Retirement abroad is more accessible than ever-and many Americans are looking to fill their golden years with overseas adventures. But moving abroad is a big step and requires considerable planning. Here are five things to consider before taking the leap.
Try an extended stay before the big move
"It's easy to fall in love with a city while on vacation, but life as a tourist is different from life as a local," said John Roland, partner and private wealth advisor with Northwestern Mutual's Beyond Financial Advisors in Oak Brook, Ill. "Consider conducting a trial run by staging an extended visit that may last a month or two. Depending on the destination, it may be possible to secure a tourist visa that lasts for a few months. That's usually enough time to get an impression of the pace, the weather, the local communities, and the cost of living."
Consider taxation and finances
Retirees may want to consult tax professionals in both the U.S. and in the retirement destination to understand how living in another country can impact their taxes. Some countries offer special visas to retirees that provide certain tax exemptions, but other countries may not offer any special benefits. A tax professional can help retirees understand their options and decide whether retiring abroad is the right move.
Many retirees aspiring to move overseas work with financial advisors to map out their financial plan. The financial advisor may be able to provide guidance about how to navigate currency conversions, property and income tax, investments, and more.
Think about assets and cost of living
Retirees will want to take stock of all their sources of funding and consider it along with costs of living in the country they're thinking about moving to. This includes retirement accounts, pensions, and investments. They may want to consider other sources of funding, such as the cash value of a permanent life insurance like whole life insurance or universal life insurance. Retirees can utilize the cash value for any reason. This can be helpful during market downturns when they may not want to sell investments. It can also help to manage taxes. Because navigating finances in a new country can be tricky, retirees may want to consult a financial advisor for guidance.
Look into healthcare options
Healthcare norms and processes can differ widely from one country to the next. "Aging may mean greater dependence on medical services, so it helps to look into healthcare costs, insurance protocols, and medical care accessibility before moving," said Roland. "Depending on healthcare concerns, it may be necessary to ensure that there are suitable care providers located close by. For instance, someone experiencing mobility issues may want to live close to a physical therapy center."
Carefully consider housing options
Some retirees may want to buy, others will favor renting-either way there are many factors to account for. The real estate market could be very different to what most Americans are used to. Not every country allows non-residents to purchase property, and the ones that do may have eligibility requirements. A local real estate agent may be able to provide up-to-date information regarding what's expected from retirees looking to buy property or rent long-term.
The primary purpose of permanent life insurance is to provide a death benefit. Using permanent life insurance accumulated value to supplement retirement income will reduce the death benefit and may affect other aspects of the policy.
Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company (NM) and its subsidiaries in Milwaukee, WI.
Source: Northwestern Mutual
Contact: Don Klein, 1-800-323-7033
See Campaign: https://www.northwesternmutual.com
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