Are you considering living abroad after retirement? If you are then you will likely have a lot of questions you will need answering before taking the plunge. In this article, I am going to set out what I feel are the most important issues and factors you need to take into consideration before making this most important decision.
So what, you may ask, makes me qualified to be offering you advice in this area?
Well, in the nearly thirty years we have been married, Colette and I have lived and worked in thirteen different countries around the world so we have learned, frequently the hard way, the do’s and don’ts of moving to, and living in, a foreign land. While we are still not, technically, retired, we are certainly of retirement age and so the things that are likely to be of concern to you, are also concerns to us.
For the past two years, we have been living very happily in Ecuador, South America, but are currently in the process of yet another move, this time to the Caribbean coast of the Yucatan Peninsula in Mexico. This means that all the things I am going to be talking about in this article are topical and very real to us right now.
So, let’s get started.
Cost of Living
The #1 factor influencing most retirees to move abroad is the cost of living and, more particularly, a desire to reduce their current cost of living and make their retirement income go further.
If you are currently living in the US, Canada, Western Europe, and even Australia or New Zealand, there is no doubt you can reduce your living expenses considerably by moving to the likes of Mexico, Central or South America, or South East Asia. In most of these places the overall savings can be 50% or more and which can be life-saving for someone trying to live on a low, fixed income. In most of these places, almost everything is less expensive including property (purchased or rented), food, healthcare, and transportation. The only frequent exceptions are ‘luxury’ items such as electronics and motor vehicles, usually because of high import duties.
We are currently living in the city center of Manta, here in Ecuador. We have a seventh floor, two bedroom/two bath, 1,000 square foot apartment right on the beach and our rent is $1,000.00 per month and this includes internet, cable TV and water. The equivalent in the US would likely cost us thousands more. Also, with living in the city center we don’t need a vehicle. If we can’t walk to where we want to go we take a taxi and can get to anywhere within the city for $3.00 or less, average $1.50. We pay under $40.00 for a full (hour long) consultation with our doctor and the other day we got our teeth checked and cleaned for $30.00.
How Far From ‘Home’ Are You Prepared to Be?
By “home” I mean your country and/or city of origin. This is an important consideration and one which many people, Colette and I included, don’t always pay enough attention to.
Many retirees won’t even contemplate living abroad because they are simply not prepared to move away from their family and friends. But, even if you are prepared to accept such separation it is unlikely, that you will want to be cut off completely and that you will want to return ‘home’ from time to time or at least be able to have family and friends come and visit you. Now, distance and travel cost becomes an issue, so if you fall within this category you would best look for a location that is not too distant. For someone in the US or Canada, Mexico would be a good option.
In fact, this is the main reason Colette and I are planning to move to Mexico. We have only one close family member left in the US and that’s Colette’s brother, but he is not in good physical health. A few months ago he fell and broke his leg and Colette had to fly to Phoenix, Arizona, to help out. It took three flights and nearly two days to get there from here in Manta. When we move to Mexico we will be a forty-minute drive from Cancun and then a single, four-hour flight, from Phoenix. In an emergency that will make a world of difference.
And don’t just think about distance because multiple connecting flights and airline scheduling can end up causing much more travel time than distance alone. Colette could have flown from Sydney, Australia, to Phoenix in much less time than it took her from Manta despite Sydney being over double the distance.
Climate and/or weather is another major reason retirees move abroad. Typically people move from cold and wet to warm and dry.
I originally hail from Wales, in the United Kingdom. It truly is a beautiful country but the weather is horrible. Although it doesn’t, it sometimes seems as though it rains there 365 days a year. So, for me, the closer to the equator the better and which is why Colette and I have spent a large part of the last thirty years in the Tropics, including several Caribbean islands as well as Belize, Hawaii, Saipan, and Palau.
But the Tropics are not for everyone. The warm tropical sun and even extreme humidity can feel wonderful for a couple of weeks but for 365 days a year? For many, that’s too much. Remember that the closer you get to the equator the less seasonal change you are going to experience and it’s going to seem like one long, hot, humid summer. I love it but it’s not for everyone.
