By Jessica Fu, The Seattle Times
The draw of retiring overseas can be tempting, especially in the face of stubbornly high costs of living throughout the country.
But before you go, experts recommend thorough research and planning. Retiring abroad comes with complications, including lifestyle changes, immigration hurdles and disruptions to health care coverage.
Here are a few critical considerations, according to people who help Americans move abroad.
Map out a long-term plan
Evaluate what moving abroad would mean for your entire life, not just the cost of daily living.
“You need to think about what’s important to you,” said Jennifer Stevens, executive editor of International Living, a magazine about retiring overseas. “What kind of access you’ll have to health care and what the lifestyle is going to be like.”
Beyond your own life, consider what moving overseas means for people you leave behind.
For those with older parents who need long-term care, that means having a plan and network to oversee and manage their well-being while you’re abroad.
It also means putting in place proper succession planning, expat adviser David Lesperance wrote in an email. He also suggested having medical and financial powers of attorney in place in case of emergencies.
As other countries have their own laws, professional advice should be sought and followed to avoid hidden pitfalls such as forced heirship rules,” he added, referring to laws that guarantee children a portion of an estate, regardless of what’s written in a will. “This is especially true for common law and same-sex couples.
Look at your finances
Americans who move abroad are still required to file U.S. taxes. Before setting out, experts recommend having an understanding of what your obligations will be to both your new home and your old one.
“What’s the tax planning I need to do? What’s the tax ramifications of that?” said Lesperance, listing the questions that expats have on their minds.
Experts also urge people to research the financial implications for their retirement income. While people collecting Social Security can do so abroad, some pension benefits can only be deposited into U.S. financial institutions. Make sure you can access your retirement income abroad before you leave.
Also be aware of the risk that exchange rates pose, said Alex Ingrim, founder of Liberty Atlantic Advisors, a financial advisory for expats. When your savings and retirement income are in U.S. dollars but you’re spending another currency, you’re vulnerable to the volatility of exchange rates.
Changing immigration pathways
Immigration laws in other countries, just like those in the U.S., are constantly in flux. Current retirement visa programs might be terminated in the future; others might be introduced in countries where they previously were none. But by large, migration policies trend toward becoming more restrictive over time, said Stevens, the editor of International Living.
“For someone who’s considering going abroad, whether for retirement or earlier, now is a really good time to do it,” she said.
That doesn’t mean you should rush out. Rather, just be prepared for the possibility that immigration pathways might change faster than your timelines and have backup plans.
Long-term, expats may have the opportunity to acquire citizenship in their new home country. That could come with its own advantages, as well as responsibilities, wrote Lesperance — all considerations to keep in mind.
Talk to an expert
Moving abroad is possible, but it’s a significantly smoother process if you have guidance from someone who understands the complexities of the decision.
In recent months, Ingrim, the financial adviser, has seen more interest from Americans who are fully committed to moving abroad, unlike in the past when more of his clients were curious but not set on the idea.
“We’ve spoken to numerous people that say, ‘I’m moving to Portugal in three weeks — what do I need to do to prepare?’” Ingrim said. “Three weeks is a really short amount of time.”
Enlisting an expert early in the process can help people get a comprehensive sense of what it takes to relocate an entire life to another country and how to make it happen.
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