11 Things You Must Know Before Retiring Overseas
As we begin this live-and-invest-overseas conversation, here are 11 things I’ve learned from the school of hard knocks after two international moves (and a third in process) with two kids and a decade of experience living and doing business outside the States.
1. The first step to any move abroad is to set your priorities and to be honest in the process.
What matters to you most? Evenings at the theater? Friends whose company you can enjoy in English? Cost of living? A reliable internet connection?
Don’t kid yourself. If you can’t imagine life without a Maytag washer and dryer, for example, you may need to rethink the entire proposition.
2. Make all decisions jointly with whomever you will make
Your spouse’s ideas about what he or she wants may shock you… and vice versa. Better to get them on the table sooner rather than later.
3. Recognize that no place is perfect.
No climate is ideal. No city is 100% crime-free. Manage your expectations.
4. Understand that no other country on earth is as convenient as the United States of America.
It goes well beyond how you wash your clothes. In many places, shops, banks, dry cleaners, and government offices close for lunch and call it quits for the day by 5 p.m. You can’t run errands on your lunch break… or on Sundays either.
In some countries, you pay utility bills in person. In the developing world (not only in Latin America and the Caribbean, but in emerging Europe, too), appointments and schedules are suggestions rather than firm commitments. And only a handful of real estate markets outside the States operate with Multiple Listing Services, meaning the search for your new home in Paradise likely will be… well… inefficient…
5. You’ve got to guard against leaving your good sense at the border… and never mix alcohol and property buying.
TWe call it “Margarita Madness.” It’s a syndrome that can set in shortly after your arrival in any sunny, sandy, tropical locale. The water’s emerald, the palms are swaying softly. That guy you just met in the bar downtown (the one who shared a couple of rum punches with you), he’s now driving you along the beach road bordering his development, pointing out where his clubhouse will be, where the marina will go, where your new home could be positioned.
Look at that view, he’ll urge you. Feel that breeze. Boy, it doesn’t get better than this. And, you know, we’ve got only two lots at this price remaining. A couple of buyers are expected in town tomorrow. I’d hate for you to miss out…
Would you buy a piece of real estate under those circumstances back home? A piece of property you’re seeing for the first time in a place where you’ve never been before?
You need to do more due diligence when investing in a piece of property in another country, not less.
6. There’s no such thing as the world’s top retirement haven, no one-size-fits-all Shangri-la.
The only one who can determine the best place for you to retire is you.
There are dozens of beautiful, affordable, friendly, safe, charming places where you could choose to spend time in “retirement.” It’s a question of what you’re looking for and of what’s most important to you (see #1 above).
7. Your U.S. health insurance won’t cover you once you leave U.S. soil.
Don’t worry, you have options, which we’ll detail in these dispatches over time.
8. Rent first.
Don’t buy a new home in paradise until you’ve tried that paradise on for size for six months or so. Even if the country turns out to be, indeed, your ideal retirement haven, maybe the city or the region or the neighborhood where you land at first isn’t where you ultimately want to be.
9. Be prepared for panic.
In more than 22 years speaking with people who’ve made the move to another country, I’ve yet to know one who didn’t experience a moment of, “Geez Louise, what in the world have I done?”
Expect to question your sanity for having ever considered the idea of moving so far from home and hearth, if only briefly. Expect it, prepare for it, and understand that it will pass. Everything you made the move for is waiting for you. You just need to give your perspective a little time to adjust.
10. Get local tax advice in the country where you’re planning to reside before you take up residence.
When we moved to Ireland nearly 20 years ago, we met with Ernst & Young in Dublin during one of our pre-move visits.
This turned out to be super-smart (though we didn’t realize it at the time). In Ireland then (this is no longer true today, as the relevant tax legislation has been amended since), if you organized your financial affairs according to a certain strategy that the advisor at Ernst & Young detailed for us, you could reduce your annual Irish tax burden substantially.
I won’t bore you with the details (especially as they’re no longer relevant). The point, though, is that the strategy had to be employed before we had an Ireland address. If we’d waited until we’d taken up residence in the Emerald Isle, our annual tax obligations would have been considerably greater.
11. Pay attention to your gut.
A place either feels right… or it doesn’t. All your research and figuring in advance is important, but nothing substitutes for the feeling you get when you hit the ground.