Retirement should be a time to kick back and enjoy the rewards of your hard work. Unfortunately, for many retirees in America, the high cost of living can put a damper on your plans for an enjoyable retirement. Fortunately, there is a solution: how moving abroad can save you money.
Moving abroad during retirement can be a great way to save money, from lower living costs to tax breaks and incentives. Here are some of the primary ways you can benefit financially by moving abroad:
Lower Cost of Living
One major advantage to moving abroad during retirement is the lower cost of living. Many countries provide lower living expenses than the United States, especially when it comes to housing, food and healthcare services. This makes moving abroad an attractive option for many retirees.
For instance: today I went shopping at a mercado and a bakery. I purchased a large head of lettuce, a hunk of soft cheese, 2 green peppers, an onion, a carrot, 3 bananas, 1 avocado, and 2 pastries. These cost me $4.64.USD.
Some countries will offer you lower apartment rental or home purchase, reduced utility costs, entertainment and restaurant charges, hotel expenses, professional and technical charges, as well as bank and mortgage charges. These vary from country to country, so will need to do your due diligence.
Numbeo, a website that compares the cost of living between countries, indicates that Ecuador offers residents an affordable living alternative at 57% lower cost than in the United States. Thailand and Portugal both boast lower cost-of-living estimates at 43% and 31% respectively.
By retiring to a country with lower costs of living, you can maximize your retirement funds and enjoy an enhanced quality of life.
Healthcare Cost Savings
Healthcare costs for retirees can be a major concern, but many countries provide healthcare systems that are both cost-effective and high quality. Retirees who move to countries with good healthcare systems tend to save money on medical bills. I recently spend 3 days in the hospital. The charge, along with prescriptions, came to $1,800 USD for a simple procedure.
International Living states that retirees moving to Costa Rica can expect to pay around $50 per month for healthcare coverage. Likewise, Mexican retirees pay as little as $300 annually for healthcare coverage. These are two of the lowest healthcare charges. Other countries charge more but they are still lower than most first-world countries. My monthly health care charge is $129.00 USD. There are cheaper sources of coverage, but I chose one where I could select my own doctor.
You may have lower costs on prescription medicines, doctor consultations and exams, dental work, eyeglasses and exams, and hospitalizations.
In addition to lower healthcare costs, some countries also provide high-quality services. For instance, International Living recently conducted a study which revealed France as having the best healthcare system worldwide.
Tax Savings
Depending on where you retire, you may be eligible for tax breaks and incentives tailored toward retirees. For instance, some countries provide exemptions to foreign retirees who bring in a certain amount of income.
Portugal is one country offering tax breaks to retirees. According to International Living, those who move there and meet certain criteria can take advantage of a 10-year tax holiday on foreign income – including pension income – beginning after they retire.
I would recommend double checking on Portugal. The country has received so many expats that it is beginning to put up road blocks to stem this immigration.
In Malaysia, retirees who earn a certain amount of income can take advantage of a tax rate reduction of 10% on the first RM100,000 [$22,708.00] earned. Other countries have adopted a territorial tax system where you are taxed only for income earned outside the country. In the Western Hemisphere, these include Canada, Panamá, Costa Rica, and the Bahamas. Many more European countries also will not charge you for income earned outside their country. Many countries also impose no tax on income earned up to a certain amount. You will not face double taxation.
Cheaper Travel
Retirees may find that living abroad makes your travel more affordable, with increased opportunities to visit nearby countries or explore your new region at lower costs than you have experienced in your home country. You may be offered reductions on all transportation within your adopted country, and you may receive reduced ticket prices for airline travel to other countries. Panamá offers a 25% reduction on all transportation costs, while Ecuador offers a 50% savings. Travelling back to visit family and friends becomes more affordable with these benefits.
For instance, retirees living in Europe can easily travel to nearby countries by train or bus at much cheaper costs than air travel from the United States. Likewise, retirees living in Southeast Asia can take advantage of low-cost airlines to explore their region.
Depending on where you reside, activities within a region may be cheaper than those found within the United States.
Cost of Services
As a retiree, you may discover that home cleaning, cooking, and landscaping are more affordable in your new country. This could be especially advantageous for retirees who want to live a comfortable lifestyle without having to do all the work themselves.
In many countries in Southeast Asia, retirees often hire a maid or cleaning service to keep their home tidy and spotless. Likewise, Latin Americans frequently employ gardeners or landscapers for yard upkeep. I employ a cleaning lady for $15.00 USD once a month (her usual rate is $12.50 per half-day).
Conclusion
Overall, moving abroad during retirement can be a wise financial choice if you wish to maximize your retirement funds. However, it’s essential that you research and comprehend all costs and requirements associated with moving before making your final decision. This could be the best decision you ever made.
Fact: To save money, avoid shipping large items like furniture or vehicles; you’re not likely to need either one
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