Retiring Overseas? Take These Steps First

If this has you considering spending all or some of your retirement outside the United States, you’re not alone. More than 440,000 retired workers are collecting Social Security benefits abroad.

Before you pack up to join the ranks of those retiring overseas, check the immigration and residency laws of the country in which you wish to live. Countries have differing requirements for visas and residency, with many of them requiring a certain amount of passive income. Some countries also allow you to establish dual citizenship based on the birthplace of your parents or grandparents.

Shannon Raisor, a customer advocate at Wise, a company that facilitates international money transfers, offers this advice.

5 tips for retiring overseas

1. Figure out the cost of living.

“Research and carefully evaluate the expenses associated with living in a foreign country,” Raisor says. “Draft a list of expenses and then compare it with how much these same expenses will cost in the new country.”

2. Account for currency fluctuations.

With proper planning,” Raisor says, “the impact of currency dips can be minimized. For instance, individuals can ’fix’ the currency by purchasing it in advance and depositing it in a bank account, so that in case the rates increase, you’ll have some cash that won’t be affected by sudden changes.”

3. Open a bank account.

Once you determine where you want to locate, Raisor says, “it is vital to open a bank account in that country. Since most U.S. banks do not have international locations, retirees will have to set up a new bank account…We also recommend maintaining a relationship with your current bank in the United States.”

4. Research taxes.

The United States has tax treaties with many foreign countries. How these treaties affect your taxes if you live in one of them can be found at www.irs.gov/businesses/international-businesses/united-states-income-tax-treaties-a-to-z. Raisor further advises establishing a plan with your accountant to manage taxes in your new country.

5. Check your Social Security and health coverage.

Information about receiving Social Security while living overseas can be found at www.ssa.gov/pubs/EN-05-10137.pdf. In general, Medicare doesn’t pay for medical care outside the U.S.

Further information about retiring overseas is on the U.S. State Department website. Go to http://travel.state.gov and type “retirement abroad” in the search box. Or go to: https://travel.state.gov/content/travel/en/international-travel/while-abroad/retirement-abroad.html.

Elaine Silvestrini is associate personal finance editor at Kiplinger.com. For more on this and similar money topics, visit Kiplinger.com.

©2023 The Kiplinger Washington Editors, Inc. Distributed by Tribune Content Agency, LLC.

Read part 1 of this article on Seniors Guide: Top 10 Countries for Retiring Overseas