Though there are a number of reasons that one can be excited about the prospect of retiring abroad including the excitement of a new culture and possibly a lower cost of living, there are also a number of risks that you may need to examine before considering the move. These include: culture shock, medical concerns, exchange rate risk, taxation issues, and bureaucracy.
Things may be handled differently in other countries than which you may have grown accustomed. This should be an important factor to consider before deciding to relocate one’s place of residence, especially if one is not the sort open to new experiences. Culture shock can be somewhat mitigated both by being informed through research and field experience. It would be a good idea to plan on taking an extended vacation before considering moving anywhere. Research your destination on the internet. Talk with expatriates who may be living in the area.
Though according to the CIA and The World Factbook, there are a number of countries that boast life expectancies which are very similar if not better than the United States, many people do have concerns regarding the medical care that is available and how health care can be obtained. Make it a point to research what is available in terms of health care and always remember if one’s health situation deteriorates, one can always consider moving back.
Exchange Rate Risk
It can sometimes be easy to forget that the dollar is not the only currency in the world and that people have made and lost fortunes by trading currency. When living abroad, it is very important to build in a hedge for changes in exchange rates. When expenses can increase by 20% in the period of three months, one needs to be prepared. There are a number of methods to deal with this including planning on having to spend significantly extra just in case and/or investing in options to deal with changes in currency.
Once you get into the aspects of living abroad, I would always suggest hiring a tax professional to help you deal with the international tax issues. Once again, plan on taking an extended vacation and talk with expatriates. The may know some of the basic issues as well as be able to give you some names of tax professionals to use. Interview a couple of tax professionals when you are in the country to which you are considering relocation.
This very well could tie into culture shock, but the length of time that it can take to get things done elsewhere can be astounding along with the amount of paperwork to make something happen whether it would be getting plugged into basic utilities if you are building or any transaction with government officials. Once again, it would be a very good idea to do some research and talk with the expatriate community before moving.
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