By
Instead of enjoying one’s golden years in Arizona or
Florida, many dream of villas in Tuscany, or surf shacks in Nicaragua. But
while retiring abroad may not be entirely original, it does come with some
unique challenges. Do your homework before making the big leap, so you can
enjoy ex-pat life to its fullest.
Research your desired location
Seems obvious, right? And yet it isn’t
just about choosing the best surf spot or your favorite wine region. While many
countries are very welcoming to retiring expatriates, it is still a different
country. That means different laws and requirements for residents. For example,
are non-citizens allowed to purchase real estate? In Iceland, citizens of European Union (EU) member countries can buy without
restriction, but non-EU citizens have to receive government approval to
purchase.
One of the most important issues to
understand is medical insurance. Medicare, the U.S. government health insurance program for
people 65 and older, will not cover medical expenses in another country (there
are three very limited
circumstances in
which Medicare will reimburse such costs—for instance, if an emergency happened
in Canada while traveling between Alaska and the lower 48 states—but those
would not apply to someone who retires abroad).
You might be tempted, therefore, to stop
paying your Medicare Part B and Part D coverage premiums—but don’t do it if
there’s any chance of your returning to live stateside. Gaps in your Medicare
Part B and Part D coverage will result in higher premiums for the rest of your
life.
Additionally, countries that provide
health services to citizens might not provide those same services to
non-citizen residents. Retirees abroad might need to purchase local coverage,
the cost of which will vary widely based on one’s existing health and the
options available.
Visit the State Department website
The U.S. State Department is an
invaluable resource, with detailed information for travelers of all kinds. They also handle travel
alerts or warnings, with a searchable database of destinations that provides
detailed information about embassies, consular offices, trouble spots, visa
requirements, and lots more.
You’ll also find a detailed list of steps to take before you go. First on their list is
to “check visa and residency requirements.” Each country will require different
documentation, some, like Canada, even have financial reporting requirements. Detailed
questions about immigration status, visas, dual citizenship, and other more complex issues might require the
assistance of a qualified legal
professional.
The State Department also suggests
preparing for emergencies in part by staying connected. The Smart Traveler
Enrollment Program sets
up an automatic system for receiving information about travel or safety alerts
directly from the State Department. Enrollment also allows the department to
contact your family or friends—leaving contact information is important in the
event of an emergency. You’ll also want to leave a copy of your passport
biographic data page with a family member or a trusted advisor who is remaining
in the United States.
Get your finances (including your taxes and Social Security) in order
Retirement financial planning is important
whether your preferred destination is South Carolina or South America. But if
you choose to retire abroad, currency fluctuations can become a huge factor.
Many people choose foreign locales because of the destination’s lower cost of
living, but a change in exchange rates could impact that perceived value. A few
other considerations:
- Taxes Sadly, moving abroad doesn’t mean you get to take
a pass on your taxes. If you are a U.S. citizen, you are still required
and responsible for filing and paying your income, estate, and gift taxes,
whether you are in the United States or not. The IRS is very clear about this: “Your worldwide income
is subject to U.S. income tax, regardless of where you reside.”
- Social Security The SSA publishes a guide to help recipients understand and prepare for how
to receive and handle their payments outside of the United States. Social
Security is a particular concern for older Americans who choose to retire
abroad. Unlike Medicare, Social Security is an earned benefit that can be
paid to recipients living outside the country. But there are restrictions.
U.S. Treasury regulations prohibit the Social Security Administration
(SSA) from sending payments to some countries (North Korea, for example).
Meanwhile, some countries, like Azerbaijan and the other Caucus states,
carry general restrictions, but there are some available exceptions in
those regions.
- Estate Planning Before leaving, you should meet with an estate attorney to discuss any estate planning issues and
determine how such issues will be handled in the event of your death
abroad.
No comments:
Post a Comment