Is Retiring Abroad on Your Bucket List?

A warmer climate, a lower cost of living, a charming locale — there are many reasons Americans choose to spend retirement living in a foreign country. If retiring outside the U.S. appeals to you, plan your move carefully and consider the impact living abroad may have on your daily life.

Two Bank Accounts

Set up an account at a local bank several months in advance of your move to make sure the account is open and available to you when you arrive. You’ll also want to maintain an account in the states to receive retirement account distributions and Social Security benefits. (Social Security will also deposit benefits in bank accounts in most foreign countries.) Keep in mind that currency exchange rates fluctuate, which can affect the cost of living abroad.

Uncle Sam Wants His Share

Your income is subject to U.S. income tax no matter where you’re living, so you will have to file your taxes in the U.S. Some countries have tax treaties with the U.S. that may save you money. Consult a tax professional to make sure you’re taking advantage of any tax benefits available to you.

Rent or Buy?

It’s easy to get swept away by the charms of a new place, but it’s smart to spend time in your chosen location before committing to buying a home. An English-speaking relocation consultant can help you with an apartment search and rental agreement. If you eventually decide to buy, hire an attorney who understands the local market.

Healthcare Concerns

Medicare will not cover you outside of the U.S., so make sure you evaluate the healthcare system in your chosen country — specifically, what services are covered, the quality of care and the costs. Consider retaining parts of Medicare so you won’t have to re-enroll and incur penalties if you return to the U.S.

Enroll in STEP

Open to U.S. citizens traveling or living abroad, the Smart Traveler Enrollment Program (STEP) allows you to enroll your trip/stay with the nearest U.S. Embassy or Consulate. Enrollment helps the Embassy and your family and friends contact you in an emergency.