Retiring Overseas? A Few Things To Think About First
Your fast approaching retirement age, but your retirement nest egg just isn't what it used to be
. Neither the stock market, nor the real estate market has been kind to you, and now you are starting to wonder if you can retire at all. You've heard some of your friends and neighbors talk about retiring overseas and you are starting to become intrigued. Retirement overseas has a strong appeal, in most cases it can mean the difference in retiring now in a foreign country, or working several more years to retire in the United States. Before you get too caught up envisioning yourself on a beautiful white beach enjoying umbrella drinks, make sure you think it through and really do your research. Here are some questions to get you started.
First off, it is common knowledge that the cost of living overseas is cheaper than in the United States. Your money will go much farther in Mexico, The Philippines, Costa Rica and Ecuador, to name a few, than it will in the US. Panama is especially kind to retirees, offering 50% discounts on entertainment and movie tickets, 30% to 50% discounts on hotels, 15% off dental care and 10% off prescriptions to name just a few. But what type of living will you do? Do you speak the local language? Are you willing to invest the time learning to speak it fluently? If not, this can seriously limit your ability to truly become part of your new community. It may limit you to only the expatriate community for friends and social activities. While this isn't bad, you may not feel comfortable taking advantage of entertainment options (even at 50% discounts) nor feel entirely comfortable not being able to communicate fully with your doctor. In that case, the savings doesn't really help you at all.
You really can't stand the weather where you live now. The cold is just too much for you to take. You need the warmth of the tropics. With the tropics comes humidity. Many retirees who moved to Mexico or Panama for the beautiful beaches find themselves spending a few of the hottest months, not to mention hurricane season, back in the United States. Since a majority sold their property here, to pay for that new beach house, they are at the mercy of family and friends for a place to stay or end up renting a short term apartment. That doesn't mean you have to give up your dream completely. It could be as simple as retiring in the mountains instead of on the beach. Either way, before you commit, be realistic about what type of weather you and your spouse can accept and enjoy.
How close emotionally are you to your family? Many seniors move to retirement communities, or to warmer parts of the United States, or out of the country, never exactly realizing what that will mean as far as their friends and families. Do you have grandchildren you will miss? It's one thing to miss a school play; it's another to miss your grandchildren's birthdays. What about the holidays, such as Thanksgiving and Christmas? Can your children come to you or do you need to go to them? At first the travel sounds easy, who wouldn't want to come lie on a beach in Mexico in December? But in reality, your son or daughter may not be enthused about taking their small children on a long plane ride outside the United States. You may end up going to them. If so, be sure to include the costs of international flights, possibly a few times a year, into your retirement budget. Also, look for a country that is close to the US and a city that has several international flights each day.
Finally, look further into your retirement, way down the road, when you or your spouse's health starts to fail. Your children are back in the US, and outside the expatriate community, you really haven't developed a good support system. Who will you trust to look after your financial affairs? Who will you trust to look after you if you become ill or incapacitated? Will you have to move back to the US? If so, where will you go?
These questions are meant to scare you, or even talk you out of retiring to your dream destination. They are simply meant to remind you that there are more things to think about than white beaches, cheaper beer, and lower doctor bills. Retirement isn't all about saving money, it's also about living your life, with your family and friends enjoying the good times.
by: Dan BeDell
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