What to Know About Retiring Abroad
Many retired Americans are finding the idea of settling down overseas a desirable option. Most want to find a place that offers a lower cost of living, where they can afford to live off Social Security. Between 2010 and 2015, this number increased by 17 percent. As more baby boomers retire, this number is expected to continue to grow. Mexico, Canada, Japan, Germany and the United Kingdom are the most popular choices for seniors seeking to live abroad.
What’s the Appeal?
Several countries offer a lower cost of living, mild climates, as well as cheaper labor costs. It would be less expensive to pay someone to cook and clean the house than in America. Certain healthcare systems may also be appealing, offering good benefits but at a more affordable cost. Keep in mind that Medicare does not cover Americans that live abroad. Furthermore, the treatment of seniors and attitudes about age differ around the world. The Japanese are well known for respecting their elders, and they also have some of the longest life spans in the world. Western cultures tend to have more negative opinions surrounding the aging process.
What’s the Catch?
While the option of living in a beautiful country at a cheaper rate than in America is appealing, there are some things you should be prepared to experience. Culture shock can be a major obstacle, especially if you do not speak the language or know the culture well enough. Americans can access almost everything with the click of a mouse, and usually experience overly friendly customer service. Many Americans expect the same level of service to which they’ve grown accustomed, and become confused when they don’t experience it. For example, if you typically engage in lengthy conversations with your waiters, you may consider it rude when your waiter in France appears only to bring you your food and check.
It may seem obvious, but visiting the country you want to retire in should be number one on your list of things to do before moving. Taking an extended stay can help you decide if you like the culture and environment enough to live there indefinitely. Both spouses need to be fully on board, or resentment can grow as one spouse feels alone and miserable.
Have a plan to re-enter the United States. As people grow older, they typically want to stay closer to their families. Signing up for Medicare at 65 should be a crucial part of any re-entry plan. But why sign up for Medicare if you can’t use it outside of America? Medicare Part B, has a penalty for not signing up when you first become eligible. Monthly Part B premiums can increase 10% for each year a person could have had coverage, but did not sign up.
Talk to an agent about your retirement plans and how retiring abroad will effect your Medicare costs.
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