Thursday, September 6, 2018

Retiring Overseass

Portugal, Lisbon, Porto, Harbor, Port  I am reaching a point where I am thinking of retiring since I've put in the required 20 years necessary.  I have a friend who retired to Thailand due to the lower cost there but he eventually returned to the United States.

I read that if you want your retirement money to last longer, go over seas but I'm not sure that would be a good thing because there are other factors one should keep in mind.  Factors we do not usually think of.

The biggest one I can think of has to do with distance.  When you retire overseas, you are usually a long airplane ride from your family. So if you want to visit them or they visit you, that costs.  You can't just hop into the car and drive a few hours or a couple days to get there.  If you don't mind being away from your family fine but I'm not sure I want to be that far away.

I'd also want to make sure the country has the type of medical care I'd need so I could get it.  For instance, do you have a cardiac problem so if you had a heart attack, could the local hospital and doctors give you proper treatment?  Can you get the insulin dependably should you need it?  I'm in good health but I'd want to make sure I had access to good medical treatment in that locality.  What about long term care should it be needed?  Can you find it there or would you have to return to the states?

It is highly recommended one rent rather than buy in a foreign locale because you might not be able to get a mortgage since you do not have regular income in the traditional sense. You'd have to tie up a chunk of your retirement monies to buy the place. In addition, you'd have to understand the contract which is probably in another language. 

Furthermore, investing in a house overseas means less flexibility should you need to leave suddenly or you want to move elsewhere. It is recommended that if you must buy, live in the area for at least a year before deciding to do buy so you know if you really, really want to settle in the area. 

Another thing is to keep most of your monies in the states because accounts in the United States are federally backed.  You can also use ATM machines to get cash if you end up in a place that uses mostly cash.  I know the next time I go to Germany, I need to have lots of cash because they prefer cash to credit cards.  When you have to use ATM's overseas make sure you are with an institution that refunds foreign ATM fees.

In addition, there are tons of headaches if you try to buy or sell investments  or try to deposit certain funds overseas.  Depositing 401(k) or IRA funds overseas can trigger a 10% withholding fee while one thing that is tax exempt in one place may not be in the United States.

Furthermore, you'll need to get credit cards that work in the country of your choice but which do not charge a foreign transaction fee.  This saves you money.  You also need to make sure you have medical coverage via a policy of some sort because Medicare will not work there.  The last thing to think about is you will still be required to pay United States Taxes if you are a United States citizen.  Often you will be able to deduct the taxes so you pay little or none but be aware of that policy.  Please check the last bit about taxes if you do decide to go overseas because tax rules change and this may no longer be the case at the time it is read.

Let me know what you think, I'd love to hear.  Have a great day.

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