Retiring Overseas?

The Wall Street Journal reports that twice as many Americans are choosing to retire overseas now, compared with a decade ago.


Most of the reasons are financial. The dollar goes further in Latin America or Australia than it does in the United States, so your retirement funds may last longer in another country.

Other countries are also likely to be much cheaper than the U.S. in two areas that are often of concern to retirees: healthcare costs and property taxes.

Healthcare costs in the United States are so much higher than in many other nations that it is often cheaper to fly to Spain or Thailand for an operation than to have it in your home town in the U.S. A day in the hospital in the U.S., for example, averages $4,923.  In Spain, it’s $481. For older Americans who may anticipate a hip replacement, knowing that it costs three times as much in the United States as in Argentina can make Argentina appealing.

On the other hand, Medicare and Medicaid probably won’t cover you. If you’re used to the American health system, you might not care for national health; that’s not a consumer-driven service, so you may not get the level of service you’re used to. Do some research on the country you’re thinking about and make sure that health care differences will be a plus, not a minus.

Many retirees like the feeling of being outside the local drama. Others enjoy involving themselves in local charitable works. You may not feel as though you have a choice in the country where you grew up, but being an expatriate gives many people the feeling that they can choose how much to be concerned about politics, regional controversies, and even the local social scene. Retiring overseas can be relaxing.

At the same time, new technology helps to overcome one of the main reasons people haven’t wanted to leave the country during retirement in the past. With Skype and Facebook, you can keep in touch with your grandkids almost as easily from another country as from another state. An annual visit to your family in Arkansas might fit more easily into your budget if you live in Costa Rica than if you live in New Jersey.

If you think the life of an expat is for you, be sure to discuss it with your financial planner. The tax consequences may vary from one country to another, and your plans may affect just how much money you need for retirement.