Showing posts with label problems in living overseas. Show all posts
Showing posts with label problems in living overseas. Show all posts

Thursday, February 6, 2014

Problems in Retiring Abroad

Have you narrowed down your retirement options, yet?  Many Baby Boomers are unsure whether they would be better off remaining in the United States or moving to another country.  Moving to another country is an easier choice if you have relatives who live in that country.  However, if you do not have any connections, making a move to a foreign location can be more challenging.

Finances continue to drive the desire to live in a less expensive nation.  Unfortunately, the majority of Baby Boomers today can look forward to very low Social Security benefits that will be supplemented with only a small amount of income from their retirement savings.  When low income is combined with the high cost of living in many parts of the United States, an ever-growing number of Americans are choosing to move overseas to places like San Miguel de Allende, pictured here.  Many foreign countries can seem like paradise to cash-strapped Americans.

Improvements in medical tourism and access to modern conveniences are also fueling the increasing number of ex-patriots who are retiring overseas.  This blog has included a number of articles about the appeal of a variety of locations.  However, in order to paint a balanced picture, there are some specific problems that Americans need to consider before they make their final decision.

Possible Problems When Retiring Abroad

*  Something as simple as having goods shipped to you may be much more difficult when living in a foreign country.  One of our daughter's friends moved to Costa Rica to teach school about five years ago.  Since then, she has married a Costa Rican man and has decided to make that country her permanent residence.  Her first child is due in a few weeks and I asked her how to mail her some baby gifts.  Here is what she told me:  Do not have an American business, like Amazon, ship anything to her directly.  Do not send anything by UPS or Fed Ex; only use the U.S. Postal Service.  Do not put anything in a box; use a padded envelope, instead. In the customs paperwork, refer to the items as "used" rather than "new."   She said that her family has been trying to ship her things for years and, despite the fact she is married to a Costa Rican citizen, it has been very difficult for her to receive some of the items.  Even when she does, the cost of shipping is high if the item is very large.  In addition, when there is a problem, the Costa Rican mail service will not notify her about it.

In other words, you will be far better off if you are willing to make nearly all your purchases locally.  This seems to be what most foreign countries prefer.

*  Another issue that arises when living abroad is the fact that the cost-of-living in some other countries can be as high, or higher, as living in the United States.  If you are moving outside the U.S. as a way to save money, then scratch most major cities in Europe off your list, as well as Australia and New Zealand.

*  No matter where you decide to live abroad, you are likely to have some expenses that you would not incur if you remained in the U.S.  For example, anytime you decide to visit the United States, the cost of travel can be quite expensive.  In addition, while you can get your Social Security in other countries, you are not eligible to receive Medicare.  You have to buy medical insurance in your new country.

*  Another issue to consider is that the cheaper the country, the poorer the country.  This may mean increased crime and fewer conveniences.  For example, the young teacher and her husband, whom I mentioned earlier, live a very modest lifestyle in Costa Rica.  None-the-less, their apartment has been robbed and they have lost items such as television sets and computers. The State Department often warns Americans living overseas to exercise caution and avoid certain areas.  This is good advice, no matter how comfortable you feel in the area around your new residence.

*  If your goal is live inexpensively in another country, you must adapt to that country.  That means eating the types of foods that the locals eat, living in similar housing, doing without cable TV, etc.  Of course, most countries do have subdivisions that are geared towards Americans with larger than average homes, two-car garages, air conditioning, cable television, etc.  However, if you want those types of amenities, expect to pay American prices ... and sometimes more.

*  Depending on where you choose to live, there are other inconveniences you may experience, as well.  You may need to learn a new language and new monetary system.  The legal system and tax codes may be confusing to you.  You may also have fewer rights than people who are citizens of that country ... for example, you may not be able to own property or it may be more difficult for you to work or start a business.

While many American believe that moving to a foreign country will be a dream, other Americans have discovered that it can be a nightmare if they have not prepared properly.  Make sure you visit in advance and speak to Americans who have gone before you.  Meet with an immigration attorney and a CPA to discuss any laws and rules that could have an affect on you.  Have a real estate agent show you some properties for sale or rent, so you know what to expect, both in price and quality.  You are less likely to be surprised if you are well-prepared.

If you are still interested in learning more about retiring in a foreign country, check out the "Retire Overseas" tab at the top of this blog.  That is the section where you will find links to more information about popular retirement destinations.

Use the other tabs to find links to additional articles about the best places to retire in the United States, family relationships after retirement, healthcare issues, and financial planning.

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