Another weather factor to consider in the Tropics are hurricanes or cyclones (depending on whether you are north or south of the equator) as these can occur frequently in some areas, particularly in the eastern Caribbean and can be frightening and dangerous.
If you are looking for sunshine without the extreme heat or humidity (and no hurricanes) then consider looking for a location with elevation. Two good examples would be San Miguel De Allende in Mexico’s central highlands and Boquete in northern Panama.
So, make sure you do your homework so you know what to expect climatically and, ideally, try an extended stay (60-180 days) before committing fully to a move.
Residency and Immigration
While it may be difficult to obtain the right to work in any given country, it is a fact that that same country is likely going to be much more welcoming if you simply want to reside there. Sure there is still going to be a mountain of paperwork, the process will take time, and you will occasionally (maybe frequently) feel that the official(s) with who you are dealing are being deliberately obstructive, but, at the end of the day, you should take solace in the fact that they do really want you there.
And the best news is most of those countries particularly want retirees, so much so that they frequently have special programs in place that make the whole immigration process a lot easier for retirees than for other applicants.
Here are some of the things you will need to ascertain and/or consider before formally beginning the application process:
Where to Apply
In almost all cases this is going to be a simple question of whether you are required to apply, and be approved, before you enter the country or after you enter. In the majority of cases, the application is made before entry and at an Embassy or Consulate of the country you are planning to move to. For our pending move to Mexico, we are required to apply, in person, at the Mexican Embassy in Quito, the capital city of Ecuador where we are currently residing.
By contrast, when we applied for residency here in Ecuador we were required to do so in Ecuador so we originally entered the country on a regular tourist visa, began the process right away and then stayed (legally) until our resident visas were approved.
Applying for your visa after entering the country does have the advantage of getting you there more quickly. On the other hand, the stakes are higher because if there is a problem with your application (most commonly your supporting documents) you may have to return to your home country to sort it out. Worst case scenario, if your application is denied (it does happen) you will have to leave and all your costs of getting there will be wasted. So, if you do have to apply this way, you need to be certain, before you get there, that you fully understand the application process and have every single document that you will be required to produce. This information is usually available on the country’s government website but my best advice is to hire a local lawyer, or relocation consulting service, to advise you. We hired a lawyer and had no problems at all.
What Residency Options are Available
Most countries are going to offer a variety of residency options, based on the applicant’s legal status, and you will have to decide which is the most appropriate/best for you. As a retiree, many of those options simply won’t apply, but you may still have to decide, for example, and as we did for our move to Mexico, whether to apply for temporary residency or permanent residency. In that particular case, the requirements for temporary residency were far less stringent but it only lasts for twelve months and then you have to apply again. Also, in Mexico, with permanent residency, a retiree is permitted to work and that could be very significant, and of great appeal to someone on a low fixed income.
What are the Financial Requirements
The financial requirements will vary depending upon the type of residency you are applying for. As a retiree, you may have one or more of the following options available to you:
- meet a minimum income requirement
- meet a minimum bank balance requirement
- meet a minimum real estate investment requirement
- meet a minimum government investment requirement
The options available to you, as well as the actual amounts involved, are going to vary from country to country although, as a general rule, the lower the cost of living in the country the lower those amounts will be. They just want to see that you have sufficient financial resources to provide for your needs during your residency.
What Supporting Documents are Required
Every country will be different but the following are the most commonly required documents:
- Birth certificate (rare in my experience)
- Marriage certificate, particularly if one spouse is applying as a dependent of the other as opposed to each spouse applying independently
- Proof of the financials mentioned above
- Police records
- At least one copy of every original document
Not a huge list but, believe me, you need to get moving on these as quickly as possible because for many countries you will need to get both the original document (not the passport) and the copy apostilled in its country of origin and this can take weeks if not months. For example, Colette and I were married in Barbados and so, for our Mexico visa application we had to apply to the Barbados government for an apostilled copy of our marriage certificate. It took us three months to get that document. For our visa application for Ecuador, I had to apply for a police record from the UK. We were living in the US at the time and so it took six weeks for that document to arrive. But then we had to send it back to the UK to get it apostilled, another six weeks.
