Retiring Abroad: Luxury Living Overseas

(Image by Loren Sztajer, via Flickr.com)

With 401(k) plans all over taking a dive and pensions largely a thing of the past, many people have given up dreams of retiring in luxury and started wondering if they can retire at all. However, one way to make your retirement dollars go further is to start looking abroad. Florida and Arizona aren't the only places where you can spend your golden years in luxury. In fact, if you've never done any international travel before, retiring overseas might be the perfect way to get some exposure to the rest of the world.

Research Locations

There are a number of factors to consider when looking into a place to retire abroad. Some of the most important considerations include:

• Price: To retire in luxury, you obviously want to find a place where the dollar goes far and the cost of living is lower than in the United States.
• Language: Do you speak the language? Do they speak English? If English isn't an official language, does it have a high level of penetration? You can get by with a phrasebook just about anywhere, so this doesn't have to be a deal breaker, but you definitely should consider the language implications.
• Political Climate: A country might be cheap, but if it has a history of turmoil or anti-Americanism, you should probably avoid it. It's worth researching religious and racial issues in each country as well. Again, these issues might not be a deal breaker, but you should be prepared.
• Weather: This is a big one for a lot of people. If you can deal with cold, you'll have a lot of options. If you want to retire somewhere warm, you have fewer options. Know what the weather is like before you pick up stakes.
• Ease of Expatriation: Some countries welcome American citizens with open arms. Others have lots of bureaucratic red-tape and hoops for you to jump through.
• Local Law: Remember that, when living abroad, you are subject to local law. This means you should research the law before you move anyway. Ignorance is never an excuse. Further, in some countries Americans may not own property, but they can lease it.

Modify Your Retirement Plans

Once you've picked a place to relocate, you need to begin planning your retirement accordingly. Remember, inflation can kick into overdrive anywhere, so you need to plan accordingly if you are looking into a place with a notoriously unstable economy. A number of retirement calculators exist online, allowing you to easily figure out how much you need to save to retire with a certain level of wealth. The only difference in figuring this when you plan to retire abroad is taking the local standard of living into account.

Getting Your Paperwork in Order

To move abroad always requires some degree of paperwork. You can find out what you need to know about moving to your specific country by visiting the U.S. State Department website. Note that when you live abroad, you are still required to file income tax in the United States. Not doing so can open you up to prosecution for tax evasion, and that's no way to spend your retirement. You are also not excused from your debts because you leave the United States, in particular debts owed due to back taxes.

Move!

Savings? Check. Paperwork? Check. Now all you need is a place to hang your hat. While your friends and family might have to make a long trip to see you, living in Argentina (for example) allows you to live in the lap of luxury on a shoestring budget. While picking up stakes and moving abroad isn't without its down sides (there's something about being a stranger in a strange land that some never quite get used to), the adventurous person--curious about the outside world-- might find it to be the perfect adventure for the winter of their life.