Column: Are You Considering Retiring Overseas?

September 14, 2016

[Written by Carla Seely]

There is a growing trend in Bermuda among people who are ready to retire or who have just retired to head off the island to make the most of cheaper living and/or a more adventurous lifestyle.

Whether you are choosing to move to the US or Canada or something a little more exotic like Ecuador or Belize; making sure you plan accordingly is key. Retiring overseas can be a great idea but without research and a clear understanding of what is involved, it can be a very bad idea.

Carla Seely Bermuda Nov 21 2015 TC

Here are eight questions you should be comfortable answering prior to making the move:

  • 1. Have you spent more than a month there and lived like a “local”?
  • 2. How will you get access to your money?
  • 3. Can you get the medical care you need?
  • 4. How hard is it to establish residency?
  • 5. Are there any tax implications?
  • 6. Do you speak the language?
  • 7. How do you plan to see your family?
  • 8. What do you need to bring?

Have you spent more than a month there and lived like a “local”?

If you have made the decision you would like to retire overseas and have pinpointed the country and area you would like to live in, have you spent significant time there and lived like a local? The “blinders” of vacation eyes can definitely paint a very different picture to the reality of living there full time. Spending a couple of months in the area in which you think you might want to move to will give you a basic idea on the place. Does this area have the infrastructure needed to support the type of retirement you are looking for?

How will you get access to your money?

Simple enough question, but depending on your selected ideal retirement place it may not be as simple an answer. Are you planning on opening an account in this country and what are the requirements to do so? Is your plan to keep your accounts here and you simply use your debit card to withdraw cash? I can talk about this firsthand and some of the challenges I faced. I spent 18 months living in Central America and there were many times when the bank machine ran out of money during a long weekend.

Can you get the medical care you need?

Health insurance is no doubt one of the largest expenses during retirement and making sure you have good quality healthcare is extremely important. Does the country you intend to move to have healthcare? A lot of people are looking to move to countries that offer free or relatively inexpensive healthcare to its residents but this comes with a price. Are you prepared to wait 6 weeks for a doctor’s appointment, are you prepared to no longer to have the choice of treatment and to be told whether it is elective or non-elective?

How hard is it to establish residency?

Some countries are delighted to welcome foreign retirees and may even offer incentives including residency and exemptions on duty charged for personal affects you bring with you. But don’t set your sights on countries that already have an aging population; they do not want foreign retirees and will make it very difficult for you to qualify to obtain a visa.

Are there any tax implications?

Will you now have to pay taxes on your retirement income once you move? If you are going to become a resident of that country there may be tax obligations that will need to be paid on your retirement income. It is important to know what those potential tax liabilities will be and exactly how you file those taxes.

Do you speak the language?

If English is not the primary language of that country, how do you plan to communicate if you do not know the language? Do you plan to take lessons prior to moving or try the frustrating immersion technique with the hopes you will pick it up? Not speaking the language is not only frustrating but can also be very lonely.

How do you plan to see your family?

Anyone who has lived aboard will understand this; when you move, the visits in the first year from family will happen and then the next year they will begin to taper off. You cannot expect your family to visit you every year, nor can you be expected to spend your money visiting them every year. Setting ground rules is essential with your extended family.

What do you need to bring?

Depending on the location will ultimately depend on what you need to bring; is it a cooler climate or a warmer climate? If you are renting is the place fully furnished down to bed linens or will you need to pack those? If you plan to open a bank account do they require bank reference letters or criminal checks which you need to acquire before you leave.

Retiring aboard can be a wonderful experience and depending on the place can stretch your retirement income further. If you do your research, plan correctly and anticipate any potential challenges you may have a far more enjoyable retirement.

- Carla Seely is the Vice President of Pension and Investments at Freisenbruch-Meyer, if you would like any further details please contact cseely@fmgroup.bm or call 441 297 8686

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Comments (3)

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  1. Does St. David’s count as a foreign country? If so, my answer is yes , but I might have a problem getting a passport and my money. And you said nothing about transportation and the internet. I heard , all the natives walk everywhere they go.

  2. Antoine says:

    Great article. I would add political stability and the crime index and trends as factors to consider.

  3. Does this govt. direct deposit… I heard if you retire overs seas bda won’t give you “your” pension…

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