Retirement overseas is the dream for many: as soon as the final farewell to job is said and the children are grown up and independent, it is the time to look beyond the borders and to seek an idyllic overseas retirement haven.
According to The Telegraph almost half of those Britons with an income of more than £60,000 is planning to retire outside of the UK either permanently or at least for a few years.
There are many good reasons for retiring overseas, and although it might seem a little adventurous or risky, the advantages and benefits of spending your retirement years abroad are often very tangible.
Being an expat retiree often opens up a quality of life that would never be possible for retirees who decide to stick at home.
How to enjoy a happier lifestyle retired abroad:
Relish the Benefits of a Lower Cost of Living
In the most popular retirement destinations especially for Britons, the cost of living is often lower than in the UK. Even when the pound isn’t doing quite so well, it is still cheaper to live in Spain or Portugal, for example, than in the UK while maintaining the quality of life you want in retirement.
By retiring overseas, you can even get wealthier the moment you cross the border into your new country of residence!
Of course, this depends greatly on the country you choose to retire to.
If you retire to Italy or Germany, then the difference in the cost of living is insignificant. However, in Malta, Cyprus, Spain, Portugal and many other countries with absolutely wonderful climates and a high a quality of life, you will often be presently surprised with the overall reduction in the cost of living and consequently a very welcome increase in your personal purchasing power.
For example, by moving to beautiful Portugal you can be on average 32% better off having the same lifestyle as in the UK, with much better weather thrown in at no charge whatsoever.
If you want to do some country cost of living comparisons, check Numbeo – it’s a great site from which to compere and calculate your monthly living costs.
Chose an Ideal Climate for Better Health in Retirement
Retiring overseas gives you a chance to choose a healthier climate in retirement. Research and choose your destination based on your ideal climate and what suits your health, lifestyle and hobbies.
Whether you flourish in the Mediterranean climate of dry summers, or a humid tropical climate, or possibly enjoy four distinct seasons of inland continental locations, – retiring abroad gives you a unique chance to choose the climate that’s right for you.
It might happen that your favourite place has some extreme weather peaks during the year – a couple of too hot months in summer or a wet and grey winter. In this case it could well be the ideal time to visit family and friends back home and escape the worst period. As long as you always remember to return the invites, you’ll never be refused.
The secret of retiring overseas is that you choose the best climate to live in and you don’t have to stay and endure extremities of the local weather when they happen – just pack up and leave for a few weeks.
Design Your Lifestyle
Retirement is the start of a different life, possibly the first time in your life where you really can put yourself first. When was the last time since leaving school that you had the freedom to follow something that your passionate about but never found a spare moment even to start?
So, whatever it is you are dreaming about doing, retirement abroad could make it a whole lot more accessible and affordable. Whether it is scuba-diving, exotic gardening, playing golf or sailing, cooking, dancing salsa on the beach, making wine or starting your own jam making business, – a well planned retirement abroad is a perfect opportunity to do it all.
Spend time investigating and comparing countries, choose the destination that will contribute best to your ideal lifestyle. Do what you have always wanted to and enjoy your new found freedom.
A well planned retirement abroad will give your greater freedom, a healthier lifestyle and generally a little more money to spend on the things and people that you love most.
Maximise the Financial Benefits of Retiring Abroad
Choosing to retire abroad can enable you to get a tighter control over your personal wealth. As you become non-resident for tax purposes in your home country, a good deal of new financial advantages will potentially open for you.
Many countries are now competing for wealthy expats, realising how much value they can bring into their nation’s economy. In order to attract those much sort after independent retirees, some countries offer incentives and special deals to expats who want to come and live there. Most of these incentives, as you can imagine, are related to tax reductions on income, capital gains, wealth, inheritance, etc.
As an example, if you retire to Cyprus there is an optional special rate of 5% on your UK pension income that you will pay in Cyprus as your income tax, which is extremely low. In Northern Cyprus, tax exemptions are so large that they enable retirees to live totally tax free.
Living abroad enables you to manage your wealth more efficiently by paying less taxes and using broader opportunities for pension investment; plus you can often pass on your estate to your family with far less taxes than in your home country.
Depending on your country of choice by living abroad you might be able to:
- Optimise your income tax: some countries don’t tax expat retirees at all or levy a very low tax on pensions. For example, using pension freedom a British retiree can take their entire pension out in one go or over a number of years and go to live in Portugal under non-habitual residence regime tax-free for 10 years.
- Enjoy tax-free dividend income and/or tax free capital gains: for instance, if you move to Malta and become a tax resident there, you will be exempt from tax on foreign source capital gains, dividend and interest income.
- Legally mitigate UK Inheritance Tax for your family: by moving overseas and using an expert advice you can protect your assets from inheritance tax by moving them into tax efficient financial structures.
- Make the most out of your capital: by becoming an expat you have a chance to invest offshore and make your capital work harder to outpace inflation and beat low interest rates that banks offer. Offshore investments are flexible and portable. They also give you a fair amount of control over tax matters when time comes to cash in your investment.
- Get Access to Enhanced Healthcare
By moving abroad you can get access to some of the most advanced healthcare in the world.
Whether you live in Cyprus, Andorra, France or Chile, – local healthcare won’t let you down provided, of course, you have suitable medical cover.
It might seem a bit costly, but using your expat financial advantage you could find that affording private health insurance isn’t such a great burden. Especially when you retire and view good healthcare as a priority in the coming years – in this case access to a more efficient healthcare system may well prove to be a valuable investment.
These five benefits of retiring overseas are all about enhancing your life and opportunities.
Whether we speak about your health and lifestyle, financial possibilities or looking after your family, – all of these can be affected in a very positive way when you spend time living outside of your home nation. Oh, and don’t forget – moving overseas means acquiring a residency in another country. Another residency and/or in some cases another passport gives you and your family more freedom and more choice. It means you are not a hostage to any one country should things go wrong.
Choosing to retire abroad gives you a chance to gain greater control of your life, money and more personal freedom. As an independent individual, the more choices you have the more empowered you are, and your life journey will always be happier and more exciting when you feel you’re in control of it.