There’s no doubt about it – the cost of living in the US is much higher than most other parts of the world. In fact, when US expats are surveyed, they say the lower cost of living is the top reason they retired overseas. For those concerned about outliving their money, getting more bang for your retirement buck can be attractive.
Will Your Social Security & FERS Pension Follow You Overseas?
Your monthly Social Security benefit and FERS pension can be deposited directly into overseas bank accounts. However, there may be additional fees depending on the type of account.
What About Your FEHB & Medicare Coverage?
Though most FEHB plans cover emergency care when you’re traveling overseas, if you’re enrolled in one of FEHB’s HMO plans, you won’t be covered if you live abroad. Some Blue Cross FEHB plans do cover medical care overseas – check the brochures for complete information. On the other hand, Medicare does not cover healthcare overseas.
The Advantages Of Retiring Abroad
Lower Cost Of Living. It’s possible to retire overseas for a fraction of the cost of retiring in the US. For example, the cost of living in Porto, Portugal, is approximately 65% less expensive than living in San Francisco.
Affordable Healthcare. Depending on the country, you can get access to free or low-cost public healthcare systems. Private coverage is also available in many countries at a cost that’s considerably less than comparable plans in the US.
Affordable Healthcare. Depending on the country, you can get access to free or low-cost public healthcare systems. Private coverage is also available in many countries at a cost that’s considerably less than comparable plans in the US.
Retiree Incentives. Many countries offer ex-pats incentives ranging from healthcare discounts, flat income taxes, duty exemptions, and residency options.
Living An Adventure. Retiring abroad provides new experiences in exotic locations surrounded by intriguing cultures.
“In fact, depending on where you retire, you may end up paying income taxes in both countries.”
Disadvantages of Retiring Abroad
Visa Issues. Though some countries offer a transition to residency, most overseas destinations require a Residency Visa. Review the Department of State’s country information for more details on obtaining a visa to live in a certain country.
Taxation Issues. Uncle Sam taxes your income no matter where in the world you live. In fact, depending on where you retire, you may end up paying income taxes in both countries. For more information, review the IRS’s tax information for residents and U.S. citizens living abroad.
Culture Shock. You may have to learn a new language and some of the goods and services you’re used to may not be available. And, if something goes wrong, you’re far from home and you’ll be dependent on strangers.
To learn more, an FRC® trained advisor can help connect you with tax and legal professionals who have experience helping ex-pats.
