home base. In future articles, we’ll help you understand the financial planning issues and challenges involved with living abroad, including healthcare and estate planning. Keep an eye out!
The truth about lower living expenses
One of the biggest mistakes expat retirees can make is in assuming that all their costs will be lower after moving abroad.
Unfortunately, while you might save money on real estate or healthcare, your costs may not fall across the board. In fact, depending on where you go, you might find yourself paying more for food, technology, transportation, and everything in between.
You also might discover that paying for those services isn’t as simple as it is at home. In many countries, electricity bills are still paid in person. That means going to a pay point, standing in line, and taking care of the bill by speaking with another person.
If this kind of local language usage or inconvenience is very unattractive to you, it might be better to consider more developed countries instead. Of course, that could eliminate any cost savings altogether.
Getting there – and back
Another issue to consider is the convenience (not to mention the cost) of traveling to and from your new home. Far-flung paradises are typically expensive and time-consuming to reach, an experience that can quickly go from adventurous to aggravating.
Similarly, an isolated villa far outside the nearest town might make for a wonderful and relaxing getaway – until you run out of milk.
When considering a retirement location – especially one that’s hard to get to – consider these questions:
- Are all the amenities you need within convenient traveling distance?
- How far is the airport? Once you’re there, how long is the flight to the US?
- How often do you plan on traveling internationally?
- What would happen in an emergency? Could you easily access transportation to a regional hospital, or even back to the US?
If you’re planning on living a more isolated life, questions around the convenience of driving places, receiving deliveries, and access to healthcare become even more important.
Speaking the language
Moving to a country with a language you’re not familiar with has a certain attractiveness – an immersion in another culture, different living experiences, and something new to learn.
But it can also make the most basic aspects of day-to-day living, such as banking (or paying that electricity bill), more time-consuming or even stressful.
Keep in mind that even countries with services that are geared towards American retirees, like Panama, aren’t completely bilingual. You’ll almost always need to pick up a little bit of the local language to get by and feel more at home.
If you’re not inclined to learn a new language, it might be wise to reconsider your options.
Invest in a test
Once you’ve picked your top retirement destination, consider visiting for a few months first. After all, it can be tough to know exactly how much of the local language you’ll need or how hard it is to get to the airport until you’ve experienced it.
Renting a house or apartment for a short period might seem costlier on the surface, but it will provide you with an extremely valuable escape hatch should things not go according to plan.
For example, you might enjoy your first few weeks as an expat, only to find that you’re bored in your retirement paradise. Or maybe you’ll find you can’t take the humidity, the insects, or the bureaucracy.
You just don’t know what to expect until you’ve spent time in a place as a resident, and if the plan is to enjoy an expat life, it’s better to be sure about it beforehand.
In our next article in this series, we’ll cover some of the healthcare issues associated with retiring abroad.