Retiring Abroad: A Growing Trend Among American Retirees

As the retirement crisis in the United States continues to worsen, many Americans are turning to alternative options for their golden years. One such trend is retiring abroad, where the cost of living is lower, healthcare is more affordable, and the quality of life is often higher. In this article, we’ll explore the growing trend of American retirees moving abroad and the benefits and challenges that come with it.

The Decision to Retire Abroad

Allan Fawcett, a 67-year-old retiree, made the decision to leave the United States behind and move to Spain in 2019. After decades of working in the tech industry, Fawcett was ready to take a break and spend his days playing tennis, reading, and traveling. He met his wife, Elisabeth, shortly after retiring and decided to take the leap and move to Spain permanently.

Fawcett’s decision to retire abroad was motivated by the high cost of living in the United States. "Computer programming destroyed my brain," he jokes. "I needed an escape." In Spain, he found a more relaxed pace of life, affordable housing, and a lower cost of living.

The Benefits of Retiring Abroad

So, what are the benefits of retiring abroad? For Fawcett, it’s the lower cost of living. Housing is much more affordable, food is inexpensive, and the wine is even less so. The mass transit system is also a major plus, as he doesn’t need a car to get around. Walkability is another benefit, as he can easily explore his new neighborhood on foot.

Susan Keenan Sweeney, a 69-year-old retiree, also made the decision to retire abroad. She and her husband, Joe, moved to Hungary in 2015, where they purchased a home in the countryside. Sweeney is thrilled with the decision, citing the extensive public transit system, free for those over 65, and the sense of safety and community they feel.

The Challenges of Retiring Abroad

While retiring abroad can be a great option for many, there are also challenges to consider. For Sweeney, one of the biggest challenges is the language barrier. While many Hungarians speak some English, it’s not always easy to communicate. She also misses her family, who are all still living in the United States.

Fawcett, too, faces challenges. The first few years of living abroad can be overwhelming, as he navigates the bureaucracy and paperwork required to set up a new life. He also misses the familiarity of the United States and the convenience of having everything he needs within reach.

Planning for the Move

So, how can Americans plan for the move abroad? Mindy Yu, director of investing at Betterment, warns that it’s crucial to take the time to plan for the considerable financial, legal, and logistical pitfalls. "It’s crucial to avoid seeing retiring abroad as the cheaper option and instead begin saving as early as possible, while diversifying your portfolio to avoid risk," she says.

Yu also recommends consulting a tax professional with international expertise, as living abroad may also come with new tax obligations, both to the U.S. and your new country of residence.

Conclusion

Retiring abroad can be a great option for many Americans, offering a lower cost of living, a more relaxed pace of life, and new cultural experiences. However, it’s essential to carefully consider the challenges and plan accordingly. With the right mindset and preparation, retiring abroad can be a wonderful adventure.

FAQs

Q: What are the benefits of retiring abroad?

A: The benefits of retiring abroad include a lower cost of living, a more relaxed pace of life, and new cultural experiences.

Q: What are the challenges of retiring abroad?

A: The challenges of retiring abroad include navigating bureaucracy and paperwork, dealing with language barriers, and missing family and friends back home.

Q: How can I plan for the move abroad?

A: To plan for the move abroad, start by researching the country you’re interested in moving to, consult with a tax professional, and consider working with a relocation expert.

Q: Are there any tax implications to consider?

A: Yes, there are tax implications to consider when retiring abroad. You may be subject to taxes in both your home country and your new country of residence. It’s essential to consult with a tax professional to understand your specific situation.

Q: Can I still access healthcare as an American retiree abroad?

A: While healthcare systems in other countries may differ from those in the United States, many countries offer high-quality healthcare options. However, it’s essential to research the healthcare system in your new country of residence and consider purchasing supplemental insurance to cover any gaps in coverage.

Author: fortune.com

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