In addition to the apostille, you will most likely also have to get almost every document (again, excepting the passport) translated into the language of the country you are moving to.
How Long Will the Process Take
Once you have obtained all the required supporting documents and submitted your application it can take anything from a week or two to several months for the application to be processed. Our application for Ecuador took just short of three months and that was in line with the estimate given to us by our lawyer. Our application for Mexico should be much quicker. We travel to Quito at the end of this month and after we have completed our application at the Mexican Embassy there we are hopeful that our visas will be issued within a week.
Remember that any time estimate you are given will be on the assumption that all your supporting documents are in order.
Health and Healthcare
If you already have some health concerns then checking out the availability of appropriate medical facilities is going to be one of your foremost priorities but even if you are currently in excellent health don’t entirely overlook this important area. Accidents do, unfortunately, happen, and your health can, and typically does, change with time.
The good news is that many of the countries you are likely to be considering will have excellent medical facilities, many of which rival and in some even surpass those in the US and western Europe. Just remember that almost all of those facilities are going to be in the major cities so if you are considering a more rural/remote location be sure to check out how you are going to get to those medical facilities and how long it is going to take you to get there.
You also need to consider how you are going to pay for your healthcare. No matter from where you are moving it’s most likely that neither your government-sponsored healthcare (e.g. Medicare/Medicaid in the US, the National Health Service in the UK) nor your current private health insurance is going to be available to you and you will need to make alternative arrangements.
Most countries nowadays have some form of health insurance available but the cost can vary considerably, as can the coverage, so check it out carefully before you get here. In particular look at the provisions relating to pre-existing conditions. You will likely not actually be able to sign up until you get there but you should at least know what is available and how much it is going to cost you. Many countries (like Mexico) offer low cost, government-sponsored health coverage but while the medical care itself might be top notch there are frequently long wait times. In some countries, like Argentina, all the medical care provided at the many hospitals is free for citizens, residents and visitors alike but, again, there are frequently long wait times.
Rent or Buy (a home)?
Whether you rent or buy your new home is going to depend largely upon your financial situation. In purely economic terms, it’s probably best to buy. If you plan to buy then the first thing to check is whether it is actually possible to do this. Though comparatively rare, there are countries where only citizens of the country can own land. Palau in Micronesia is one such place.
If you do plan to buy then certainly wait until you reach your new location and then rent while you are looking. On our travels, we have repeatedly run into expats who have purchased a home following a single, brief house-hunting trip and some who have even purchased a home without having even visited the country. In almost all cases there was deep regret.
In fact, you would be best advised to plan on renting for the first twelve months or so anyway, that will give you a chance to be sure that your chosen region is the right one for you. Also, it will give you time to be sure the whole expat lifestyle is right for you. If you decide it isn’t, and to return to your home country, you will not want the additional headache of selling your home.
I am not aware of any country that requires fluency in the local language as a pre-condition of legal residency and if anyone reading this knows of such a place please let me know. It is, however, sometimes required for citizenship.
Having said that, my advice to anyone planning to live in a foreign country is to make every effort to get, at the very least, a basic knowledge of the local language. Even if, initially, it’s just enough to get by at the local stores it is going to pay dividends over time.
Particularly if this will be your first time actually living outside your home country, there is going to be a great temptation to find a place where there is an existing, English speaking, expat population. This is quite normal but at some point, you are hopefully going to start exploring your new home and being able to speak the local language is going to make your experience so much more enriching.
The best option is to get started before you move but if that is difficult or impossible then at least consider enrolling in a local language class in your new location. The trick is to not prevaricate but just get out and do it as soon as possible after arriving.
