There are several reasons you might want to retire outside the US. Maybe you’d like to take advantage of a lower cost of living. Maybe you’d like to try a different lifestyle—spend your life on a Costa Rican beach, for example. Maybe you’d like to make a home base from which to explore Europe or South America; or live in a different culture, like you’d find in a rural French village. Or maybe you just went on vacation and thought, “Wow. I’d love to retire here.” If you’re seriously considering retiring outside the US, I suggest you consider the following concerns—and read on for the one tip that could save your bacon (and your retirement).

In my opinion, the first question to ask is: What medical facilities and infrastructure does your retirement dream town have? When you are of a certain age (usually the case with retirees), it’s important to have medical facilities close by in case you need them.

Secondly, I’d look at the exchange rate. You might not think much about it—after all, we can travel all over America using the dollar. But if you retire outside the US, the exchange rate could work against you. When the dollar falls or rises, your purchasing power in your new foreign home falls or rises, too. A few years ago I was in Paris when the dollar fell and a grocery store clerk said, “Ha, ha. Your dollar is weak and you are poor now.” So consider the exchange rate in any decisions to move abroad.

The third consideration is the country’s banking system. You need to have access to cash. Remember Greece’s financial crisis a few years ago? They shut all the banks down. None of the ATM machines worked. There was no way to get money.

I’d also think about being away from family. It may seem like a great vacation for everyone to come to Belize to see Grandma and Grandpa, but visiting requires travel and money and time off. I’ve known people who gave up their overseas retirement homes because they missed their kids and grandkids.

And there’s a new issue that’s cropped up this year. Imagine if you retired outside the US last year and you wanted to come back to see family (or have them visit you). You might not have been allowed in the country due to COVID. Your kids might not be able to travel to your new home. You might be apart much longer than anticipated.

Finally, when considering living overseas, I suggest that you consider this one important tip: Don’t sell everything and move and then discover what life looks like in your new home abroad. Instead, I recommend you rent a place for three to six months. In that time or you’ll learn what it’s really like to live there. You may say, “Wow, it’s even better than I thought,” or, “It’s a great place to vacation but I don’t want to live here the rest of my life.” Rehearse living in your new retirement home before fully committing.

I believe practice is the best way to make an informed decision about whether to retire outside the US. And I believe the best way to make an informed decision about your financial life is to speak with a professional who considers your entire retirement life, including questions about retiring abroad. Contact us today.

Ken Moraif, CFP®, MBA
Senior Advisor at Retirement Planners of America

Author of Buy, Hold, and SELL!

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