The idea definitely has its merits: Move abroad to a beautiful place and live for a fraction of what it would cost to retire in the United States, especially in light of increasing life expectancies and costs of living. Mexico, Costa Rica, Panama, Spain, and Thailand are all popular retirement destinations for Americans not only because of their temperate climates, but also for their marginal costs when compared to the United States.
MARTINSVILLE, N.J., June 21, 2016 (GLOBE NEWSWIRE) — The idea definitely has its merits: Move abroad to a beautiful place and live for a fraction of what it would cost to retire in the United States, especially in light of increasing life expectancies and costs of living. Mexico, Costa Rica, Panama, Spain, and Thailand are all popular retirement destinations for Americans not only because of their temperate climates, but also for their marginal costs when compared to the United States.
Experts cite the Internet as a major catalyst for this trend, allowing folks considering the move to do more research and connect with expats who have already made the decision to spend their golden years in a foreign country. With that said, Ken Schapiro of Condor Capital Wealth Management still preaches the importance of actually taking an extended trip to the location in question to accurately assess whether it can be a viable option. That being said, more and more Americans are electing to ultimately move out of the country.
But before you decide to settle in San José, Costa Rica instead of San Jose, California, Schapiro suggests focusing on the following areas when deciding whether or not it is in your best interest to retire abroad.
Obviously, some places abroad might not enjoy the level of safety that you have become accustomed to in the United States. As retirement should be a time of relaxation with little added stress, the last thing you want to do is relocate to an area laden with crime and danger.
The U.S. Department of State also publishes safety information, so be sure to use this resource when beginning your assessment of the best place to move to. In general, be aware of the country’s political and socioeconomic conditions, as you should put off to moving to any potentially volatile areas. In the end, while no area can be completely crime-proof, the best course of action in regards to safety might just be reaching out to another American living in the specific area that you are considering a move to.
First and foremost, you want to confirm the quality of the medical care provided in the country you’re considering to retire in. If the quality passes your test, how would you pay for the care? Medicare and many American insurance policies do not cover treatments outside of the United States, though you may wish to inquire about a high-deductible policy for the major medical expenses.
Most likely, you will have to purchase an insurance plan native to the country or pay out-of-pocket for any medical expenses. While the quality of medical care abroad might be comparable to care here in the United States, even minor procedures have the potential to accumulate into significant bills. It is especially important for those with chronic health issues to research treatment costs that are most likely to impact them when making a move abroad.
Keep in mind that in order to be classified as a resident of another country, you have to maintain residence there for at least 330 days of the year. That said, even though foreign residents are not required to have health insurance as mandated by the Affordable Care Act, many expats choose to pay into Medicare so that they can come back into the United States for treatment if need be.
Even though English is spoken by people in most corners of the world, it is still in your best interest to have a basic proficiency in the country’s native language if it’s not English. Even if you are moving to the United Kingdom, there are likely to be quirks and certain differences that exist between different dialects. Remember that you are going to be living abroad, not going on an extended vacation. So, while little to no proficiency of the native language might be adequate for a vacation where you are likely to be catered to by English-speaking staff, such little command of the native language will hardly be enough when visiting the market to purchase groceries or taking a trip to the bank for a simple financial transaction.
Regardless of where you decide to move abroad, if you remain a U.S. Citizen and earn money, the tax man will still want his share from you. That said, for the 2015 tax year, the maximum exclusion went up to $100,800 per qualifying person. Note that this is completely independent to any local and federal taxes you may have to pay in the country that you move to. The only way you can get out of paying American taxes is if you renounce your American citizenship – something that a growing number of expats have been doing.
All-in-all, Schapiro notes that retiring abroad can definitely kick off an exciting new chapter in your life. Just be sure to thoroughly go over all of your own requirements and cross reference them with the location abroad that you are looking to retire in. Be sure to be thorough and deliberate with your decision-making process because the last thing you want is to be stressed out during retirement….or waste sufficient time and money to make the move abroad and then return because you didn’t fully do your homework in the first place.
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Condor Capital Wealth Management
Founded in 1988, Condor Capital Wealth Management is an employee-owned, SEC-registered investment advisor based in Martinsville, N.J. employing 15 professional and support staff. Since Condor is a fee-only investment management firm, its fees are based on portfolio size, not sales commissions or number of trades. For more information on Condor Capital Wealth Management, please visit www.condorcapital.com or call 732-356-7323.