If learning a new language is really going to be a problem for you then you can always rely on local interpreters to help you with some of the more important issues you are likely going to have to deal with from time to time and where you will be at a real disadvantage without help. These could involve such things as medical visits, immigration queries, banking queries, and real estate matters.
If you have a pet that you will be bringing with you then you need to check out the countries pet policy as far in advance as possible, particularly if you have a pet that you would not consider leaving behind. This is because some pets are just not accepted in some countries. For instance, you cannot take a dog into Jamaica unless you are coming from the United Kingdom or the Republic of Ireland, while other countries have bans on certain dog breeds. Some countries may also have quarantine requirements.
Most countries will allow you to bring your pet(s) with you but there will likely be a lot of paperwork, mainly centering around the animal’s health. You will almost universally be required to produce a health certificate from a veterinarian and it has to be current, as in issued no more than seven to ten days before the day of entry into the country. Also, pay close attention to any requirements regarding the vet’s qualifications and whether the issued health certificate has to be countersigned, or certified, by any other body. For instance, when we brought our little dog to Ecuador we had to take our vet’s health certificate to the Department of Agriculture in the US.
You will also need to consider how your pet will travel to its new home. Small dogs and most cats will be allowed to travel with you in the cabin but larger dogs will have to fly as checked baggage. Check your airline’s pet policy well in advance as some don’t allow pets at all while others are only prepared to carry a very small number of pets at one time. Also, keep in mind the time of year you will be traveling, particularly if you are flying from, or have a connection in, an area that is very warm. Many airlines will not carry pets as checked baggage in the warmer summer months.
You are going to need to know how your income will be taxed both in your home country and the country you are moving to. Because of the huge variation in tax rules from country to country, this could mean anything from not having to pay taxes at all to finding yourself liable for taxes in both countries on the same income. It’s a complex subject and one where you will need expert advice from an accountant or other tax professional. I am simply flagging it here as something you need to look into before making a decision on where you are moving to.
Need to Work?
If your primary motive for moving abroad is to make your retirement income go further then you may also be pondering whether it might be possible to supplement that income in some way after you have moved.
A residency visa, as distinct from a work visa, frequently will not allow you to work but there are exceptions. As I mentioned previously, in Mexico a retiree who has been granted permanent residency does have the right to work and all that’s required is to simply notify the local social security office. So, if this is something you might want to consider then make sure you look carefully at the terms and conditions that will come with your visa.
Another option is to work online. You can usually get started for minimal cost and it’s something you can do from anywhere provided you have a computer and an internet connection. You might be surprised by the variety of opportunities that are available, just be careful to steer clear of those get rich quick schemes, most of which are scams anyway. For some legitimate ideas for what you can do online, you should read Colette’s article, Money Making Ideas for Retirees.
Colette and I supplement our retirement income by working online in Affiliate Marketing.
Living abroad after retirement can bring with it many great benefits including a lower cost of living and the opportunity to have the exotic and romantic lifestyle you may have always dreamed about. But it’s definitely not for everyone. Separation from friends and family can become a real issue, particularly if you don’t have the resources to return to your home country from time to time. The opportunity to explore a new land and culture will be exciting to some people but frightening to others, particularly if a new language is involved. So it’s most definitely not a decision to be taken lightly.
If you are contemplating such a move then I strongly recommend that once you have settled on a location, but before you commit to the move, you visit the place for an extended stay of at least thirty days and up to ninety days if possible. Do this even if you have previously vacationed because there is a world of difference between seeing a place on vacation and actually living there. If that works out then you are ready to go.
In this article, I have covered the issues which I feel are important to consider in deciding whether living abroad after retirement would be a good option for you. If you are seriously considering such a move then I am sure you will have many more questions which I will be happy to answer. You can leave them in the comments box below or, if you wish to keep them private, you can send me a message from our Contact Us page.
Have you already tried living abroad? If you have then your experience would definitely be of interest to others contemplating such a move so please describe that experience in the comments box.
Thank you for reading this article and if you decide to give living abroad a try, I wish you every success and happiness.