Buying Real Estate In Retirement

Rent-Free Retirement

Nov. 5, 2014, Paris, France: 10 questions to ask when shopping for real estate for retirement overseas...

Dear Live and Invest Overseas Reader,

Buying real estate overseas is fundamentally about diversification. This is true whether you buy for investment or for retirement and argues in favor of buying for retirement rather than renting. Buying your new retirement residence overseas means moving money out of the United States and putting it into another market and, potentially, another currency.

Moving all your money out of the States and into a new retirement residence overseas doesn't alone bring you the diversification you should be seeking right now. However, using some of your capital to purchase a retirement residence in the place where you want to live and putting other of your capital to work in another market (that perhaps uses a different currency) gets you not only diversification but also what amounts to a rent-free retirement.

Another advantage of buying your retirement residence overseas rather than renting it is that it helps you to "take the plunge." It allows you to move your life forward, unequivocally, embracing the new adventure. Many who rent before they buy do so to be able to maintain a property back home, "just in case." While this can be sensible, it's also an anchor, a drag. It can divide your attention and keep you looking backward instead of ahead to your new life. Keeping one foot on the pier and the other on the departing boat can land you in the drink. You may remain only partially committed, which will be a handicap.

The bottom line for the retiree-buyer, is to follow your instincts, not only with regards to what to buy overseas but also when answering the question, should you buy at all? You know yourself, your motivations and preferences, and how well you've researched your chosen destination. You know your level of commitment, your level of readiness, and your tolerance for risk.

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Touring Chateaux In Northern France

On The Road Around Paris

Nov. 4, 2014, Paris, France: France is lousy with chateaux, from small and cozy to big and all-business.

Dear Live and Invest Overseas Reader,

An old friend always says: "Leave your worries where you board the plane."

So the deadlines, the off-schedule projects, the new ideas we just haven't been able to carve out time to pursue...they're all in Panama City.

I'm in Paris, where, thanks to the effects of jet lag, which seem to expand with my age, I couldn't remember my worries even if I wanted to. I'm floating through the day in a haze, cheerful but a little disoriented.

Lief is our resident navigator, but he's back home in Panama City, trying to make progress on some of those off-schedule projects. I'm traveling alone with our two children, who have assured me they'll handle everything. We're motoring around France just outside Paris according to a preset itinerary with meetings scheduled in a half-dozen different places related to two big agendas. First is a chateau hunt; we're shopping for a venue for our daughter's wedding next summer. Second is a meeting, which we had this morning, with the admissions director for the school from which Jackson hopes to graduate in two-and-a-half years.

Kaitlin is driving; Jackson is manning the GPS.

I've been relegated to the backseat of our rented Peugeot, instructed to sit back, enjoy the passing scenery, and keep my comments to myself. I'm trying to avoid acknowledging the "Driving Miss Daisy" inferences.

"Do you know this guy?" Jackson asks Kaitlin as he's programming our next destination into the GPS, referring to the song that's just started playing on the radio.

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El Valle De Anton, Panama, Is A Good Choice For Healthy Retirement

Quiet, Healthy Retirement In
Panama's Hidden Corner

Nov. 3, 2014, El Valle de Anton, Panama: El Valle de Anton, Panama, in the hills outside Panama City, is a top choice in Panama for quiet, peaceful, healthy living.

Dear Live and Invest Overseas Reader,

Nestled within the confines of an extinct volcanic crater and overlooked by the Sleeping Indian and other cloud-capped mountains about 75 miles west of Panama City, Panama, lies the sleepy market town of El Valle de Anton.

As you climb the hill from the Pan-American Highway to reach El Valle, as it's known among the locals, you pass through a series of landscapes, each greener than the one before. The base of the crater is very close to the watershed. You can dig anywhere in the valley and reach water in only a few feet, which accounts for the lushness of the countryside.

El Valle is known for its flora, for its climate (which, thanks to the slight elevation, is noticeably more comfortable than that back down at sea level in Panama City), and its hot springs. These mineral pools, serviced by an underground river heated by magma from a tiny fracture deep in the subterranean rock, dot the crater floor, making El Valle a go-to place for health tourists who make the short trip to El Valle to recuperate after undergoing medical treatment in Panama City hospitals.

Among Panamanians, El Valle is something of as a spiritual mecca, a place to come to restore and reconnect with one's soul.

El Valle town and environs are home to a community of some 6,000 full-time residents that expands a bit on weekends and holidays. The community has grown over thousands of years from a collection of tiny villages centered around a local market that remains today a center of activity for the region. Many of Panama's oldest families own second homes in this cool and healthy mountain spot, making the hour-and-a-half trip out from the capital as often as possible.

