Many expats move abroad on short-term work assignments, others move back if their relationship status changes, and for some, a move abroad proves to be not what they expected and they move on or move home.
However, for some, a move abroad is indeed a lifetime decision. If you’re already living abroad and you want to stay in to retirement there are some considerations you need to cover. In this article we’ll look at what you need to know if you want to retire abroad and you’re already an expat – whether you want to stay in your current nation or move again to another country.
As you know exactly what it’s like to change country I’m not going to go back to basics about packing up and saying goodbye before moving to a new nation. But issues to cover will include financial considerations, visas, residency and citizenship considerations, as well as realising lifestyle expectations. What’s more it’s important to think about property, laws of succession and health.
1) Are You Allowed to Retire Abroad?
If you love living and working in your current country can you stay?
If you’re only allowed to remain in your present nation because you’re on a work visa, sponsored by an employer for example, what are your options?
This applies to expats in locations like Dubai which kicks you out when you want to retire! Exceptions exist for those married to a local Emirati, but that’s quite a significant step to take just to remain living in Dubai!
Therefore you need to be sure you can remain living in your current nation if that’s your ideal. Alternatively you need to look in to the visa requirements of whichever country you want to retire to, and whether you need to relocate there prior to retirement, or whether they have a specific retirement visa class for example.
Some nations have visa categories for retirees that offer tax breaks etc., but qualification criteria can include having to prove a certain amount of guaranteed income for example.
Do your research so that you’re sure you can live where you want to live in retirement.
2) Time to Talk About Your Pension
In terms of your retirement income, what’s its source? If it’s UK based or based in a country other than the one in which you’re going to be retiring, how are you going to access it?
Should you move your pension overseas into a qualifying recognised overseas pension scheme (QROPS)?
Are there ways to maximise your retirement income?
Will you need a UK bank account to receive pension income from the UK? These are all considerations you need to cover before you actually hit retirement.
Seeking qualified financial advice that takes into consideration your current status, all your assets, your chosen nation for retirement, your tax status etc., will be important.
3) Currency Concerns
Another consideration is the currency in which you’ll be transacting day to day, and the originating currency of your retirement income.
Even small movements in a currency’s value compared to another one can make a significant difference in spending power over the longer–term. Therefore think about whether it will make sense to move your pension to another country/another currency, or restructure any investments you have to balance currency risk, and/or plan and forward fix rates for any regular transfers you may be making.
4) Property Matters
Real estate can be the biggest headache for those wanting to retire abroad. If you’re already settled abroad and happy in the home you have, great!
If you have real estate in the UK still should you sell it to enable your retirement? When is the right time to put it on the market?
The housing market in the UK can be truly volatile – but right now it’s fairly healthy – however, attempting to call the market is dangerous!
If you know you need to sell a property anywhere in the world to realise your retirement plans it rarely makes sense to leave it until the last minute to do so because you could fail to sell and have to put your plans on hold.
If you’re moving to another nation in retirement have you looked at their property market? Are you wise to buy or better off renting?
As an expat already you’ll know only too well that it makes sense to rent before buying…but perhaps you’re going to be moving to a country where purchasing will never make sense.
Considerations to include when making a choice are laws of succession and whether a property will be able to pass to your chosen beneficiary according to the laws in your new nation, taxation of real estate in that country, the vagaries of the market, and whether you would ever be able to sell up if you needed to, and property maintenance costs that could eat into a restricted income in retirement.
Finally on the point of property, a house purchase takes up a massive lump sum obviously, and/or requires a mortgage to finance it. Mortgages are harder to come by the older we get – and in some countries mortgages are unavailable, or unavailable to foreign citizens or those with limited financial history.
Make sure any plans you have are realisable in your new nation before committing to a specific path.
5) Realising Lifestyle Aspirations
As an expat already you’ll know that some who move abroad have unrealistic ambitions for their new life, and they either have to significantly adjust their expectations or go back home!
Therefore, chances are you will have a realistic idea about what your life will be like in your chosen retirement destination, (especially if you’re staying put in your current country), but the same sort of realism needs to be applied to your lifestyle in retirement.
It’s hard to imagine what it will be like to have so much time on one’s hands and no professional obligations to worry about all day long…
But make sure your plans and ambitions can be enjoyed based on the income you will have and the cost of living in your chosen nation.
I.e., make sure you’re carefully considerate of how much you will have as a monthly or annual income in retirement, and whether that can afford you the lifestyle you want.
Finally on this point, can your chosen country actually provide you with the quality of life you want in retirement?
Think not only about all the positive things – like a golf course to play on every day or restaurants to wine and dine your friends in – but about the facilities and amenities you might need for good health and long-term happiness.
Are healthcare services available to the standard you expect (and may need) are they affordable and accessible to you as a foreign resident?
Just because you’re an expat already that doesn’t mean your life will be a smooth transition if you retire abroad. Just as if you’re a UK resident and retiring in Britain you of course still need to think about finances, property, estate planning, healthcare etc.
I hope the above gives you some pointers to begin planning this exciting new phase of your life overseas.