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08 Aug 2022, 16:02 GMT+10
If you're considering retiring to another country, you're not alone: Over half a million people receive Social Security benefits even though they live outside the U.S., and more Americans than ever are considering retiring in another country. Uprooting your life and relocating can bring both new opportunities and challenges, but careful planning can help you make your retirement abroad a reality.
It's important to have a financial framework in place before retiring abroad. You need a way to pay for expenses, and immigration authorities prefer applicants who can financially support themselves already. This means having enough in your retirement accounts for a sufficient and reliable monthly income. It can be helpful to take other sources of funding into account as well. For example, if you have had a permanent life insurance policy, such as whole or universal life insurance, long enough to build up the cash value, you can borrow against the policy for additional cash flow in retirement. This option can be helpful during market downturns when you don't want to sell stocks; it can also help you manage taxes.
Before moving, consider how health insurance coverage will affect your finances. Medicare doesn't cover expenses incurred abroad, and many countries require proof of insurance enrollment before granting a visa. Keep future challenges in mind, too-if your new host country does not have adequate medical or eldercare facilities in place for your needs, you may want to enroll in a healthcare plan that offers medical evacuation.
You've established your finances-now is the time to assess your host country's cost of living. Check traveler's forums and local social media groups to get a feel for the cost of living expenses and necessities. Whether it's housing costs, utility prices or something else, try to research what expenses locals are most concerned about. By assessing larger fixed costs and working your way toward smaller, more detailed expenses, you can more accurately predict how far your money can go.
It is vital to understand your tax liability-doubly so if you are moving abroad. If you are a U.S. citizen, living in another country does not exempt you from paying U.S. taxes. Be sure you understand the guidelines in place for taxpayers abroad and the tax laws at your destination, as well as any tax treaties they might have with the U.S. Many retirees abroad opt to consult financial experts with international experience when preparing their taxes to comply with the laws and maybe even avoid being double-taxed on income.
Moving somewhere completely new isn't easy; the distance from friends and loved ones can compound the difficulty of integrating into a new community. Even a time zone difference can make it harder to keep in touch with friends and family back home. When planning your move abroad, consider the difficulty of establishing a new life. Take note of certain factors, like language barriers or cultural differences, that can complicate your transition.
While you assess the difficulties facing anyone moving to another country, don't forget to consider the positives. As hard as parting from home can be, many retirees find the new experiences and connections make the move more than worthwhile. With some planning, you may find the relaxing retirement abroad you've always dreamed of is within reach.
The primary purpose of permanent life insurance is to provide a death benefit. Using permanent life insurance accumulated value to supplement retirement income will reduce the death benefit and may affect other aspects of the policy.
See Campaign: https://www.iquanti.com
Name: Michael BertiniEmail: [email protected]Job Title: Consultant
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