El Valle continues to expand while sticking to its roots as a rural mountain escape. Services and amenities have expanded and improved in the past few years. Today, the quiet life in El Valle is supported by a mall, a commercial center, and a big U.S.-style grocery store about a half-hour's drive away.

The healing hot springs are open to the public. These 100-degree waters are rich with sodium, potassium, calcium, magnesium, sulfur, copper, and zinc and are said to heal and soothe the skin, to relieve aching bones and muscles, and generally to promote health and even longevity.

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Planning For The Next Stage Of Life

Next-Stagers With A Plan

Nov. 2, 2014, Paris, France: Laying the groundwork for retirement

Dear Live and Invest Overseas Reader,

Overnight, I traveled, with my children, from Panama City to Paris. Not a bad trip now thanks to Air France's new direct-flight schedule. In Paris for the week, we have several agendas, some personal, some business, and one that has reminded Lief and me that we are now two-and-a-half years out from flipping the switch to our long-term plan.

For the past 17 years, Lief and I have been identifying and then positioning pieces of our eventual "retirement." We don't plan ever to retire, not in the conventional sense. What would we do with ourselves if we didn't get up each morning and draft a dispatch to you, dear reader?

For us, retirement will be transitioning to what for us qualifies as the ultimate lifestyle—one of perpetual motion. We like to move around, and we appreciate change and contrast. As parents of school-aged children, our moving around has been dictated, all these years, by school calendars. We've been based in one place, where our children have gone to school—first Ireland, then Paris, now Panama City—and we've planned our travels around their breaks.

When our son, Jackson, now 14, graduates high school, then Lief and I will be able to come and go as we like. We are now two-and-a-half years away from that event. For me, the realization is bittersweet. Sure, it'll be nice to be able to hit the road when we want, to wander where we want, as often as we want, and to stay in each place as long as we'd like. On the other hand, I admit that I'm not looking forward to the day our petit dernier (little last one) walks out the door and into the world.

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How FATCA Has Changed The World Of Offshore Banking

Global Banking In Our Post-FATCA World

Oct. 31, 2014, Belize City, Belize: FATCA regulations are playing out, and banks around the world are scrambling to become compliant.

Dear Live and Invest Overseas Reader,

"'Knock three times and ask for Roscoe.'

"That's what offshore banking used to be," Peter Zipper, an offshore banker with more than three decades of experience, explained to the crowd in attendance at last week's Global Asset Protection and Wealth Summit in Belize.

"But those days are over," Peter continued.

"In 1999, there was a global banking conference, which I attended, during which the world of offshore banking was changed dramatically. One specific outcome of that convention, for example, was the end of the numbered account. Ever since, if you want to bank with Roscoe, you've got to reference your account name," Peter assured the group.

The offshore banking industry is right now experiencing another dramatic upending, this time not in the interest of cleaning up banking dumps but with the clear and straightforward agenda to track the movement of money around the world more tightly and to tax every possible dollar along the way.

July of this year was the deadline for banks around the world to begin complying with IRS FATCA regulations or risk U.S. dollar transfers to their bank having 30% withheld by the sending bank. Come July, however, neither the IRS nor the global banking industry was in a position to meet FATCA administration requirements, so the compliance regulations have been loosened to allow everybody more time to continue working through the associated red tape. Banks have been signing up for their Global Intermediary Identification Numbers (GIIN); many have received them but not all. During this time of transition, compliant banks are to maintain the IRS-required information to do with money transfers and account holders, but they don't have to begin sending this information to the IRS until next year.

"Which banks won't comply?" Lief Simon asked the audience at the conference.

"That is," Lief continued, "maybe you're thinking that you'd like to identify those banks that don't intend to comply with IRS regs and do business with them alone?

"That's not a practical strategy," Lief explained. "A noncompliant bank will have that 30% withholding yoke on it, meaning it's going to be really expensive to do business with a noncompliant bank. In other words, any bank that wants to deal in U.S. dollars will be compliant. I'm not sure which banks that fact leaves out, but I'm guessing you aren't going to be able to conduct whatever business you want to conduct through them.

"One way for a bank to comply with FATCA rules," Lief said, "is to have no U.S. account-holders. A number of banks around the world are going this route, but not all, of course, and the American looking to diversify his banking offshore still has good options."

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Kathleen Peddicord

Kathleen Peddicord is the founder of the Live and Invest Overseas publishing group. With more than 25 years experience covering this beat, Kathleen reports daily on current opportunities for living, retiring, and investing overseas in her free e-letter.

Her book, How To Retire Overseas—Everything You Need To Know To Live Well Abroad For Less, was recently released by Penguin Books.

Read more here.

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