If You’re Planning to Retire Abroad, You Should Remember THESE Things
Over 10,000 Americans retire daily, and as baby boomers age, this trend is expected to continue for a long time. However, the cost of living in the United States soars high and a decent retirement income is cruelly unattainable for most retirees. Only a few retirees are able to save some money. A family’s cost of living in most American cities exceeds $40,000 annually and forces many retirees to move abroad to benefit from reduced living costs. Almost 700,000 American retirees live abroad. Planning is essential before moving anywhere, to a new culture and far from home, as under:
Different living standards
We take Wi-Fi, social services and 24-hour stores for granted while the Internet is slow and unreliable in plenty of developing countries. A majority of chain stores are local, and simple social services take forever to complete. One has to adjust to a slower life and simpler living standards.
Learning new languages
Americans are genrally uni-lingual and English may not be useful if you move someplace where it is rarely spoken. Learning local languages enables you to be independent and cope with emergencies. Refusing to learn new languages hinders your ability to adjust locally.
You also must understand unspoken new social norms, body language, and mannerisms. Women may have an inferior status and intense noise and air pollution, a daily problem. Make contact with locals and research before you leave, if possible. Also medical facilities may be poor.
Many retirees opt for Southeast Asia and this area in Asia has a tropical climate, scorching-hot for six months and humid and wet the other half with frequent droughts, flooding and cyclones. Factor in weather conditions before committing your post-retirement years to a new distant country.
Political turmoil and safety
Petty theft, dangerous street crimes and mass poverty are rampant in many developing countries. Some areas have serious kidnapping threats. As a foreigner, you must remain ever-alert in countries with social unrest, severe political instability, and resentment of Westerners/ affluent people.
Increase in Taxes
You pay taxes as an American even if living abroad. Consult a financial advisor for understanding tax obligations prior to departure. If opening foreign bank accounts, buying property or starting a business, you are liable for double taxation in USA and your adopted country.
Residency visas are easier to obtain for US citizens but are costly and awareness about laws in the adopted country is essential. You may have to pay thousands of dollars annually in residency processing costs/ renewals.
In a foreign country you follow local laws even after retaining your sovereign citizenship. If you break laws or get into legal trouble, you abide by the adopted country’s legal system as a de facto citizen.
More than 25% of the world’s population lacks access to potable water. The country of choice may not have the necessary bureaucratic infrastructure, or even the political will required to sanitize water. You may have to buy water regularly for drinking or cleaning needs.
Even with cheap flights during off-peak tourist seasons, flying home regularly is expensive for those with retirement incomes. With large families left behind, you may not see them for years. Make sure you factor in harsh realities before leaving behind your extended family. Take a two month test trip before finally deciding to leave.
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